AN OVERVIEW OF THE TRADE WAR By Emily Gao
We have all seen the headlines of the infamous trade war between the United States and China. At first glance, it may seem like a petty dispute over monetary profit between the two nations, but the underlying economic and political intentions of Trump’s recent decisions stem from much more. To fully understand this ongoing trade battle, we must first dive into China’s economic history. Its role in the global economy started in 1978 with President Deng Xiao Ping when he opened the nation’s markets to foreign trade.
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Since then, China has established itself as the world’s manufacturing center, leading to unprecedented economic growth. According to The Economist, China’s GDP was a mere 6% of that of the United States in 1978. In 2018, China’s GDP was 66% of that of the US, and if one assesses based on local spending power, China has exceeded the US in that realm. In 2001, Bill Clinton encouraged China’s entrance into the World Trade Organization (WTO), an organization that ensures the smooth sailing of international commerce via rules and regulations. Clinton believed that this would
stimulate the economically symbiotic relationship between the two nations and also urge the communist nation to adopt more of a western capitalist approach to its economics. In Trump’s eyes, as well as the eyes of many economists, the latter was not achieved. The Trump administration claims that China achieved such rapid economic superiority by cheating its way through the system. David Rennie, the Beijing bureau chief of The Economist, points out that China heavily subsidizes its companies by giving advantages such as free land,
