Chinese trade policies and Donald Trump’s concerns

During President Donald Trump campaigns for the US elections, he frequently attacked China, accusing it of ‘raping’ US with unfair trade policy. In January, he threatened to impose a whopping 45 percent tax on Chinese imports.

While campaigning in Indiana, Trump said China was responsible for “the greatest theft in the history of the world”, further accusing China of manipulating its currency at the expense of global interest especially in its exports policies.

In April, Chinese President Xi Jinping met with Trump at Mar-a-Lago, to discuss these issues and hopefully put an end to the matter. They also were set to discuss North Korea, and this was seen as a positive step for both parties to resolve the issues once and for all, unfortunately there were no consensus at that meeting.

What then is Trump saying?

He says, China creates huge trade imbalance amounting up to 300 billion dollars for the U.S., by keeping its currency critically low, so as to boost its exports to the U.S., and that this is affecting US firms selling its products to China.

Outsourcing of US jobs to companies and workers in China is another of Trump’s worries.

He regards this as a fine way of taking away American jobs away to China

Another is the currency manipulations claims by Trump. He accuses the Chinese government of manipulating the Chinese foreign exchange market monetarily to favour itself, and that the Chinese yuan was significantly undervalued to keep its exports cheap.

What Trump has done so far?

Trump has signed two executive orders targeting the US trade deficit especially with China. The first aimed to understudy the root cause of the deficit by examining unpaid duties and foreign trade abuses. The other initiates a comprehensive review of the American trade deficit, its rules and conditions affecting the US workers.

Trump has also threatened legal steps against China, threatening to trigger section 301 of the 1974 Trade Act, especially with the aspects Chinese infringements upon U.S.

intellectual property rights. However, that’s very unlikely to occur as the U.S. needs China to address North Korea’s increasing threats.

China is a key North Korean ally and conduct high level bilateral trade with Pyongyang. Figures from the China’s Ministry of Commerce shows that trade with North Korea was about 38% in the first quarter of 2017.

Diplomatic solution to the problem of seen as the best solution by both parties especially has the U.S.– China relations is key to keeping stability in the Asian region.