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

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

  1. Ya let's see how long it last the Chinese are marching the their own streets holding American flags singing our national anthem.

    THE ECONOMIST = amateurs that know nothing about economy :)))
    got to give it to TRUMP , this dude is smart

  3. People really don’t like it when Trump is right. I didn’t vote for him, but credit needs given where credit is due.

  4. Since you won't cover any explanation from China side, you can say anything you want to fool people around

  5. this report failed to see that China is dying. Samsung moved out and the whole area died. the moving of factories destroyed communities around them. unemployment rate in China is over 15% (conservatively), realistically it's around 25%. tariffs didn't effect US at all because exporters was able to absorb all tariffs thanks to the subsidies provided by the gov. then the gov bonds started to fail. over 70% bonds are expected to default in 2020… so… Economist did a poor job reporting. I would watch Jim Cramer's mad money. Trump did a great job.

  6. Repeating rhetoric that China 'steals' IP is getting old. People catching/learning that these IP were willingly given up by American corporations in exchange for market access which is all designed by WTO rules. American companies reaped the most benefits from globalization. The problem is all that money went to corporate America and the three/four wars (Afghan, Iraq, Syria/ISIS) in the last twenty years. China entered WTO in 2k. Here is another bad news. American will keep falling behind b/c the government failed the people in education, infrastructure, social issues. Our kids are not equipped to compete with the H1Bs (Indians,Chinese,Europeans). Our infrastructure (roads/networks) is outdated. Roads built pre-ww2, networks still on copper wire. Social security is a ticking bomb. Illegal Immigrants (II), dreamers, homelessness are all issues plaguing any local government. It is just a matter of time when every explodes and United States of America will become Divided States of America. The truth hurts. But, in order to reverse course, we must face it like a man. Fix it ourselves, and it starts from within. Fix the broken education system, close the H1Bs loophole, fix II issue, fix homelessness. If we don't do it, another 50 years, India will be ahead of us too!

  7. I disliked this video weeks ago and some how it makes it's way back into my recommended. YouTube forcing this video down my throat. Corrupt youtube decides what I need to watch. Sorry I have a brain, Trump 2020!

  8. The U.S. favors American companies over foreign companies all the time. If China favoring its own companies isn't "playing fair", then neither are we. The fact of the matter is that China has historically been the largest economy in the world. It has been the largest economy for about 1,850 of the last 2,000 years. The West being larger is only a recent trend caused by reaching the Industrial revolution earlier than everyone else. It was only a matter of time till China retook its historical place as the top economy. We shouldn't be trying to stay ahead in GDP, but positioning ourselves to profit off of China's growth instead.

  9. Poor analysis and research right from the start. Why is there a trade war? It's not about who is the bigger economy.
    The White House listed 7 acts of economic aggression:

    1 State sponsored cyber intrusion to seek trade secrets

    2 Forced technology transfer in exchange for market access

    3 State sponsored IP theft in billions USD

    4 Dumping of products below cost to shut down US manufacturing

    5 Currency manipulation – e.g. devaluing RMB by 12% to offset tariff impact

    6 Subsidising state owned enterprise

    7 Producing (legally in China) fentanyl and other opioids which are being shipped to USA via USPS. These are killing 100 Americans a day.

  10. I can't believe in The Economist they call the United States of America as "America". What about the rest of the American continent?

  11. There can be NO real fair trade deal for one reason – capitalism. There's no such thing as a fair trade in capitalism because it's very nature is winner takes all. This is not just a tariff dispute – this is no less than a battle for world economic hegemony – and in the long run there can be only one winner.

  12. If China is that unfair for foreign investments, why on earth does those us companies coming to China? For charity? Why don’t you just go to Japan and Singapore?

  13. "Patient hard workers will win and hungry lazy consumers shall lose" without any doubt!

  14. Vote for Trump in 2020. he is the chosen one, he is the only one who has the guts to face China. head on

  15. 4:43 the China map used is NOT correct, Taiwan, South Tibet and South China Sea is gone.

  16. I'm chinese. the reason is sample that America want to control the world forever and china will destroy America in future!

  17. faaaaeggoogogotgotgogtotgogtotgk illilililtolyyoyoryoyosyosyosryoysrosryoyososklelklsefklsefklklefssef

  18. wow… for being a channel named the economist this didn't explain anything. like the reason the trade war exists.

  19. We've helped China by buying a majority of goods from them. In the short term buy goods from other Asian countries like Thailand. Build alliances with them. At the same time, manufacturer goods here with less labor costs using robotics.

  20. Did I miss the part where they explained how this trade war have impacted China? Because I can't seem to find it. Only saw some information on how it had impacted USA, sure maybe that is the most interesting thing, but I would have liked to see some information on China's industry and how it had been impacted.

  21. It won't end because China likes to slowly team the USA.. they laugh at the "deal maker" Trump. The deal is nothing but a joke just like Trump.. be best

  22. 笑看一群在某处提到贸易战就要被删帖的太监出来评价小姐的服务

  23. US did a lot of intentional civilian killing , with drones , choppers , artillery , tanks , snipers and even infantry , US killed 1.5 million civilians in it war in iraq and afghanistan for "war on terror" ??? they should fight themselves , because they are the real terror , they killed more than any country , but there is still some stupids who still believe in US government , and it lies over it civilians ! "they DON'T KNOW THAT US GOVERNMENT IS CONTROLLING EVERY MEDIA IN THE US AND EUROPE" and i quoted , the only reason they invade iraq is for oil , otherwise they can't continue their massive defense budget without free oil , afghanistan for drugs , yeah drugs , "THEY PRETEND TO FIGHT DRUG TRAFFIC IN AFGHANISTAN , BUT THEY DO NOT ".

  24. Trump’s using the tariffs with China as a stock market scam and a political agenda when his back is against the wall.

  25. The Economist – wrong yet again. I find it incredible that the individuals responsible for this ridiculous video are wrong more often than real economists and the bar is really, really low.

  26. Americas CEOs sold us out to China for a quick buck. Trump is doing this for the average worker.
    I respect China because they put their people first. Trump is now putting American [people] first.

  27. "by not playing fair"
    interesting concept from a country strife with crippling inequality/stratification

  28. This agreement is essentially an agreement between the two sides, no one wins or loses. The overseas Anti China forces advocate that "China wins", which is to provoke the Americans, make them feel that they have suffered losses and hit China again, which is worthy of condemnation! Americans don't trust them, or you should test your IQ

  29. The 'ELEPHANT' in the room which this article 'didn't' report, is that the primary reason for the trade-war is the trade-imbalance with the USA. Also.., the artificially suppressed Yuan.

  30. Just go to china and see it with your own eyes…. China is fine… I think china won the trade war… We can see trump always barking but Xi jinping just calm and take it easy…

  31. 🇺🇸🏴󠁧󠁢󠁥󠁮󠁧󠁿🇫🇷🇯🇵🇩🇪🇦🇺🇮🇹🇮🇳🇷🇺World Economic Cooperation for China to make money but China uses that money to buy dangerous weapons against the World. We can believe the World except China. United Nations, America, Allies and The world needs to vigorously expose the opposite and non-meaning, disregarding China's international law. The world always wants peace and development but China thoroughly takes advantage of this to rob, expand and expand. Economic and Military. The World let's eliminate this huge threat … China's threat of colonial and economic expansion in the Region and in the World is too great. is invading the territory of Vietnam, India and the Philippines. The territory of Japan, South Korea, Taiwan Nation and even the Far East of Russia g is seriously threatened. China is a permanent member of the United Nations but has no responsibility for a member that brings a great threat to the World, immediately expelling it from the United Nations and the WTO. That threat is even bigger when China has nuclear weapons and always despises International law. China is a 10 times bigger threat than Korea and Iran. Trump is the future of America. and of the World. America, Allied and International seek to effectively ban Embargo, destroy China both in Economy and Military to avoid major risks for the World. China symbolizes robbery of the World: robbing copyright, robbing product models, robbing technology, … robbing the Economic and Military security, protecting the fishermen to rob other nations, invading and staggeringly invading the territory of another country …. The United Nations must vigorously unmask, speak out for immediate deterrence.🇺🇸

  32. It's hard to be a millionaire who buys every property in the city and invests it all in foreign markets…

  33. President Trump has always been right about CHINA-
    🇺🇸🇺🇸🇺🇸Trump 2020 🇺🇸🇺🇸🇺🇸

  34. "The US doesn't like that China is growing so fast and set to overtake America as the biggest economy in the world." Wow, looks like someone has been reading their daily dose of Chinese propaganda.

  35. It's about time the us slow down the cheap poor quality goods coming in from china. How many jobs have been lost to the China trade imbalance. However, I am not confident that DT is the person to lead the tariff war against China.

  36. in this video The WTO seems like a charity orgnization and only to China. so it is not because chinese workers works so hard but because they steal the work chances from americans. i only want to ask that in such working enviroment and working for 12-16hours per day, will you or your parents take that job? ? the industries once you do not want and transfer to china ,now you goes down, want it back ,it is ok, but blame china for steal it is a shame. because you know how it pollutes the enviroment and the human body. it is so ironic that on the one hand you deliver your gabage to china and at the same time accuse china's air pollution.

  37. Love america from the philippines.
    Hate china from the philippines.
    U S P H

  38. Title of this video is not right. It should say: United State of America, ‘cause America is a Continent (from Alaska to Argentina).

  39. And, when China first opened up, it gives foreign companies better tax policies than domestic companies. You didn't complain before and are complaining now? The economist in this video just hasn't done homework

  40. Indian civilians are killed by police firing in karnadaka, Delhi airports closed, indian media are worried government action. Many politicians are arrested

  41. American people needs china because china has taking control the usa. It's too late.

  42. China is a superpower wannabe trying to dominate the world by challenging the already-existing superpower of the United States which already dominates the world.

  43. But how it impact other country when if this two countries slapping tariff on each other they can just go buy and sell it to otger country?
    Example : if China doesn't buy soybean again from America they must be buying from somewhere else and the other country that soybean has been bought can just buy it from America ?

  44. The US imposed tariffs on $540 billion dollars worth of goods they buy from China.

    China can only retaliate with tariffs on $120 billion dollars worth of goods they buy from the US.

    That's an enormous trade deficit!!!
    Even Chinese can't deny that!

    China mostly buys food… they're going to run out of food long before the US runs out of cheap plastic gashapon!

  45. China economy slowing way down as of this video, such an economy needs growth not to fail…it's failing, this video is bull ish.

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