Friday, April 23, 2021

The US-China Trade War is more than just a ‘War for Trade’

The US-China trade war is assumed to be a feud between the two nations to bag better trade concessions. However, the US-China trade war is much more than that! While trade concessions may be the tip of the iceberg, the US-China trade war is really about the US trying to bring about a change in the industrial and economic policies and approach in China, as reported by the South China Morning Post.

The US-China trade war has been the front page news for weeks and it seems that only now the media realises the actual root of it. The US-China trade war is not about trade or even about President Trump; it’s a much greater and deeper issue. Observers believed that the ‘war’ was aimed at taking out the trade concessions that reduced the deficit from China, as an attempt to appeal to Trump’s voters.

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The US-China Trade War is a Politically Motivated Change

The Department of Commerce in the US has recently banned US-based companies from selling parts to ZTE, a Chinese state-owned phone company. The ban has been put for a period of 7 years. The Department stated a non-compliance of terms as the reason behind the ban. As a retaliation, China extended its scrutiny over Qualcomm, a US-based chip manufacturer, stating problems in market competition. Both companies say that the government of both the nations are only following due protocol and the US-China trade war and rising economic rifts were not causing the changes.

However, experts believe that these moves, including previous such actions, are all politically motivated. All initial assumptions leading up to the US-China trade war thus seem inconsequential.

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The US-China Trade War Demands a Change

US administrators have often complained about China’s over-protection of the domestic market and heavy barriers making entry into the Chinese market a difficult task. Initially, China claimed these policies were necessary for a developing nation but as the country has grown to become the 2nd largest economy in the world, this basis doesn’t stand true anymore. This fact has perturbed the US which believes that China cannot carry on such mercantile policies.

Thus, the US-China trade war is much more than the trade concessions and focuses on bringing about an economic and industrial change in the policies that China is operating trade upon. While this could lead to China further working on it’s Made in China 2025 import program or the US may be successful in pressurising China to abide by policies followed by other nations. The US is intensifying the pressure on China to take up international market best practices.

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