No overture or prelude
An outside observer may well get the impression, that it all started from a mere trifle. 23 January 2018 US President Donald Trump decided to impose a 30% customs tariff on solar panels imported into the country. China has long been the world leader in their production, which was an unpleasant surprise not only for the United States with its high-tech industry. Even the Russian corporation Rosnano, headed by Anatoly Chubais, got burned, which burst the project for the production of panels in the Irkutsk region.
The increased tariff was appointed for four years, with an annual decrease in 5 percent. points (up to 15 percent level). That is, until then, until their own American production is established. China limited itself to, which expressed "strong disappointment" with similar actions of the United States.
The Trump administration went beyond solar panels and raised import tariffs on large household washing machines for three years.. And although war has not yet been declared, a certain syndrome could already be felt. China was actually allowed to export no more than 1,2 million. washer, for which the tariff was introduced in 20 percent, and for the export of the rest it was necessary to pay already prohibitive 50 percent. Phased down to 16 and 40 percent, respectively, was provided in this case, but the essence of the matter did not change.
Trial balloon launched. President Trump did just that, what he planned during his election campaign. He did not hide his desire to balance the country's foreign trade, primarily in relations with China.. By the way, became president, Donald Trump generally somehow badly began to build relations with China. He was the first of all post-war US presidents to call Taiwanese President Tsai Ingwen almost immediately after his inauguration - it is difficult to think of a greater insult for Beijing..
The Trump administration actually began to develop plans to limit Chinese investment in the United States and impose protective tariffs only in March. 2018 of the year. One of the proposals was, that the US can only allow Chinese investment in those sectors, where Americans can invest in Chinese companies. Thus, the principle of reciprocity should be ensured..
By that time, the US Trade Representative's investigation into the theft of intellectual property by China had been completed.. American experts have finally revealed that, that was known to all and for a long time. true, there were no specific figures, and now it was about the billions in losses of leading American corporations. The trade representative also estimated the damage at hundreds of billions of dollars., which inflicts on American trade the use of various kinds of discriminatory practices by China.
And already 22 Martha 2018 US President Donald Trump signed a memorandum “On fighting China's economic aggression”, allowing you to impose restrictions on products from China. On the same day, the owner of the White House decided to prepare and publish a list of duties, which will be increased in connection with the results of the investigation. Besides, the president not only initiated proceedings on the revealed facts within the framework of the WTO, but also to start developing mechanisms to limit Chinese investment in strategic sectors of the US economy.
This was already a de facto declaration of war, whom, but, almost no one noticed. And in the USA, and in China, many continued to count, that things are unlikely to come to real "fighting". However, it came, and in the simplest and most accessible form - by imposing sanctions, as well as protective tariffs and duties.
In accordance with the presidential memorandum, a list of goods was made public in early April, subject to a 25% increase in duties on imports from China. In the list, which included more 1300 trade items, almost everything could be found, what today can be listed in the field of high technologies, starting with consumer electronics, equipment and medical supplies to aircraft parts, even satellites, etc., the total volume of imports to the United States which amounted to about 50 billion. The only thing missing was weapons and products of the nuclear industry - the United States practically does not trade these with China.
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Counter attack, another hit...
A one-sided game is not about trade wars. China's retaliatory measures were not long in coming. 1 April China imposes additional duties on American meat, fruits and a number of other goods. So, duty in the amount 25 percent was set for American pork and… scrap aluminum. About 120 various goods, mostly food, in high demand in China, were subject to 15 percent duty.
The Chinese chose their points very carefully., hitting which will be the most sensitive. And it is not only, that the import of these goods that immediately rose in price from the United States to China in 2017 I have made 3 billion. dollars. The thing is, that it is not at all easy for the Americans to immediately abandon it because of existing long-term contracts.
Experts on both sides immediately drew attention to the selective nature of Chinese countermeasures.. China made every effort to demonstrate its readiness to enter into negotiations, while developing mechanisms, which could maximize the price, that US businesses and consumers will have to pay as a result of new trade restrictions.
However, under American pressure, China was soon also forced to move to larger-scale actions. "Fighting" acquired a special scope after, as 15 June 2018 2009, there were reports that the US President was preparing to introduce customs duties in the amount of 25 percent for the next group of Chinese goods. The American side again justified duties not only by the need to protect the American manufacturer, but also the old accusations of China infringing intellectual property rights.
Analysts then immediately called the "issue price" - at least 50 billion. dollars. But by last summer, the United States and China managed to impose trade duties on each other in the amount of, amounting to 68 billion. dollars. But the exchange of blows had just begun. 16 billion dollars - this was the amount of goods from the USA, which fell under the new Chinese duties in 25 percent from 23 August 2018 year in accordance with the decision of the Committee on Customs Duties under the State Council of the People's Republic of China.
Since it became known two weeks earlier, the American administration decided literally to the day, 23 August 2018 city, introduce duties in the amount 25 % for goods imported from China; were included in the list 279 items of Chinese products with a total value 16 billion. dollars. And all on the same day, 23 August, China complained about the United States to the World Trade Organization (VTO). Relevant claim, by the way, considered so far.
characteristically, that China, almost until this spring, tried to take defensive positions in the trade war, only answering blow for blow. However, after the collapse of recent negotiations, from which many expected, if not peace, then a truce, China will simply be forced to take tougher and faster countermeasures. China, according to experts, certainly, will be under a lot of pressure due to the increase in tariffs, however, he still manages to keep this pressure under control.
Ready or not, here I come
One of the reasons for that, that at first few people noticed the American-Chinese war, has become the entire trade policy of the Trump administration. After all, since 2017 the United States was at war with almost the whole world at once. Sanctions and tariff restrictions have become almost the norm for Washington. And when Trump decided to hit China hard, in parallel, duties were introduced in the "favorite" amount 25 percent for steel from Russia and Japan.
Aluminum, extremely necessary for the American aviation industry, at the same time, they were not so heavily imposed - only 10 percent duties. And if only Russia and Japan were the "victims", no one would be surprised by this. Under the blow of "protectionist" Trump, as if in bulk, the European Union also fell, and Mexico, and Brazil, and Australia, and Argentina. And even neighboring Canada, which Washington clearly decided to punish for too rapidly increasing trade with China, especially in the sensitive high-tech sector. All these "clients" were only given a slight reprieve - additional duties began to take effect from 1 June.
clear, that the EU, like China, also had to respond. 20 June 2018 of the year, almost against their own interests, The European Union went to the introduction of 25 percent tariffs on a number of American goods, from orange juice and whiskey to motorcycles. At the same time, almost all American shoes, many types of clothes, including the most popular brands, and washing machines (remember, they were among the first) fell under the 50% duty, which, taking into account the already very high prices for products from the USA, cannot be called anything other than protective.
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2,8 billion dollars - this amount was immediately estimated at the new tariff restrictions on American goods. As if in passing, Turkey also got, which was more of a non-economic necessity, but Washington's reaction to the too independent policy of a NATO ally. 10 August 2018 of the year, the “advanced” American president announced via Twitter about increasing duties on metallurgical products imported from Turkey: for aluminum up to 20 percent, on steel - and even up to 50.
And the battlefield goes to marauders
Looks like, when it all started, in Washington really counted on a landslide victory. At the same time, the American media happily quoted the publications of Chinese colleagues., who did not hide their anxiety. Already at the start of the conflict, they talked about great damage to the Chinese economy. In China, not only has there been a discussion about, What are the consequences of a trade conflict with Washington?, but also nervously expressed a variety of assumptions on this topic.
Officer, of course, made it clear, that many American decisions only stimulate positive transformations in the Chinese economy, helping to find new markets and other partners. Nevertheless, more and more people preferred, and now they continue to prepare for the worst. Wrote about queues at banks for cash dollars. In the business press, there were serious offers to “surrender”, which in recent years is quite typical for a number of Russian representatives not only of the mass media, but also the business community.
Now, in China, it seems, begin to get used to military realities. Increasingly, there are arguments about, that in this conflict, not only China will lose in the end, but the US itself, and the latter even more. The cream will be skimmed off by all those, who does this at the expense of various kinds of sanctions, that is, a variety of offshore and shell structures, third countries, who are not accustomed to not disdain anything.
However, even very squeamish players can win, for example, the same Canada, Australia and Great Britain. After all, if China is seriously engaged in a scrupulous analysis of the activities of overseas companies in the country, a global revision of the surplus of all US services exports is quite possible. So, ordinary Chinese today without any doubt spend almost 15 billion. dollars for American travel and educational services.
Reducing these costs is easy., and the Americans will immediately be replaced by the British with the Australians and ... Canadians, who sometimes seriously lose income due to various kinds of American economic experiments. characteristically, that many very modest Russian enterprises in the Far East, e.g. from the food industry, are already cutting coupons due to the fact, that the United States, with its duties and sanctions, is increasingly opening up the Chinese market for them.
To ordinary Americans, who once voted for "his boyfriend" Trump, sobering also comes. After all, the permanent increase in duties by the American side is becoming more and more like economic suicide.. Under the Iron Curtain, even the Soviet Union had a hard time, and the open US economy can even drive itself into a dead end.
Not so long ago, the American consulting company "Global Trading Partners" ("Partners of Global Trade") published a study, which shows, that the increase in customs duties to 25 percent of Chinese imports to the United States in the amount 250 billion. dollars leads to the annual loss of Americans 934 thousand jobs.
If the US raises tariffs on other goods, which are imported from China, and this is already pulling 325 billion. dollars, every American family will pay for alternative goods, even if not American, on 2 thousands of dollars a year more. This will result in the loss of more than two million jobs.. It is unlikely that these two million will vote for Trump and the Republicans.
Ending to be...
Alex Podymov, Anatoly Ivanov, Dan., Professor
