The US-China Trade War

The trade conflict is increasingly affecting tech development in both countries.

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The Basics

When did it begin?

The trade conflict between the United States and China began when President Trump first imposed tariffs on foreign goods last year. Though his first were on solar panels and washing machines in January, 2018, his tariffs on steel and aluminum later that March were the first significant move.

In April, Trump imposed a 25% tariff on 1,300 products from China. China retaliated with tariffs on 128 American products exports, perhaps most famously soy beans.

Both sides have increased tariffs since.

How is the trade war begin fought?

Three ways:

1. Tariffs: To counter their trade deficit and China's alleged IP infringement, the Trump administration began initiating tariffs in 2018. They argue that tariffs, which add to the price of goods coming into the country, will bring the price of Chinese-made products closer to those made in America.

2. Blacklisting companies: To counter China's tech ambitions, the Trump administration has blocked several organizations from purchasing components (like microchips) and lisencing software (like Android) from American companies. By adding them to its Entity List, the U.S. can deprive large organizations of fundamental parts of their tech stack. The organizations include telecommunications companies like Huawei, aeronautical and other advanced science institutes, and supercomputer makers like Sugon. In the summer of 2018, Trump de-banned another telecom company, ZTE, as a gesture of goodwill during negotiations.

3. In one case, arrest: In December, 2018, Huawei's CFO was arrested in Canada at the request of US officials. She remains under house arrest in Canada and may be extradicted to the United States on fraud charges.

Relevant People

Meng Wanzhou is the CFO of Huawei

Xi Jinping is President of the People's Republic of China

Zhang Yiming is the 36-year-old founder and CEO of ByteDance

Go deeper

How the US sanctions and isolates companies and governments: the Entity List

October 9th

Trump's argument for the US-China Trade War

October 6th