The US-China Trade War: Who Conceded First And What It Means For Global Trade

Kenji Nakamura

5 min read

Post on May 16, 2025

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Early Stages of the US-China Trade War: Escalation and Tariffs

The US-China trade war began to escalate significantly under the Trump administration. Initial actions included the imposition of tariffs on various goods, notably steel and aluminum, citing national security concerns. These actions, however, quickly expanded to encompass a broader range of products, triggering a tit-for-tat response from China.

• Reasons cited by the US for initiating tariffs: The US government argued that China engaged in unfair trade practices, including intellectual property theft, forced technology transfer, and the creation of significant trade imbalances. These claims were central to the justification for imposing tariffs.
• China's initial retaliatory measures: China responded with its own tariffs, primarily targeting US agricultural products like soybeans and pork. This retaliatory action had a substantial impact on American farmers and related industries.
• The economic impact on both countries during this initial phase: The initial phase of the trade war led to increased costs for consumers in both countries, disruptions to global supply chains, and uncertainty in the market. Industries heavily reliant on trade between the two nations, such as manufacturing and agriculture, suffered the most.

The Search for Concessions: Negotiations and Trade Talks

Multiple rounds of high-stakes negotiations took place between the US and China, involving key figures such as Robert Lighthizer (US Trade Representative) and Liu He (Chinese Vice Premier). These talks were often characterized by intense disagreements and periods of both progress and setbacks.

• Specific points of contention during negotiations: Major sticking points included persistent trade imbalances, China's commitments on intellectual property protection, and increased market access for US companies in China. These issues represented fundamental differences in economic and trade philosophies.
• Mention the "Phase One" trade deal and its key provisions: The "Phase One" trade deal, signed in January 2020, represented a partial de-escalation. Key provisions included China's commitment to purchase a significant amount of US agricultural products and some progress on intellectual property rights.
• Analysis of which side made more significant concessions: While both sides made concessions, arguments can be made for both the US and China making significant compromises. The US eased some tariffs and delayed others, while China committed to substantial purchases of US goods, representing a concession in its trade practices. The relative economic and political costs of these concessions remain a topic of debate amongst economists.

Analyzing the Concessions: Who Backed Down First?

Determining who conceded "first" is difficult, as the trade war involved a complex series of actions and reactions. A nuanced analysis is needed to evaluate the significance of the concessions made by each side.

• Argument for the US making concessions: The US, by easing some tariffs and delaying others, arguably made concessions by reducing the immediate economic pressure on Chinese businesses and consumers.
• Argument for China making concessions: China's commitments to purchase a specific amount of US goods and their agreement on certain intellectual property issues represent significant concessions impacting their domestic industries and economic policy.
• Assessment of the relative economic and political costs of concessions: The economic costs were significant for both sides, though arguably more so for China, due to its reliance on exports. The political costs involved maintaining domestic support for their respective approaches to trade negotiations.

The Role of Global Pressure

The US-China trade war didn't occur in a vacuum. Other countries felt the impact through disrupted supply chains and slower global economic growth. This global pressure, in turn, influenced both sides' willingness to compromise.

• Mention the impact on supply chains and global economic growth: The trade war disrupted global supply chains, leading to increased costs and uncertainty for businesses worldwide. The International Monetary Fund (IMF) estimated a significant negative impact on global GDP growth.
• Examples of how other countries attempted to mediate or influence the situation: Some countries attempted to mediate, urging both sides to find a resolution. The resulting global uncertainty underscored the interconnected nature of the global economy.

Long-Term Implications for Global Trade

The US-China trade war left a lasting mark on global trade. Its impact is still unfolding and will likely influence international relations for years to come.

• Increased trade protectionism in other parts of the world: The trade war emboldened protectionist sentiment in other countries, leading to increased trade barriers and a more fragmented global trading system.
• Restructuring of global supply chains: Companies began diversifying their supply chains, reducing their reliance on either the US or China, leading to a shift in global manufacturing and production patterns.
• Increased geopolitical tensions: The trade war exacerbated existing geopolitical tensions between the US and China, adding another layer of complexity to their bilateral relationship.
• The impact on specific industries: Industries such as technology and agriculture faced particularly significant disruptions, forcing them to adapt to the changing trade landscape.

Conclusion

While both the US and China made concessions during the US-China trade war, a comprehensive analysis suggests that China made more significant concessions in terms of market access and intellectual property commitments. Understanding this historical event is critical for comprehending the ongoing evolution of global trade relations and the future dynamics between these two economic giants. To stay informed about the ongoing evolution of global trade and the continuing impact of the US-China trade war, continue reading articles and analyses on this vital topic. Further research into the economic data related to the US-China trade war will provide a more nuanced understanding of this complex issue.