America v China: why the trade war won’t end soon | The Economist

The world’s leading superpowers are locking horns Game on here, trade war between the US and China is here Over the past 16 months America and China have been trading blows… …through tariffs on goods We are looking at a reality that has a 25% tariff on every single product… …that would come in from China The impact is being felt on industries worldwide But what is the story behind the America-China trade war? So the trade war, what have you guys been looking at? The US doesn’t like that China is growing so fast… …and set to overtake America as the biggest economy in the world… …if it hasn’t already by certain measures Basically China and the US are caught in this race… …of imposing tariffs on each other So the US slaps a high tariff on certain products then China retaliates It’s multiple industries across multiple markets, it’s huge And I think right now would be a really good time to look at what’s happened… …how it could impact the world from now on At The Economist, we’ve been covering the trade war extensively Soumaya Keynes is our trade and globalisation editor… …based in Washington, DC How did this whole trade war kick off? How did this whole trade war start? For a long time there have been frustrations that… …past American administrations had with the Chinese On the 2016 presidential campaign trail… …you started to see some really tough rhetoric We can’t continue to allow China to rape our country… …and that’s what they’re doing And so he gets into office, his United States Trade Representative… …that’s the kind of official trade negotiator… …they’re working on this big report So they’re essentially investigating China’s economic practices Essentially the question they’re asking is… …has China done anything that would frustrate America’s economic interests? And they find surprise, surprise—yes How long a history is there of these complaints the US has about China? These concerns go back for a really long time And I think to understand them properly… …you really need to go way back to the expectations that people had… …when China was thinking about entering the World Trade Organisation China’s economic rise has been dramatic In 1978 China’s GDP at market prices was just 6% of America’s Last year it had grown to 66% When considering local spending power… …China has already overtaken America This unprecedented growth began with President Deng Xiaoping He started opening up China’s economy to the world in 1978… …and the country quickly became “the world’s factory” Over the next decade, exports as a share of GDP tripled… …and by 1988 15% of China’s exports went to America The World Trade Organisation opened its doors to China in 2001 And it was America that ushered it in Bringing China into the WTO is a win-win decision It will protect our prosperity and it will promote… …the right kind of change in China After joining the WTO, China became an economic superpower But people had expected the country to also become… …more like a Western capitalist economy That didn’t happen America now claims that China achieved its growth by not playing fair Are those claims justified? To find out the answer, I spoke with David Rennie… …he’s our Beijing bureau chief There’s two ways in which China certainly hasn’t been playing fair One way is just that China treats Chinese companies differently So, if you are a Western business… …your Chinese competitor not only has better market access… …but maybe the land that it built its factory on was given for free… …maybe it got a giant tax break …China just doesn’t have a level playing field There’s then the really dirty stuff: stealing foreign companies’ technology If you asked Chinese officials about the accusation that… …China is stealing its way to the top… …they will say, well hang on, America steals secrets too So why are you coming after us? The American government will tell you sure, they spy and they steal stuff… …but never for commercial purposes With Donald Trump’s election in 2016… …you had a president who actually set about getting tough with China… …once he was in office and we never really had that before The Trump administration has been using tariffs… …or taxes on imported goods… …to try to force the Chinese to change their ways In July 2018 America imposed tariffs of 25%… …on $34bn worth of Chinese products That almost doubled the average tariff rate on Chinese imports… …from 3.8% to 6.7% And it’s American firms that have to pay that tax But with every increase from America, came an increase from China Since the start of the trade war… …China has more than doubled its average tariff rate America’s has tripled The fight has become overtly political… …because China’s tariffs are hitting President Trump’s voter base Many counties where Trump won in the 2016 election were here… …in the Great Plains… …and these are the counties most affected by China’s tariffs Someone who knows all about the impact… …tariffs are having beyond the data… …is Chad Bown from the Peterson Institute for International Economics He’s been analysing international trade for decades… …but the trade war has put his research in the spotlight Some people have referred to it as my World Cup or my Super Bowl It’s something I’ve been studying in the background for 20 years And now all of a sudden the world seems to be interested in this What role do tariffs play in a trade war? Tariffs are basically a tax… …but it’s a tax that’s only paid for goods that are produced… …outside of the country, in a specific place One of the things that China has done in its tariffs is… …it’s imposed really high tariffs on American exports of soyabeans This is a huge product that farmers in Iowa and across the Midwest… …grow only to sell to China So, how are these tariffs and… …the trade war impacting the wider world economy? I think at some level we’re seeing the decisions that businesses make… …be affected by this Nowadays, they’re not sure what markets are going to be open to them… …in the future and that’s going to impact their investment decisions The International Monetary Fund, the IMF… …they expect economic growth to be a lot lower in the future… …because of the tensions arising during the trade war The global economy is slowing down… …and everybody’s increasingly concerned about that As things stand now, a ceasefire in the trade war could be drawing near The two leaders are hoping to agree on a “phase one” deal soon… The two leaders are hoping to agree on a “phase one” deal soon… …which could mean some tariffs being lifted The Trump administration wants China to buy more American produce… …and tighten up their intellectual property rules If that phase one deal is signed… …will it be the beginning of the end of the trade war? I took that question back to Soumaya The Americans are hugely ambitious for the kinds of changes… …that they would want from the Chinese but… …those ambitions I don’t think will be reflected… …in the preliminary phase one deal The Chinese government wants its economy to do well… …wants its citizens to get richer The extent that the Americans persist in demanding these big changes… …to the Chinese economy, it’s going to be really difficult to get a deal Even if there is a phase one deal… …there will be a lot of issues still to be resolved But there’s more to the trade war than just tariffs America has also imposed restrictions on some Chinese firms… …especially ones in the tech industry We cannot allow any other country to outcompete the United States… …in this powerful industry of the future Specifically over one Chinese company Huawei can offer cheaper prices… …because they are heavily subsidised by the Chinese government We’ve made another film that looks closely at Huawei… …and why the West is worried about it It includes a rare interview with Huawei’s CEO Ren Zhengfei I do not really understand America’s political motivation And we looked into how these tensions will impact American industries… …already dependent on Huawei technology The biggest issue, I think, with all of this political turmoil… …surrounding the Huawei name is uncertainty You can watch the Huawei film right now by clicking on the link opposite If you want to learn more about the trade war you can click the other link… …where you’ll find all the research we used to make this film… …as well as other articles we’ve written… …including a special report by David Rennie And as always if you like what you saw, hit that subscribe button

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100 thoughts on “America v China: why the trade war won’t end soon | The Economist

  1. China has become a capitalist economy, over 70% of GDP is the private sector, and all net national wealth since 180 has come from it. False claim there in the video.

  2. China is just corrupt. They stole hundreds of billions from luxury brands like LV, Chanel, Rolex, etc alone. Even janitors in China wear yeezys(fake). 😂

  3. It’s not a trade war, it’s a war of ideology. The US is not insecure about anything. Worth a deeper look, if you’re interested. We’re probably fighting for the future of mankind and our individual rights and liberties, but people seem to think that this is about the US being insecure. Again, worth a deeper look. Keep an open mind, don’t hate the US. Literally, every single luxury you have now is a product of the new world order that they created, which sadly, created this totalitarian mercantilist organization.

  4. This is nothing new. When japan was raising up in 70/80s, us forced japan to stop growing and sign unfair treaties. Rolling back, when US found it difficult to link dollars and gold, it unilaterally dropped the Bretton woods agreement when it needed to introduce a concept of credit system. The gold wasn’t enough to back up the greenbacks the fed printed. So a rubber calling out others rubbers… ironically and shall we call that a snitch? Lol

  5. 3:34 – China didn’t play fair.

    As an American expat that has done business in 25 countries over 35 years, I can tell you that the above statement has to do with a fundamental cultural understanding. China was never going to be a Western capitalistic economy. To think so is extremely naive.

    You see, China is an example of a ‘group’ culture, whereas America is an ‘individualistic’ culture. These are fundamentally different and always will be. ‘State’ capitalism makes total sense for China, because it is a ‘Group’ approach. It will be very difficult, if not impossible, for individual American companies to ever compete against state-run companies, since they will always have a huge financial advantage, even if they are inefficient once China targets that industry as being strategic.

    The trade deficit with China is no different than a score on the scoreboard. It indicates that you are losing and need to change your approach.

    What America needs to do is learn more how to compete as a ‘team’. A great example would be how we landed a man on the moon. It’s called ‘mission-orientated’ economics. Then, we start to win more often

  6. China grows so fast by ripping off United States and by stealing the technologies. It was the United States that funded China's growth for the past 20 years, hoping China will abandon the Communism ideology and join the democratic world. But Xi Jinping is too arrogant and revealed his hand prematurely that they are moving toward Nationalism and Imperialism instead. It woke up the sleeping giant.

  7. Continue to tariff China and find other markets to buy and sell until China changes their trade and humanitarian practices.

  8. No point arguing in the comment section. People already made up their mind and only pick evidence to support their own beliefs. If you want to really change people's mind, talk to real people face to face and not bots/50 cent army.

  9. China saved the people of America. Back in the 80s it was not uncommon for American mechanics to look in junkyards to find parts to fix your car NOW if you go online for parts you will find almost any part for your car and for a better price than any american part. My life and freedom has nothing to do with American buisness unless it's the company I work for. I only support the American Consumer to save more money. China offered American's a better price on goods (My Thought) China put money back in my pocket and millions of American pockets. China saved American consumers Billions if not trillions of Dollars. PLEASE AMERICA DONT LET THEM MAKE YOU BELIEVE TO ONLY BUY AMERICAN GOODS. Politicians will play off the patriotism of Americans in order to exploit you. CHINA SAVED AMERICAN CONSUMERS BILLIONS OF DOLLARS. The United States is not about saving America money. My last word, Credit is for the poor and The rich dont have any use for credit they can buy anything they want without credit. PLEASE DONT BE FOOLED AMERICA, TARIFFS DONT EFFECT CHINA BUT AMERICAN CONSUMERS TO PAY MORE.

  10. What they call a Constitutional Right to Tariff is a scam to practice Fascism in America. We have no right to have over seas allies to help American Consumers. Anybody who supports Tariffs is a Fascist, and is NOT in the benafit of people.

  11. Let's be clear. Tariffs are going to lead to a reduction in economic activity on both sides. However, I think the outcome will be worse for the US simply because China is more globalist than the US. The US under Trump is shrinking back to its borders whereas China is expanding its global output and relationships with other countries. I think the outcome is pretty obvious.

    For sure there are issues to deal with in regards to China, but Trump is not clever enough to see how he can bring this about.

  12. There are no friends in business and the US has always held all the cards and had all the say regarding the world economy but now they are losing control. It won't be long before China will uncouple from the US and with the Brics nations launch a new trading system and a new world reserve currency side stepping the rule and abuse of the US dollar. This new system will be will be swiftly executed and America will lose all of it's economical control. This new system will remove the pyramid affect of all the money flowing to the top few corporations and instead will bring a better living standard for the world. China is at full speed networking with the rest of the world laying the foundation for the new order of nations.

  13. Trump, in the Chinese folk, we affectionately call him "Chuanpu" "Chong Jianguo", we call him a comrade!

    Compared with his predecessor, Obama, he has helped China more and more directly. As the Chinese people, our Chinese people sincerely wish him re-election in the 2020 general election.

  14. You people actually call yourselves the economist when you haven’t a clue how macro economies and trade are supposed to work. This trade war is the correction that should have happened years ago.

  15. Pretty one-sided, and its only America who has issues, China has no issues…RIGHT! 1.) Why don't we take 20 years (although its longer) and move $600B per year in Intellectual Property Theft by China from US back to US ~ that's $12 TRILLION, not including interest 2.) WTO : China has been a flagrant violator of the WTO terms it signed on to, which caused drastic increase in its economy and which US supported based on these term. China was gifted "developing status in WTO entrance, which has allowed CHINA not US to have extremely one sided rules against others including US on trade terms 3.) China Tariffs on US : AS you saw from the graph shown , but not mentioned, CHina's Tariff's have always been much higher than the US's, even after the so called trade war 4.) China direct investment into companies, in addition to land gifts, is very high and unfair. 5.) China forced JV's on companies, as well as many Strongs on FDI direct investment in China 6.) Currency manipulation, 6.) Gross environmental destruction, which some estimate may cause CHina's GDP to actually be negative, if you also include the dramatic health impacts to its citizens 7.) CHina's extreme safety and quality issues with a great part of what they manufacture, should warrant it being blocked. 8.) Chinese human rights abuses against large portions of ethnic and religious in China which should be dealt with as we do with other such abusers. China is the largest human rights abuser on the planet. 10.). CHina's extreme corruption should make it subject to penalties on its trade as we do with others..11.) CHina's aggressive actions militarily in South China sea, against Taiwan, HKG, India and almost all its bordering country neighbors, as well as what it has done in Africa and S America …..this is a short list of major issues that taken together, makes one question why we have business with china at all,

  16. This video doesn't mention what technologies are stolen by the Chinese, most people who comments here are nothing more than brainwashed dog. When you talk about unfair practices, did china say anything about Microsoft, Intel, AMD, Nvidia etc, those high-tech companies make tons of money from the Chinese market, and the money goes trough HK, and flow back to the US, and it is not count as export of the US. Let's be honest, the US can't manufacture stuff, which means it will also have deficit to every developing countries in the future.

  17. The fact that you can speak your mind when it come on how America handle this issue is the very thing that you can't do on China. Imagine China as a world power then every word you said that offend them will be a crime.

  18. Economist to egone no miss. The prelude of the downfall of The U.S.A is
    Runaway exorbitant taxations.better stop the
    Indecent Greed before it
    Is too late.

  19. There's no trade war between them. They're just adjust themself economics environment to suit their own aspect. "Trade war" are just a gimmick created by medias as a play to air the drama (medias lived on that).

  20. The physical fact is that USA and allies do not need China or anything from China, and China with allies do not need anything from USA. Both parts can close their doors and live well on their own. This background most be considered to have a real understanding of this conflict.

  21. I'm surprised at how biased this video is. It's meant to be objective but it's clearly put together with a hidden message. Oh America steals just for not for commercial purposes.. what a load of bulls**t.

  22. This is what is called "Defeating the opponent in his own game". And after all, you still think world do trust US?

  23. There are Americans in the world, and the double standards of the United States require other countries to be shameless.

  24. United States of America has borrowed to much money from China and now Trump wanna bully a country that has a huge military and cause more harm to this Nation. This is a bad business man. That wanna write history that he was the one that went to war with this country and our soldiers will die.

  25. You showed Bill Clinton talking about inducting China in the world trade organization but you're terrific timeline did not show what the terrifs were before they entered the world trade organization.

  26. A report on trade war is started by misinformation. Look at the way China pictured. A country several times bigger in population and land is portayed smaller than the states. The us population is less than 5% of the world's.

  27. Jesus Christ, why is everybody scared of China? China is nothing more than a paper giant, glue together by a prosperous economy under an autocratic regime, that is desperately trying to portrait itself as a homogeneous country. There is a reason why autocratic regimes do not last the test of time, people don't like to be oppressed and there are some 50 or so ethnic groups in China, that have yielded their power to the Han Chinese in exchange for economic prosperity, but the economy is cyclical. Fear China when it endures 25%+ unemployment, but it won't. History repeats itself, and China's history is one of internal chaos. if anything the west disentangling itself from China

  28. ok so the 2 issue we have is 1) level playing field, 2) intellectual property thief.issue 1. level playing field,  America has farm subsidies even if U.S farmer don't need it. from pork, to cattle to soy and don't forget oil subsidies, ethanol subsidies, export subsidies (export credit guarantee program and dairy export incentive program. housing subsidies as interest rate subsidies and down payment assistance, transportation for train, aircraft and water borne vessel subsidized federal aid highway act of 1956, bank bail out, you got cash for clunkers to obama-care subsidies  iIssue 2 intellectual property thief, under world trade organization agreement on trade related aspect of intellectual property right (TRIPS) "Developing country members in particular see technology transfer as part of the bargain in which they have agreed to protect intellectual property rights. The (TRIPS) Agreement aims for the transfer of technology (see above) and requires developed country members to provide incentives for their companies to promote the transfer of technology to least-developed countries in order to enable them to create a sound and viable technological base" in another word it is not only right to transfer to technology to a developing country, it is imperative.

  29. America does not like China FORCING American companies in China to hand over key intellectual property to the Chinese government, to America that is 'stealing'. China sees no problem with stealing, and that is where this whole trade war started. I think that America should DECOUPLE itself from China, banning the sale of all Chinese products and even Chinese components/parts in America, and allow China to do the same with American products/parts/components. That would totally solve the problem of the theft of American technology.

  30. China Wenzhou's bosses were the first who knew the results of the 2016 US presidential election, because Trump’s hat orders are more than Hillary

  31. Us Japan trade collapsed japanneconomy.
    Us china trade whats is result lets see.
    Dec 15 tarrifs on consumers product.

    Us trade deficit with countries needs to control.

  32. That is fucken crazy..So china says we steal stuff but so does america, america says yes we spy and steal stuff but never for commecial purposes … that is beautiful… only in america…

  33. America with all its flaws and trangressions still makes for a better super power than one party state China. They need to work with Russia towards world peace and stability AND they need to free Assange. China for its part needs to become a democracy.

  34. Democratic countries have been extremely foolish to do business and making huge investments in a dangerous Communist country like China whereas in the past the US and EU etc. were against Communist USSR. Beware China will be worst threat than USSR. It will be wise for democratic countries to pull out soon from China and invest in friendly countries like Japan, India etc. in Asia.

  35. one: China is anything but a "superpower" Two: we need to kick them to the curb – WE have only fallen ever since our so-called trade "agreement" took effect…..industrial espionage, exploiting our immigration systems and buying up massive blocks of real estate, commercial entities including huge players in our Ag industry………protectionism. China needs to get stomped on hard.

  36. "The American government will tell you sure, they spy and they steal stuff… but never for commercial purposes" and that makes it ok? What kind leftist mental gymnastics is this?

  37. Too many Americans don't truly know what is to live a harsh grinding hardship. What they call in the US hard life is nothing compared to what truly harsh grinding poverty is…Americans don't know, never knew, never experienced what it is… they are too spoiled that they feel it is the end of the world when they can't sustain their fake eyelashes, fake nails, fake hairs, expensive cosmetics (and BB cream to make their faces look like naturally flawless), and while they enjoy the freedom in their free worlds they actually do not TRULY realize how fortunate they are…instead they take these for granted, they abuse it and don't appreciate how fortunate they are. This is why these same Americans or should I say westerners seem to like what China does…they seems to support the all the wrong China does. Ok, NO one country is perfect….but why support a communist, totalitarian government run by barbaric Psychopaths and Thugs??

  38. It is ironic how a journal named The Economist without any economic insights provided in this video. This is the Economist, not Fox News. Tell your readers about what trade deficit is and how the global capital flow works. Do not spit out shallow accusations easily in your videos. Like someone said, why won't US corporations leave China after 25% of tariffs? (Please don't throw uneducated comments on this fact. ALMOST NO US COMPANY HAS LEFT CHINA. Don't you feel curious why?)

  39. I would like to see research. You said intellectual theft but it’s happening here as well. I know an engineer in Canada who got his idea stolen by a company in the States. They’re going to court for that as I speak.

  40. I think we did right by giving them a bit of a head start. The agreement should have accounted for the day that they were no longer handicapped.

  41. The Economist, please choose your foreign and domestic correspondents carefully.

    That Dave Rennie guy is telling pure lies, as a matter of fact, the foreign companies have been the ones getting all sorts of benefits from Chinese government, like tax free for first 2 years, etc.. Regarding giving free land to Chinese companies, I don’t know if anybody will believe such a thing exit in the world. By the way, the US spies sure don’t steal commercial and intellectual materials from a country, because they steal the country instead.

    That James A. Lewis person’s claim on that “Huawei is heavily subsidised by the Chinese government”, doesn’t make any sense, if you know that first, Huawei is a private company; second, there are 3 state owned telcos (China Telecom, China Mobile, and Unicom) in China, why should the government favour in the private Huawei so much?

    In addition, Huawei 5G being a national security threat is a total conspiracy theory. The “Economist”, please don’t be the “Conspiracy theorist”.

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