The US-China trade war has been underway for over a year now and tensions are escalating. The dispute worsened recently after President Trump announced an additional $300 billion tariff on goods imported from China. This announcement was met with retaliation from China as the Yuan reached a record low of 7.10 per U.S. dollar. US officials accused the People’s Bank of China (PBOC) of currency manipulation, and President Trump called out the Chinese government for deliberately depreciating the Yuan. The recent trade war retaliations have taken a major hit on US stocks, as Monday marked the worst trading day of 2019.
Let’s analyze the five most prominent moments that contributed to the intensifying US-China trade war.
June 15, 2018: The First China-specific Tariff
This tariff announcement was the unofficial beginning of this ongoing trade war, as it marked the first exclusive tariff put in place on Chinese imports. The tariff declared that US Customs and Border Protections would be collecting a 25% tariff on $34 billion worth of imported goods from China. These tariffs were implemented on July 6, 2018, and included iron/steel products, railway products, electrical machinery, and more.
June 16, 2018: China Matches the First US Tariffs
China wasted no time retaliating with a revised tariff list of 545 products valued at $34 billion, also being taxed at 25%. These tariffs were also enforced on July 6, 2018, and consisted of aquatic products, automobiles, and agricultural products.
August 14, 2018: China Files WTO Allegations
Just under a year ago the Chinse Ministry of Commerce lodged a formal case with the WTO in response to the recent August 2018 US tariffs on solar panels. China vouched that the latest tariffs had irrefutably damaged their trade interests and economic accessibility.
September 24, 2018: US and China Levy 3rd Set of Tariffs
A prominent escalation of the trade was the third set of exclusive tariffs between the US and China. In response to unfair trade practices, the US hit China with a 10% tax on $200 billion worth of goods, which included a variety of food products. China hit back with a 10% tax on $60 billion worth of goods. China also released a government White Paper to detail their stance on trade relations with the US. The document accused the US of bully-like trade practices and putting the global economy at grave risk.
May 10, 2019: Trump Imposes Heavy Tariffs After Months of Promising Negotiations
2019 was off to a promising start with a series of trade talk meetings and stock market rallies in both the US and China. The week following trade talks in Beijing, Trump raised the tax level from 10% to 25% on the list 3 goods. This backlash was incited after Trump declared China was reverting on commitments from current trade talks and attempting to renegotiate their side of the deal.
May 13, 2019: China Hits Back with More Tariffs
China’s swift response transferred the trade war back into full-swing. They imposed a new tariff on $60 billion worth of imported US goods including beef, vegetables, coffee, furniture, and more.
August 1, 2019: Trump Doubles Down on New Wave of Tariffs
After trade talks in Shanghai led to little progress, Trump hit China with a massive new tariff. This one, set to be enforced September 2019, will levy a 10% tax on the remaining $300 billion worth of Chinese imports taken in, which consisted mostly of electronic goods and clothing. This announcement spurred a red week in the US market due to the frustrating state of rising trade war tension despite many meetings between US and Chinese leaders.