The China-US trade is at painful risk as per the 2023 survey of Western business firms; it has been reaffirmed that both countries are severely decoupling in anticipation of economic war. The US National Security Adviser has clearly stated that the USA is for de-risking, not for decoupling. The European Commission president, in a statement, said that US export controls would remain narrowly focused on technology that could tilt the military balance. Still, US Treasury Secretary Janet Yellen argued that the USA wanted to avoid complete decoupling from China. The leader of G-7 has expressed that now China is based on “de-risking, not decoupling.”
The USA is now decreasing economic relations with China, though the trade in goods between the two countries increased to $690 billion last year. The Biden Administration wants to insulate the global economy and is attempting to shift more production of chips back home.
Though Donald Trump started the de-risking policy to reduce the trade deficit between the USA and China, Beijing rejected that policy on the free flow of US capital and trade. Even with covid-19, China has always believed in opening businesses of just-in-time manufacturing goods. The Biden Administration tried to thwart China’s investment in strategic sectors tied to national security. China remains the third largest business partner of the USA after Canada and Mexico, in 2022. It has also been indicated that the EU imports from China have gone up by 50 percent since 2016
The USA is worried about Chinese trade in EU and other Western countries. US exports to China were 23 percent lower than their projected level in 2022. The USA exports more agricultural products to China and less manufactured goods like semiconductors and advanced electronic equipment. When Trump’s tariffs went into effect, the USA imported 38 percent of goods from the rest of the world instead of China.
Experts of international relations say that the relationship between China and the USA is at its lowest point in decades; both countries are trying to reduce the diplomatic tension. China is worried about Taiwan, while the USA is trying to restrict China on access to technology and Xi’s backing of Vladimir Putin’s invasion of Ukraine.
The U.S. wants to achieve concrete progress on US interests and insists China pressurize North Korea to end its nuclear programme, it will pave the way for trade between the two countries. On the other side, the Chinese want a peaceful relationship with the USA to restore people-to-people ties and pursue its goals for trade and commerce.
Since the weather-balloon incident, the USA’s worry about China rose, while Chinese officials grumbled that the USA had a hostile attitude toward China to suppress them in a trade war. The Biden Administration is trying to bring a breakthrough in US-China trade relations, and the USA is in a complex situation whether to keep tariff charges on Chinese goods or not. But still, they endeavour to continue dialogue on various levels.
Former US President Trump imposed tariff charges on China in 2018-19 under section 301. It was assumed that China was misappropriating US intellectual property and coercing US companies to transfer sensitive technology to do business of $370 billion. Wang Wentao, a Chinese commerce minister, rejected the 301 tariffs as an issue and declared that it had affected the Asia Pacific Economic Cooperation trade severely.
The Biden administration and European allies have desired to de-risk, not decouple, the Chinese economy with not only a slew of new restrictions on trade with Beijing, but Beijing has rejected this concept and informed the USA that such policy would hamper the Chinese economy and further has explained that such a decoupling policy will slow the opportunities, stability, cooperation and development on a larger scale. Washington trying to deprive China of cutting-edge chips over national security concerns is just a new technology cold war with China.
The U.S. wants to achieve concrete progress on US interests and insists China pressurize North Korea to end its nuclear programme, it will pave the way for trade between the two countries. On the other side, the Chinese want a peaceful relationship with the USA to restore people-to-people ties and pursue its goals for trade and commerce.
In the last APEC meeting, both officials discussed bilateral economic and trade ties and related issues of concern. Xi, in his speech, expressed that there are “profound differences between the two countries”. We still hope that the relationship between the two countries may advance.
