Growing rivalry between the United States and China is eroding trade ties

While trade between the US and China continues to increase despite imposed tariffs and restrictions, especially in the field of technology, China’s share of total US imports is declining.

There was a boom in trade between the United States and China in the period after China joined the World Trade Organization in 2001. The value of American imports of goods from China, which was approximately $100 billion in 2001, it will exceed $500 billion in 2022.

While the United States and China are among each other’s largest trading partners, the two countries’ interdependence, geopolitical tensions, and supply chain disruptions have occasionally put U.S.-China trade at risk.

While Chinese companies supported by state subsidies gained a significant advantage in international competition, the United States’ strong position in the global economy was threatened by China’s rapid development.

Trade between the two countries, which once benefited both American and Chinese consumers and businesses due to low prices and high profits, has now led the US administration to become increasingly concerned about risks such as the loss of manufacturing jobs, national security and currency manipulation. caused by the development of China.

NATIONAL SECURITY CONCERNS WERE EFFECTIVE

Donald Trump, who handed over the office of US president to Joe Biden on January 20, 2021, imposed billions of dollars worth of import tariffs on China during his presidency. While Trump’s successor, Biden, continued with tariffs against China, there were also restrictions on the export of some technology products, such as artificial intelligence chips, to China.

US Secretary of Commerce Gina Raimondo argued in her statement that they did not intend to harm China’s economic growth with export restrictions.

Underscoring the importance of national security, Raimondo explained that the goal is to prevent China from accessing advanced semiconductors that could trigger advances in the field of artificial intelligence, especially in military use.

Treasury Secretary Janet Yellen also highlighted the importance of Indo-Pacific countries to the US economy and stated that the Biden administration is determined to expand trade and investment with the region.

Stating that the United States is not trying to separate itself from China, Yellen said: “Complete separation of our economies or an approach in which countries, including those in the Indo-Pacific, are forced to take sides will have significant negative effects on China.” global level. “Given the scale of economic interconnections in the Indo-Pacific region and the complexity of global supply chains, this is simply impractical.” he said.

SUPPLY CHAINS REMAIN INTERESTED

Bilateral trade between the United States and China has continued to expand despite “trade wars,” the pandemic, the Russia-Ukraine war, and geopolitical tensions. In the first nine months of the year, US imports from China exceeded $316 billion, while the total trade volume between the two countries approached $422 billion.

However, China’s share of total US imports, which was approximately 22 percent in 2016, decreased to 14 percent in September 2023. Notably, this decrease was concentrated on goods subject to tariffs.

Although the United States and China appear to become less dependent on each other in trade, their supply chains have remained intertwined, especially for strategic products.

Considering the total volume of exports and imports as of September of this year, Mexico was the number one trading partner of the US with approximately 600 billion dollars, followed by Canada with 582 billion dollars. Thus, China ranked third among the United States’ trading partners in total volume of imports and exports.

In the nine months of the year, Mexico’s share of total US imports surpassed that of China with 15.5 percent.

COMMUNICATION HAS BEEN STRENGTHENED

During US President Biden’s meeting with Chinese President Xi Jinping last year, it was agreed to increase cooperation on issues such as macroeconomics, climate and debt distress.

Washington-Beijing relations, stalled due to the crisis caused by the entry of a Chinese high-altitude balloon into US airspace in February, have intensified high-level contacts since June.

Following US Secretary of State Antony Blinken’s visit to China in June, which he canceled due to the balloon crisis, Yellen and Special Representative for Climate Change John Kerry visited the country in July, and Raimondo visited the country in August.

Furthermore, in the “Report on Macroeconomic and Foreign Exchange Policies of the United States’ Major Trading Partners” submitted to Congress, the US Treasury Department reiterated the Treasury’s call for China to increase transparency.

The report noted that China’s failure to publish its foreign exchange intervention and a broader lack of transparency over the basic features of the exchange rate mechanism placed the country in an outlier position among major economies, and stated that this situation required Treasury will closely monitor China. .

STABILITY HAS A PURPOSE

On the other hand, in the statement from the Ministry of the Treasury it was reported that Minister Yellen will meet with the Vice Prime Minister of China in charge of economic relations, Hı Lifıng, in San Francisco on November 9 and 10.

It was highlighted in the statement that the meetings will take place at a time when diplomatic traffic between the two countries is intensifying, and that the meetings to be held today and tomorrow, just before the Meeting of Finance Ministers of the Forum Asia Pacific Economic Cooperation (APEC), Its objective is to stabilize bilateral economic relations between the United States and China and achieve progress on basic economic issues.

Yellen stressed at every opportunity that they are seeking a constructive and fair economic relationship with China and said that Beijing’s “unfair economic relations,” including the large-scale use of non-market instruments, obstacles to market access and coercive actions against US companies. in China, with Lifıng, who stated that she would discuss her serious concerns regarding “their practices.” (AA)