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[Music]
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the world's leading superpowers are
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locking horns game on here a trade war
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between the united states and
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china is here over the past 16 months
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america and china have been trading
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blows through tariffs on goods
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we are looking at a reality that has you
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know a 25 tariff on every single product
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that would come in from china
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the impact is being felt on industries
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worldwide
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but what is the story behind the america
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china trade war
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so the trade war what have you guys been
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looking at the us doesn't like
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that china is growing so fast and
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set to overtake uh america as like the
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biggest economy in the world if it
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hasn't already by certain measures right
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basically china and u.s are kind of
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caught in this
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race of imposing tariffs on each other
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so u.s slaps a high tariff on certain
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products and then china retaliates
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it's multiple industries across multiple
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markets it's huge
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and i think right now would be a really
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good time to look at what's happened
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and how it could impact the world from
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now on
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at the economist we've been covering the
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trade war extensively
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sumaia keynes is our trade and
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globalization editor based in washington
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dc
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how did this whole trade war kick off
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how did this whole trade war start for a
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long time there have been frustrations
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that past
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american administrations had with the
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chinese
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on the 2016 presidential campaign trail
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you started to see some really
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tough rhetoric we can't continue to
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allow
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china to rape our country and that's
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what they're doing
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and so he gets into office his united
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states
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trade representative that's the kind of
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official trade negotiator
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they're working on this big report so
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they're essentially investigating
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china's economic practices essentially
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the question they're asking is
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has china done anything that would
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frustrate america's economic interests
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and they find
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surprise surprise yes how long a history
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is there of
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uh these complaints the u.s has about
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china these concerns go back for a
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really long time
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and i think to understand them properly
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you really need to go
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way back to the expectations that people
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had
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when china was thinking about entering
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the world trade organization
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china's economic rise has been dramatic
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in 1978
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china's gdp at market prices was just
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six percent of america's
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last year it had grown to 66 when
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considering local spending power
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china has already overtaken america
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this unprecedented growth began with
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deng xiaoping
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he started opening up china's economy to
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the world in 1978
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and the country quickly became the
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world's factory
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over the next decade exports as a share
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of gdp
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tripled and by 1988 15
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of china's exports went to america
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[Music]
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the world trade organization opened its
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doors to china in 2001
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and it was america that ushered it in
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bringing china into the wto is a win-win
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decision it will protect our prosperity
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and it will promote the right kind of
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change in china
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after joining the wto china became an
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economic superpower
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but people had expected the country to
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also become more like a western
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capitalist economy
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that didn't happen america now claims
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that china achieved its growth
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by not playing fair are those claims
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justified
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to find out the answer i spoke with
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david rennie he's our beijing bureau
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chief
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there's two ways in which china
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certainly hasn't been playing fair
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one way is just that china treats
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chinese companies differently
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so if you are a western business your
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chinese competitor
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not only has better market access but
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maybe the land that it built its factory
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on
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was given for free maybe it got a giant
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tax break
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china just doesn't have a level playing
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field there's then
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the really dirty stuff stealing foreign
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companies technology
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if you ask chinese officials about the
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accusation that china
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is stealing its way to the top they'll
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say well hang on america steals secrets
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too
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so why are you coming after us the
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american government will tell you
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sure they spy and they steal stuff but
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never for commercial purposes
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with donald trump's election in 2016
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you had a president who actually set
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about getting tough with china
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once he was in office and we've never
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really had that before
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the trump administration has been using
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tariffs or taxes on imported goods
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to try to force the chinese to change
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their ways
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in july 2018 america imposed tariffs of
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25
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on 34 billion dollars worth of chinese
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products
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that almost doubled the average tariff
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rate on chinese imports
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from 3.8 percent to 6.7 percent
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and it's american firms that have to pay
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that tax
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but with every increase from america
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came an increase from china
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since the start of the trade war china
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has more than doubled its average tariff
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rate
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america's has tripled the fight has
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become overtly political
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because china's tariffs are hitting
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president trump's voter base
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many counties where trump won in the
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2016 election were here
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in the great plains and these are the
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counties most affected by china's
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tariffs
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someone who knows all about the impact
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tariffs are having beyond the data
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is chad baum from the peterson institute
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for international economics
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he's been analyzing international trade
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for decades but the trade war has put
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his research in the spotlight
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some people have referred to it as is my
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world cup or my super bowl it's
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something that i've been studying in the
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background for 20 years and now all of a
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sudden the world seems to be interested
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in this
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what role do terrorists play in in a
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trade war tariffs are basically
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a a tax but it's a tax that's only paid
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for goods that are produced outside of
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the country in a specific place
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one of the things that china has done in
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its tariffs is it's
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imposed really high tariffs on american
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exports of of soybeans
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this is a huge product that farmers in
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iowa and across the midwest grow only to
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sell to china
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so how are these tariffs and the trade
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war
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impacting the wider world economy i
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think at some level
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we're seeing the decisions
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that businesses make be affected by this
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nowadays they're not sure what markets
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are going to be open to them
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in the future and that's going to impact
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their investment decisions the
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international monetary fund the imf
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they expect economic growth to be a lot
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lower
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in the future because of the tensions
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are rising during the trade war the
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global economy
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is is slowing down and everybody's
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increasingly concerned about that
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as things stand now a ceasefire in the
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trade war could be drawing near
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the two leaders are hoping to agree on a
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phase one deal soon
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which could mean some tariffs being
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lifted the trump administration wants
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china to buy more american produce
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and tighten up their intellectual
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property rules
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if that phase one deal is signed will it
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be the beginning of the end of the trade
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war
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i took that question back to samaya
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the americans are hugely ambitious for
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for the kinds of changes that they would
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want
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from the chinese but those ambitions i
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don't think will be reflected
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in the preliminary phase one deal
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the chinese government wants its economy
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to do well and wants its citizens to
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to get richer to the extent that the
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americans persist in demanding these
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big changes to the chinese economy
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it's going to be really difficult to get
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a deal
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even if there is a phase one deal there
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will be a lot of issues still to be
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resolved
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but there's more to the trade war than
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just tariffs america has also imposed
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restrictions on some chinese firms
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especially ones in the tech industry
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we cannot allow any other country to
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out-compete the united states in this
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powerful
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industry of the future specifically over
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one
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chinese company huawei can offer cheaper
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prices because they are heavily
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subsidized by the chinese government
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we've made another film that looks
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closely at huawei and why the west is
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worried about it
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it includes a rare interview with
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huawei's ceo run zhang fei
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meiguo chi sensei
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and we looked into how these tensions
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will impact american industries
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already dependent on huawei technology
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the biggest
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issue i think with all of this political
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turmoil surrounding the huawei name is
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uncertainty you can watch the huawei
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film right now by clicking on the link
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opposite
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if you want to learn more about the
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trade war you can click the other link
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where you'll find
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all the research we used to make this
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film as well as other articles you've
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written including a special report by
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david rennie
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as always if you liked what you saw hit
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that subscribe button
