Title: U.S.-CHINA TRADE DISPUTE: Understanding the Conflict - Livingston International
Headings: U.S.-CHINA TRADE DISPUTE
UNDERSTANDING THE CONFLICT

U.S.-CHINA TRADE DISPUTE UNDERSTANDING THE CONFLICT
What are the Most Recent Developments?
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Why is this Happening?
Response to Proposed Tariffs
Economic Impact
Supporting our customers’ needs

Content: The current U.S. administration has made trade policy a key tenet of its foreign policy objectives. President Trump has a strong focus on trade relations and believes strongly that the U.S. must work to create more balanced trade relationships so that bilateral trade between the U.S. and a trading partner does not result in excessive trade surpluses or deficits on either side. The United States’ largest bilateral trade deficit, by far, is with China. In 2017, the U.S. maintained a trade deficit with China of $375 billion, which is three times larger than the deficit it held when China entered the World Trade Organization in 2002. As such, China and its trade practices have been a focal point for the USTR and Department of Commerce. Since China’s inclusion into the WTO in 2001, U.S. firms across many industries, but particularly the technology sector, have complained that China was circumventing rules set out by the WTO and illegally misappropriating the intellectual property of U.S. firms for its own gain. These activities are often considered part of the “Made in China 2025” policy of the Chinese government, which sets out a road map to move Chinese manufacturing higher up on the value chain and to do so while being less dependent on high-value imports. In October 2018, the Department of Commerce held a public hearing to solicit additional information from legal, industry and academic representatives. Feedback at the hearing, combined with information obtained by the Section 301 committee, resulted in a determination that practices carried out by Chinese authorities were unreasonable and/or discriminatory and causing undue harm to U.S. commerce and estimated the associated value to be $50 billion annually. Subsequent to this determination, the USTR published a list of approximately 1,300 products codes associated with Chinese imports that would be subject to tariffs of 25% to offset the loss of economic activity suffered by the U.S. due to China’s unjust trade practices.