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What are the views on the US - China trade war? Show more Show less

Donald Trump's protectionist economic policies led to the introduction of tariffs on $550 billion worth of imports from China. President Xi Jinping responded with tariffs of his own, affecting some $185 billion worth of US-made products. As the two global economic behemoths enter a trade war, what are the implications for both economies and the rest of the world?

The trade war is illegitimate Show more Show less

While China does engage in unfair trading practices, the trade war violates international norms. The U.S. should not have used a coalition instead of a bilateral approach. It also should have used a more effective means of retaliation instead of tariffs.
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The trade war is an inappropriate way to deal with China’s unfair trading practices

While China does engage in unfair trading practices, the trade war was not an appropriate response. Tariffs will not be effective. The U.S. should have used a coalition instead of a bilateral approach.
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Context

The Argument

The United States is correct in stating that China practices unfair trading policies. As EU trade commissioner Cecilia Malmstrom said China has “blurred the lines between state and private sector…Intellectual properties of companies are stolen. State subsidies, direct or indirect, are common. And these impacts are felt at home and abroad”.[1] However, the bilateral approach that the U.S. has taken to deal with this problem is not a legitimate solution. First, this is not the responsible action. The U.S. should have built a coalition with other major trading partners that have been harmed by China’s practices such as the EU, Japan, and Australia. It is an irrational strategy to try to single-handedly force China to change its trading practices when it is the world’s second-largest economy. President Trump should focus on using the WTO to change its treatment of China and force China to renegotiate its membership. Trying to institute change on its own weakens the WTO and lessens the United States’ credibility in the eyes of the world.[2] Second, this strategy is ineffective. Tariffs do not work when China’s companies are given subsidies and the prices are artificial. The trade war hurts China, but it also hurts the U.S. and the entire global economy. The pervasiveness of globalization is another reason why tariffs are ineffective; products cross into many different countries for many different stages of formation before they end up in the consumers’ nation. Trade is multilateral so a bilateral approach to resolving the issue will not work.[2] Another problem with this approach is that the United States is too focused on decreasing its trade deficit with China. The U.S. and China coming to a deal would not help China’s dealings with other nations. If the deal means that China buys more from the U.S. to lessen the trade imbalance, then China will be buying less from other countries. This hurts those countries and is not a solution to a global problem.[1]

Counter arguments

The United States has the right to defend itself from unfair trade practices. There is no reason that it cannot do this independently of other nations or the WTO. The trade war was the best way to force China to stop its practices which would be beneficial for the world. Also, tariffs have hurt China. The tariffs on imports have meant higher prices for China’s citizens.[3] The tariffs on exports have hurt Chinese businesses and the economy by decreasing exports and manufacturing.[4]

Framing

Premises

[P1] The United States is right that China practices unfair trading policies. [P2] The bilateral trade war is not responsible. [P3] Tariffs are ineffective. [P4] A deal to end the trade war could only help the United States. [P5] The trade war was an inappropriate response.

Rejecting the premises

[Rejecting P2] The United States has the right to defend itself from unfair trade practices. [Rejecting P3] The tariffs have hurt China’s economy. [Rejecting P4] Getting China to change its trading practices would benefit everyone. [Rejecting P5] The trade war was the best way to force China to change its trading practices.

Proponents

Further Reading

References

  1. https://www.reuters.com/article/us-usa-trade-china-trump-analysis/trump-push-for-china-trade-reform-draws-wide-support-at-home-abroad-idUSKCN1R60D5
  2. https://www.forbes.com/sites/harrybroadman/2018/04/09/the-coalition-based-trade-strategy-trump-should-pursue-toward-china/#3c997ae77b9e
  3. https://www.nytimes.com/2019/06/04/business/china-food-prices-inflation.html
  4. https://www.npr.org/2019/10/10/768569711/has-the-trade-war-taken-a-bite-out-of-china-s-economy-yes-but-its-complicated
This page was last edited on Friday, 19 Jun 2020 at 00:59 UTC