The trade war between the U.S. and China is heating up. President Donald Trump has issued a series of tariff hikes in order to jumpstart American manufacturing and address the trade deficit. Since the US first imposed tariffs on Chinese goods in January of this year, the US and China have been locked in an intense tariff war. Now even that has changed — recent negotiations have triggered what Trump refers to as a “total reset” in their trade relations.
Trump launched 232 tariffs against steel and aluminum to force American consumers to buy US-made products. His stated aims were to raise more tax revenue and restore manufacturing jobs to the U.S. However, in the latest US-China agreement, these supplemental US tariffs on Chinese imports will be reduced from 145% to 30%. At the same time, Chinese tariff increases on many US consumer goods are scheduled to drop from 125% to 10%.
The US imports a huge $440 billion worth of goods from China, but sells back just $145 billion. In fact, Trump has been whining about this trade deficit for decades. His administration’s recent actions take steps to address this inequity while increasing the creation of jobs here at home.
The onus is largely on the UK to continue discovering and making the request public. In part to mitigate friction over tariffs on steel, aluminum, and automobiles, USMCA supporters argue, the three countries worked out a deal. Brexit agreement undermines dairy by requiring UK to “swiftly accede” to US wishes. This appreciation extends in particular to securing all supply chains for steel and aluminum products exported to America. The UK government emphasized this deal is “in the national interest to secure thousands of jobs across key sectors, protect British businesses and lay the groundwork for greater trade in the future.”
This deal has created a bit of stir in China. Chinese officials are concerned that the UK-US deal is the first of many to cut China out of supplying goods directly routed to the US market. Lin Jian, a representative from China, stated, “As for the trade agreement… between the UK and relevant countries, I would like to point out that cooperation between countries should not target or harm the interests of third parties.”
The UK government has responded to these concerns by clarifying that their agreement with the US is “not designed to undermine mutually beneficial economic relations with any third country,” and asserted that there is “no such thing as a veto on Chinese investment in this trade deal,” according to the Chief Secretary to the Treasury.
Both countries are taking aggressive steps to boost their trade surpluses. At the same time, continuing tariff discussions with China have underscored the volatility of the global trading environment. As countries deal with these transitions, they will need to balance their national interests with the interests of the world.