UPDATED 9:17 AM PT — Friday, May 10, 2019
Over the course of his presidency, President Trump has placed significant pressure on China to come to a fair trade agreement with the U.S. The question is — how did the trade war, which has been called “the most costly trade conflict” in economic history, get to this point?
President Trump has a long history of criticizing China for unfair trade practices. He often cited a $500 billion trade deficit between the two countries, during his 2016 presidential campaign.
“We can’t allow China to rape our country, and that’s what they’re doing,” he stated.
Trade negotiations started shortly after the president took office in 2017, where they made a 100-day action plan in hopes of resolving trade differences. However, such differences could not be resolved in that time frame. This resulted in the president’s first China-specific trade tariffs on July 6, 2018. The measure targeted $34 billion worth of Chinese goods, causing Beijing to retaliate with tariffs of equal value.
Since then, the U.S. has implemented a number of hikes on Chinese products. They have culminated into $250 billion of tariffs applied toward Chinese goods as of September of last year, with China implementing a total of $110 billion on U.S. exports in return.
Following months of negotiations, both countries agreed to a temporary truce in December 2018, which was meant to last through January 1, 2019. Following the truce, it seemed increasingly possible that a trade deal could be reached. Both sides expressed optimism for where the negotiations were headed.
“We’re trying to work out a trade deal with China — I think it will happen, something will happen, but it’s a very big deal,” said President Trump. “If it does happen, it will be by far the largest trade deal ever made.”
This led to both sides agreeing to extend the truce until March 1, 2019 and then again indefinitely until President Trump announced a new tariff hike on May 5, 2019. President Trump defended his decision by saying higher tariffs would make China more likely to come to an agreement faster. The tariffs went into effect Friday at midnight, with both sides itching to come to an agreement.