US-China trade relations
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US-China trade relations have evolved significantly over recent years, marked by complex negotiations and shifting economic priorities.
Historical Context
Historically, the US viewed trade with China as a means to achieve larger diplomatic goals, such as full normalization of relations. US leaders like Nixon and Carter saw trade as a secondary tool to support diplomatic efforts, whereas Chinese policymakers prioritized diplomatic progress before trade benefits 1 2.
Recent Developments
- Tariff Wars and New Policies: Under Trump, the focus was on imposing tariffs to compel China to compete fairly in international trade. However, these tariffs did not significantly change trade volumes as expected. The Biden administration is now focusing on scrutinizing US investments in China and enhancing cooperation with allies on subsidies and technologies 3 4.
- Strategic Shifts: The Inflation Reduction Act and other policies aim to reduce dependency on the Chinese supply chain for critical materials, reflecting increased national security concerns and changing economic strategies 3.
- Trade Agreements: A significant trade deal in late 2019 involved the US reducing tariffs in exchange for China's commitments to purchase American farm products and improve intellectual property protections. This agreement was seen as beneficial for the US economy despite concerns about partnering with China 5.
Economic Interdependence
Despite dramatic policy measures, China remains a crucial global trade player, with export volumes increasing significantly. The interconnectedness of global supply chains complicates efforts to disentangle economic ties without collateral damage 6.
The landscape of US-China trade relations is continuously evolving, influenced by a blend of economic ambitions and geopolitical strategies. For a deeper understanding, exploring references from experts such as Elizabeth Ingleson and Brad Setser on the podcast can provide valuable insights.
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