Since the beginning of the agreement, China has never been on track to meet its obligations to purchase goods, but several factors have played a role. Implementation of the agreement in the first year has been affected by the devastating economic impact of the COVID-19 pandemic, with China`s economic growth of only 2.3%. (The pre-pandemic forecast was 5.8 percent.) Global trade suffered in 2020, falling 12% from 2019. China`s trade performed better than most, with total imports only 1 percent lower than in 2019. But by mid-December 2020, China had bought only 59 percent of the U.S. goods it had committed to buy in the first full year of the deal (see Figure 1). The Chinese government has denied that the forcible transfer of intellectual property is a mandatory practice and has acknowledged the impact of domestic research and development conducted in China. [61] Former U.S. Treasury Secretary Larry Summers said China`s leadership in some areas of technology was the result of “huge government investments in basic research” rather than the “theft” of U.S. assets.
[62] In March 2019, the National People`s Congress approved a new foreign investment law, which is due to enter into force in 2020 and explicitly prohibits the forcible transfer of intellectual property to foreign companies and provides stronger protections for foreign intellectual property and trade secrets. China had also planned to lift restrictions on foreign investment in the auto industry in 2022. AmCham China Political Committee Chairman Lester Ross criticized the bill, saying the bill was “rushed” and “broad” and also criticized part of the bill that gave the country the power to retaliate against countries that impose restrictions on Chinese companies. [63] [64] [65] Globally, foreign direct investment has slowed. [243] The trade war has hurt the European economy, particularly Germany, although trade relations between Germany and China and between Germany and the United States remain good. [244] The Canadian economy is also having a negative impact. [245] Like the United States, the United Kingdom, Germany, Japan and South Korea all posted “low production” in 2019. [246] Several Asian governments have introduced stimulus measures to repair the damage caused by the trade war, although economists have said they may not be effective. [247] In December 2019, the South China Morning Post reported that due to the trade war and the Chinese government`s crackdown on shadow banking, Chinese manufacturing investment grew at the lowest pace on record. [228] Exports from the U.S. aerospace sector since January 2020 represent only 19% of the proportionate sales expected under the phase one commitments. The Boeing 737 MAX crashes in late 2018 and 2019 didn`t help.
The model was grounded around the world, Boeing stopped production for nearly five months, and like many buyers, China canceled its orders. Yet in September 2021, Biden`s Commerce Secretary Gina Raimondo blamed the government in part for the failure to pick up sales, saying, “There are tens of billions of dollars of planes that Chinese airlines want to buy, but the Chinese government is standing in the way.” So far, U.S. exports in the first phase are $20 billion behind the pace of 2017 and $37 billion behind the estimated target. However, aircraft are the only part of the legal text of the agreement that allows for credit for “orders and deliveries” (emphasis added) – opening up the possibility for China to compensate for this shortcoming by placing orders for future deliveries before the end of December 2021. On August 14, 2019, the Dow Jones fell 800 points, in part due to rising trade tensions between the United States. and China. [236] Nine days later, on the 23rd. In August, the Dow fell 623 points on the day Trump unofficially ordered U.S. companies to immediately seek alternatives to doing business in China. [237] [238] At the end of 2019, stock markets hit record highs after rising due to the U.S.-China agreement to sign the first phase of a trade deal.
[239] [240] In January 2020, President Donald Trump signed the Phase One Agreement between the United States and China. The deal required China to buy an additional $200 billion in U.S. goods and services — compared to 2017 — with prescribed amounts spread between 2020 and 2021. The agreement follows two years of trade war and tariff escalation between the two countries in 2018 and 2019. A 2019 statement from the National Manufacturers Association explained its opposition to the trade war and called for a new structure for U.S.-China trade relations that would eliminate China`s unfair trade practices and level the playing field for U.S. manufacturers. [312] A 2018 Politico article documented the close partnership between Non-Aligned Movement Chairman Jay Timmons and President Trump, claiming that Timmons was fighting Trump`s trade war from within. [313] The Agriculture chapter addresses structural barriers to trade and will support a dramatic expansion of U.S. food, agriculture, and seafood exports, increasing U.S. farm and fisheries incomes, creating stronger rural economic activity, and boosting job growth. Various non-tariff barriers to U.S. agricultural and seafood trade are addressed, including meat, poultry, seafood, rice, dairy, infant formula, horticultural products, food and food additives, pet food, and biotech products.
Some countries have benefited economically from the trade war, at least in some sectors, as exports to the United States and China have increased to fill the gaps created by the decline in trade between these two economies. .
