Introduction
US – China relations over time have declined due to several factors such as ideological differences, geopolitical tensions as well as economic competition.[i] The economic and geopolitical rift between the two nations have been due to circumstances of trade wars, conflicts over the South China Sea and Taiwan and technological competition.[ii] The United States sees the China’s Belt and Road Initiative as a potential threat to its global influence as well.[iii] The decline of the economic interdependence between China and US is an increasing matter of concern.
Trade Wars and Tariffs
The trade war started in the year 2018 between United states and China which resulted in a storm of tariff announcements from both sides.[iv] These trade tariffs made international trade and interconnectedness more difficult for citizens of both the countries. The continuous back and forth application of these trade tariffs on hundreds of billions of dollars’ worth of goods resulted in the disruption of global supply chain and caused inflation which results in lower purchasing power to the currency of that nation.[v] Despite trade deals such as the Phase one, the tensions still continue between the two states.
The Tech war
The tech war that is going on between the United States and China is a major source of tension. The United States has taken initiatives to weaken Chinas tech giants such as “Huawei” and “TikTok” bringing up issues with intellectual property theft and national security. [vi]China responded with tariff cuts but didn’t resolve the conflict and his conflict has significant implications that extend far beyond the tech industry.[vii] It is important to understand the motives behind each country’s actions and the potential consequences and impacts for the global economy.
Semiconductors and AI: The two superpowers are competing for supremacy in critical technologies such as semiconductors, artificial intelligence (AI), and 5G.[viii] This action highlights the US’s imposing of restrictions on advanced technology exports to China, intending to hinder the latter’s speed of technological revolution in return. They are two of the world’s biggest economies, both affected by the new tariffs from China and the US.[ix] In addition, the modification of export tenability to China set by the US to slow down.[x]
South China Sea and Taiwan
Over the South China Sea, both the US and China have clashing interests. This area is a vital transit route for maritime crafts and a place with considerable oil and gas deposits at the bottom of the sea. [xi]The US has made it a habit to undertake what it calls freedom of navigation operation which is a way of challenging China’s territorial claims.[xii] Another major problem is the status of Taiwan. The US takes Taiwan side by supporting its self-defensive capabilities and offers Taiwan with an increased volume of weapon exports, as for China, Taiwan is depicted as a splinter province, and near the island, it has increased its military activities.[xiii]
Conclusion:
The US-China relationship is geopolitically complex. The trade and tech wars between these countries, in which every country competes directly for superiority in vital fields like artificial intelligence and semiconductors, are the primary causes of tensions in the economic sphere. Geopolitical disagreements rise over the south China sea and Taiwan with the US challenging Chinas territorial claims and supporting Taiwan’s self-defense.
Despite the tense dynamics, there is still some collaboration remaining. Both parties acknowledge that joint initiatives are necessary to address global issues such as climate change.
[i] CFR.org Editors. “U.S.-China Relations.” Council on Foreign Relations, April, 2017. Accessed on May 26, 2024. https://www.cfr.org/timeline/us-china-relations.
[ii] Council on Foreign Relations. “Findings | China’s Belt and Road: Implications for the United States.” Council on Foreign Relations, March, 2021. Accessed on May 26, 2024. https://www.cfr.org/task-force-report/chinas-belt-and-road-implications-for-the-united-states/findings
[iii] ibid
[iv] Bown and Wang. “Five years into the trade war, China continues its slow decoupling from US exports.” Peterson Institute for International Economics, March, 2023. Accessed on May 27, 2024. https://www.piie.com/blogs/realtime-economics/five-years-trade-war-china-continues-its-slow-decoupling-us-exports
[v] ibid
[vi] Bradford, Anu. The Battle for Technological Supremacy: The Global Battle to Regulate Technology. New York: Oxford Academic, 2023. Pages 183–220, accessed 27 May, 2024.
https://doi.org/10.1093/oso/9780197649268.003.0006
[vii] ibid
[viii] ibid
[ix] Cerutti, Gopinath and Mohommad. “The impact of US-China Trade Tensions.” IMF Blog, May, 2019. Accessed on May 27, 2024. https://www.imf.org/en/Blogs/Articles/2019/05/23/blog-the-impact-of-us-china-trade-tensions.
[x] ibid
[xi] Shoal, Thomas. “South China Sea Dispute | China and Philippines | Nine Dash Line.” CivilsDaily, March, 2024. Accessed on May 27,2024. https://www.civilsdaily.com/story/contention-and-claims-to-south-china-sea/.
[xii] ibid
[xiii] Maizland, Lindsay “Why China-Taiwan Relations Are so Tense.” Council on Foreign Relations, February, 2024. Accessed on May 27, 2024. https://www.cfr.org/backgrounder/china-taiwan-relations-tension-us-policy-biden.
By: SAI KIRAN V, RESEARCH INTERN CS3, USI