Trade Wars: Editors' Overview

Published date01 January 2020
AuthorTakatoshi Ito,Kazumasa Iwata,Shujiro Urata,Colin McKenzie
DOIhttp://doi.org/10.1111/aepr.12292
Date01 January 2020
Trade Wars: EditorsOverview
Takatoshi ITO,
1
Kazumasa IWATA,
2
Colin MCKENZIE
3
and Shujiro URATA
4
1
Columbia University,
2
Japan Center for Economic Research,
3
Keio University and
4
Waseda University and the
Japan Center for Economic Research
JEL codes: D72, F1, F3, F13, F14, F17, F21, F51, F68, N7, Z13
Accepted: 8 October 2019
1. Trade Wars
As of September 1, 2019, the USA has imposed in four stages additional tariffs on
$240 billion of imports from China, and announced additional tariffs on $300 billion
of imports that will be imposed in the near future.
1
In response, China has retaliated
by imposing or announcing the imposition of additional tariffs on just about all goods
imported from the USA. These additional tariffs and retaliatory tariffs have not been
announced/implemented all at once, but rather in tranches. Table 1 details the major
events between March 2018 and September 2019 in this trade war between China and
the United States. Relatively early on, the media has labeled this series of actions by
both sides as a trade war.Just as a war involves inicting damage on the other side,
atrade warinvolves inicting economic damage on the other side through trade
measures that are country-specic such as the imposition of additional tariffs on a
country, the suspension of imports/exports of particular types of goods from/to a
country, and/or the imposition of additional reporting/inspection requirements for
exports or imports to/from a country.
2
The breadth of the products, and the size of the
additional tariffs involved certainly justify calling this dispute between China and the
USA a trade war.This trade war between China and the USA has continued on for
longer and become far more serious than probably most analysts expected. The war
has also generated casualties at home in the USA as Apple with 44.9% of all its sup-
pliers reported to be located in China in 2015, has been hit hard by the additional tar-
iffs.
3
The measures taken to date by China and the USA have not been limited to
additional tariffs as trade in particular goods and by particular rms have also been
blocked. For example, on August 5, 2019, China ordered state-owned enterprises
(SOE) to stop buying US agricultural products. From May 2019, the USA has limited
Huawei and its afliates access to the US market This is viewed by some as an attempt
to decouple Huawei (and possibly China) from the global value network associated
with producing goods for the US military (see Segal (2019) for a discussion of issues
related to Huawei.).
Correspondence: Colin McKenzie, Faculty of Economics, Keio University, 2-15-45 Mita, Tokyo
108-8345, Japan. Email: mckenzie@z8.keio.jp
© 2020 Japan Center for Economic Research 1
doi: 10.1111/aepr.12292 Asian Economic Policy Review (2020) 15, 130
Table 1 Timeline for the trade war between the USA and China (as of September 6, 2019)
March 22, 2018 Pursuant to section 301 of the Trade Act of 1974, President Trump issues a
Memorandum to the United States Trade Representative (USTR) directing (a) the USTR to
take appropriate action under section 301 to address the acts, policies, and practices of China
that are unreasonable or discriminatory and that burden or restrict U.S. commerce; (b) the
USTR to pursue dispute settlement in the WTO to address Chinas discriminatory licensing
practices; and (c) the Secretary of the Treasury to propose executive action to address
concerns about investment in the United States directed or facilitated by China in industries
or technologies deemed important to the United States.
March 23, 2018 WTO receives a request (DS542) from the USA for consultations with China
regarding certain measures concerning the protection of intellectual property rights.
April 3, 2018 Pursuant to section 301 and the 22 March Memorandum from the President, the
USTR proposes that an additional duty of 25% be imposed on a list of products of Chinese
origin with a total value estimated to be about $US50 billion. The products listed include
aircraft parts, batteries, at-panel televisions, medical devices, and satellites. The
Chinese Customs Tariff Commission of the State Council decides to impose additional tariffs
of 15% (including fruit, nuts, and steel piping) or 25% (including aluminum, airplanes, cars,
pork, and soybeans) on 128 items of products imported from the USA since April 2, 2018.
April 4, 2018 WTO receives a request from China for consultations with the USA regarding
tariff measures on certain goods from China (DS543). Trump tweets that We are not in a
trade war with China, that war was lost many years ago by the foolish, or incompetent, people
who represented the U.S.
April 6, 2018 USTR announces a list of goods imported from China that will be subject to an
additional tariff of 25%. The value of the list is estimated to be $50 billion. This list later
becomes USLists 1 and 2.
May 19, 2018 Joint statement by China and the United States states that to substantially reduce
the United States trade decit in goods with ChinaChina will signicantly increase
purchases of United States goods and services.
June 20, 2018 USTR announces a list of goods (US’“List 1, total value $34 billion) that will be
subject to additional tariffs of 25% effective on July 6, 2018. USTR announces a list of goods
(US’“List 2, total value $16 billion) that will be subject to additional tariffs of 25%.
July 1, 2018 China announces additional tariffs of 25% will be imposed on Chinas List 1 goods.
July 6, 2018 Additional tariffs of 25% come into effect for US List 1 goods (value $34 billion).
August 3, 2018 China announces that additional tariffs ranging from 5% to 25% will be
imposed on Chinas List 2 goods (value $16 billion).
August 7, 2018 China announces additional tariffs of 25% will be imposed on Chinas List
2 goods effective August 23, 2018.
August 14, 2018 WTO receives a request from China for consultations with the USA regarding
safeguard measures on imports of silicon photovoltaic products (DS562) and measures related
to renewable energy (DS563).
August 16, 2018 USTR announces a list of goods (List 2,total value $16 billion) that will be
subject to additional tariffs of 25% effective on 23 August 2018.
August 23, 2018 Additional tariffs of 25% on US List 2 goods become effective. WTO receives a
request (DS565) from China for consultations with the USA regarding tariff measures on
certain goods from China.
Trade Wars: EditorsOverview Takatoshi Ito et al.
2© 2020 Japan Center for Economic Research

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