The US-China Trade War: Who Compromised And How?

Felix Dubois

5 min read

Post on May 15, 2025

4.6

Share

Initial US Actions and China's Response

The Trump administration's initiation of Section 301 tariffs marked a pivotal moment in the US-China trade war. These tariffs, targeting Chinese goods worth hundreds of billions of dollars, stemmed from concerns about intellectual property theft, forced technology transfer, and the persistent US trade deficit with China. Keywords like "Section 301 tariffs," "intellectual property theft," and "technology transfer" dominated the headlines.

• Section 301 Tariffs: These tariffs, imposed under Section 301 of the Trade Act of 1974, aimed to address what the US considered unfair trade practices by China. The tariffs were not solely about revenue generation; they served as a powerful tool to pressure China into making concessions.

• China's Retaliation: China swiftly retaliated with its own tariffs on US agricultural products, including soybeans and pork, along with other goods. This tit-for-tat escalation significantly impacted US farmers and businesses, highlighting the interconnectedness of the global economy. The resulting trade war significantly impacted the global economy, with ripple effects felt across various sectors. The focus on the trade deficit became a central point of contention.

• Early Negotiation Stalemate: Early negotiations between the two countries yielded little progress. Both sides dug in, with neither showing a willingness to make significant concessions on core issues. This initial phase was characterized by a lack of compromise and rising tensions.

The "Phase One" Trade Deal and its Compromises

The "Phase One" trade deal, signed in January 2020, represented a partial de-escalation of the trade war. While far from a complete resolution, it marked a significant turning point in the negotiations, introducing key concessions on both sides.

• China's Purchase Commitments: A central component of the deal involved China's commitment to purchase a substantial amount of US agricultural products over a two-year period. This commitment aimed to reduce the US trade deficit and support American farmers. However, whether China fully met these purchase commitments remains a subject of debate and analysis.

• Intellectual Property Protections: The agreement included provisions aimed at improving the protection of intellectual property rights in China. This addressed one of the US's key concerns regarding unfair competition and technology theft. While improvements were made, complete enforcement and eradication of these issues remain a work in progress.

• Unresolved Issues: Despite the concessions, many core issues remained unresolved. These included concerns about technology transfer, the role of state-owned enterprises in the Chinese economy, and the broader question of China's economic practices. The "Phase One" deal was essentially a temporary truce, leaving many underlying tensions unresolved.

Subsequent Developments and Ongoing Tensions

The COVID-19 pandemic further complicated US-China trade relations, causing widespread supply chain disruptions and exacerbating existing tensions. The pandemic exposed vulnerabilities in globally integrated supply chains and accelerated trends toward "decoupling" – reducing economic interdependence between the two countries.

• Supply Chain Disruptions and Decoupling: The pandemic highlighted the risks of relying heavily on a single country for crucial goods and services. Both the US and China focused on bolstering their domestic industries and reducing reliance on each other, leading to concerns about potential long-term economic fragmentation.

• Technological Rivalry: The trade war extended beyond tariffs to encompass a broader technological rivalry. Both countries have invested heavily in developing advanced technologies, leading to increased competition and potential conflict in areas such as 5G, artificial intelligence, and semiconductors. This technological competition has added another layer of complexity to the overall relationship.

• Biden Administration's Approach: The Biden administration, while maintaining a tough stance on China, has adopted a more nuanced and multilateral approach compared to its predecessor. While still addressing concerns about unfair trade practices and human rights, the emphasis has shifted towards building alliances and engaging in international cooperation.

• Assessment of Ongoing Compromises: Assessing who ultimately compromised more requires a comprehensive evaluation not just of immediate concessions but also the long-term consequences for each nation's economy and geopolitical standing. The ongoing dynamics of the trade relationship are far more intricate than a simple assessment of initial concessions.

Conclusion

The US-China trade war was a complex and multifaceted event, with both sides making compromises and concessions. While the "Phase One" deal offered a temporary reprieve, significant challenges remain. Determining who ultimately compromised more is not a straightforward task. It necessitates a detailed analysis not just of the immediate trade concessions but also the longer-term implications for economic growth, technological advancement, and geopolitical influence. The evolving nature of this complex relationship means future analysis will continue to illuminate the lasting effects of these negotiations and shape future trade policies. Understanding the intricacies of the US-China trade war and its various compromises is crucial for navigating the complexities of global trade. Further research into the ongoing implications of this significant trade dispute will provide a clearer picture of its lasting impact on global trade relations.