The U.S. – China Trade War
The Trump Administration wants to fix China’s unfair trade practices with the U.S. The
Administration is concerned that China is violating intellectual property rights and
imposes high tariffs on American goods being imported.
As per Section 301 of the Trade Act of 1974, this Act authorizes the President to make
the necessary arrangements, including retribution, to obtain the elimination of any
policy, act or practice of any foreign government that violates an international trade
agreement or in not reasonable, unjustified or discriminatory, which restricts or hampers
Section 301 gives the President the authority to impose fines to a trading foreign
country, if there is evidence or beliefs that unfair trade practices are harming U.S.
The U.S. filed a request to the World Trade Organization, with concerns that China is
violating intellectual property rights. The Trump Administration suspects that there are
certain laws in China that offset intellectual property rights by obligating foreign entities
to engage in joint ventures with companies in China, providing the China partneringcompany access and permission to use, improve or reproduce their technologies.
Additionally, the U.S. states that the Chinese government is not in compliance in
recognizing legitimate patents and that their policies discriminate against foreign
imported technology. The Trump Administration suspects that this is costing the U.S.
$200 – $500 billion dollars per year.
Additionally, the Trump Administration believes that increase tariffs on U.S. imports from
China are necessary to protect intellectual property of U.S. companies and to help in
reducing the U.S. trade deficit with China; as of July 2018, the current trade deficit is
stated to be + $200 billion, according to the U.S. Census Bureau.
President Trump is committed to lower the trade deficit with China. On March 1,
2018, he announced he would impose a 25 percent tariff on steel imports and a 10
percent tariff on aluminum. On July 6, Trump’s tariffs went into effect for $34 billion of
Chinese imports. China canceled all import contracts for soybeans.
Trump’s tariffs have raised the costs of imported steel, most of which is from China.
Trump’s move comes a month after he imposed tariffs and quotas on imported solar
panels and washing machines. China has become a global leader in solar panel
production. The tariffs depressed the stock market when they were announced.
On January of this year, the Trump Administration placed a 30% tariff on solar panels
manufactured abroad; to be reduced to 15% after four years. China is the world leader
in solar panel manufacture. Also, in January, 20% tariffs were placed on washing
machines for the first 1.2 million units imported during the year. In 2016, China exported
+ $400 million worth of washing machines. Trump stated that the U.S. will impose a
25% tariff on $50 billion of Chinese exports, some tariffs already in effect. An additional
10% tariffs were imposed on another $200 billion worth of Chinese imports