The Institute for Peace & Diplomacy (IPD) has launched a timely series in June 2021 to examine the current landscape of U.S. Past actions from China have incurred costs on U.S. companies, such as its ban on chips from U.S. chip-maker Micron which could cut off as much as 10 percent of Micron’s total revenue. Further, just this past month U.S. chip giant Intel called off a planned acquisition of Israeli semiconductor-maker Tower Semiconductor due to significant delays in China’s review of the merger. Even so, there are reasons to believe that the U.S.-China economic relationship that has been built on innovation, manufacturing, and trade will continue to deteriorate. There are indications that China views this new ‘de-risking’ strategy with skepticism, with some Chinese state-run papers asserting that de-risking conceals the same level of hostility as decoupling, just under a different name. China may believe that Biden’s moves are part of a larger goal to reduce economic ties between the two nations despite the change in nomenclature.
The Customs Tariff Commission of the State Council has announced it will extend the tariff exemption on a batch of goods that were due to expire on February 16. The tariffs on 124 goods, which were imposed as a countermeasure to the US Section 301 tariffs on Chinese goods, will continue to be suspended until September 15, 2023. If the trip goes ahead, the meeting will be the highest-level diplomatic meeting between the two sides since the so-called “balloon incident” which led to the cancellation of a planned trip by the US Secretary of State Antony Blinken. It could therefore be an opportunity to improve the deteriorating US-China relations by providing a platform on which to advance collaboration, according to analysts. The US Special Presidential Envoy for Climate John Kerry has told Reuters that he has been invited to visit China in the “near term” for talks on the climate crisis. Wang Wentao was also supposed to meet with US Trade Secretary Katherine Tsai at the APEC forum trade minister meetings in Detroit, however, no information has been released about the possible meeting thus far.
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US Secretary of the Treasury Janet Yellen announced two new initiatives following meetings with Chinese Vice Premier He Lifeng in Guangzhou on April 5 and 6. China’s Ministry of Commerce (MOFCOM) announced temporary anti-dumping measures on propionic acid (PA) imports from the US, effective April 20, 2024. US companies importing PA will be required to provide tariff deposits at a rate of 43.5 percent to China Customs. Meanwhile, according to the readout from the Chinese Ministry of Foreign Affairs, Wang once again reiterated that Taiwan is a “red line” issue for China and that the US should continue to abide by the one-China principle and the three joint China-US communiqués.
The U.S.-China Trade Relationship
- The George W. Bush administration, responding to calls from U.S. companies for better protections, imposed some tariffs on a range of Chinese goods that were subsidized or “dumped” (i.e., sold at an abnormally low price).
- On November 22, 2024, the Department of Homeland Security (DHS) announced the addition of 29 China-based companies to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List, increasing the total number of entities on the list to 107.
- In a regular press conference on April 19, Chinese Foreign Ministry Spokesperson Lin Jian stated that Biden’s comments on Chinese steel dumping in the US are “far-fetched” and that “they hurt China-US trade ties”.
- The US and China saw their rivalry reach new heights in 2021 as both countries embarked on trade, defense and diplomatic policies marked by increased suspicion and antagonism.
- With this action, the Commerce Department will have approximately 600 Chinese entities on the Entity List – more than 110 of which have been added since the start of the Biden Administration.
The meeting was brokered by US national security adviser Jake Sullivan and China’s top foreign policy official Yang Jiechi, who reached an agreement after six hours’ meeting in Zurich. This came after Biden and Xi spoke by phone on September 9, 2021, only their second since Biden took office, seven months later after their first call. Updates to the State Department’s fact sheet on Taiwan, released on May 5, 2022, committed key language on the US’ official stance on Taiwan, including that the US “acknowledges the Chinese position that there is but one China and Taiwan is a part of China” and that it “does not support Taiwan independence”.
Chinese General Liu Zhenli has held a video call with US General CQ Brown, the first senior military communication between Washington and Beijing since they were suspended in August 2022. The US Trade Representative (USTR) has extended the exclusions from China Section 301 tariffs, initially set to expire on December 31, 2023, to May 31, 2024. According to the USTR, this extension allows for a systematic review of the exclusions, taking into account statutory factors and objectives. The USTR has also opened a docket for public comments on existing exclusions starting from January 22, 2024. The Chinese also stated that the US “needs to take seriously China’s concerns and do more things that contribute to the growth of the military-to-military relationship.” The Chinese side also emphasized its position on Taiwan and its interests in the South China Sea. The talks follow the resumption of bilateral military talks in December 2023, after such talks were suspended for over a year.
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The White House readout states that the meeting “was part of the effort to maintain open lines of communication and responsibly manage competition in the relationship” following the Xi-Biden talks in San Francisco in November. Meanwhile, the readout from the Chinese Ministry of Foreign Affairs called the talks “candid, substantive and productive”. The Bureau of Industry and Security (BIS) under the US Department of Commerce has issued a new rule adding 37 entities to its so-called “Entity List”, which subjects companies to export controls and additional licensing requirements.
America’s Military Runs on Chinese Rare Earths
China’s veteran climate envoy Xie Zhenhua has met with US climate envoy John Kerry in California to promote bilateral cooperation on climate change ahead of the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28), which will convene at the end of November in Dubai. The progress in improving US-China dialogue on climate change signals that the two countries have found common ground for cooperation and is a significant reversal of previous trends. US-China talks on climate change were suspended in August 2022, following Nancy Pelosi’s controversial visit to Taipei. During this meeting, He reportedly stated that “China is willing … to promote the development of bilateral relations in a healthy, stable and sustainable direction”, based on the progress made on bilateral ties during the meeting between President Biden and President Xi in San Francisco in November.
Is there a trade war between the United States and China?
Previously, Washington decided to classify Chinese state media organizations, including Xinhua News Agency and the China Global Television Network (CGTN), as “foreign missions”, allowing tighter control to be exercised over five Chinese outlets. Washington also slashed the number of Chinese nationals allowed to work at the US offices of major Chinese state-owned media and limited their authorized stay to 90 days, with an option to extend. In total, 27 entities and individuals located in China, Pakistan, Russia, Japan, and Singapore were added to the Entity List on November 24. The law allows the SEC to ban a foreign company from trading and delist the company from an exchange if the US Public Company Accounting Oversight Board (PCAOB) is not able to audit its requested reports for three consecutive years. According to the SEC chair Gary Gensler, more than 50 foreign jurisdictions have worked with the PCAOB to allow inspections, and China and Hong Kong are the only two jurisdictions that refuse to allow the inspections.
The companies that were added to the list include Baoding Giant Import and Export Co., Ltd., BGI Research, BGI Tech Solutions, Rayscience Optoelectronics Innovation Co, and the IT giant Inspur Group. The addition of Inspur to the list is particularly significant as it works closely with large US firms, such as Intel and IBM. However, she also highlighted that this type of competition is only sustainable if it is “fair to both sides”, and alleged that China is engaging in unfair competition, including setting up “barriers to market access for American firms” in China. In addition to Kerry’s potential visit, Secretary of State Antony Blinken recently told the media that he may try to visit China sometime in 2023, following the cancellation of his previously planned visit in February. Secretary Antony Blinken has hinted that the trip may be rescheduled for sometime later this year, while US Climate Envoy John Kerry recently told media he had been invited to China to meet his Chinese counterpart, which may take place in the “near term”. Despite the signing of the Montana bill, critics have stated that the ban will be difficult to enforce.
According to the White House readout, the discussion sought to advance on progress made in the previous meeting, in particular in areas such as “counternarcotics cooperation, ongoing military-to-military communication, talks to address AI-related risks, and continuing efforts on climate change and people-to-people exchanges”. At the time, the Biden Administration suggested that the US may lift some tariffs on Chinese goods to fight inflation. The fact that it has now instead chosen to increase tariffs reflects how the trade relationship between China and the US has evolved in the last two years despite improvements in diplomatic dialogue, as well as the increasingly elevated position of renewables and high-end technologies as a consideration in national security. The Chinese Ministry of Foreign Affairs readout noted that the meeting occurred at Blinken’s request and that both sides agreed to maintain communication and further implement the understandings reached by Presidents Joe Biden and Xi Jinping at the San Francisco meeting in November 2023.
At the same time, Middle Eastern diaspora communities have become financially successful and can help promote trade between North America and the region. In this respect, the diaspora can become vital intermediaries for advancing U.S. and Canada’s business interests abroad. Promoting business diplomacy can both benefit the MENA region and be an effective and positive way to advance engagement and achieve foreign policy goals of the North Atlantic. Analysis of U.S.-China conflict has often focused on China’s growing economic strength and the United States’ role as the keystone of the global order.
On the afternoon of November 14, 2022, US President Joe Biden and Chinese President Xi Jinping held their first face-to-face meeting since Biden took office in early 2021. The three-hour meeting held in the run-up to the G20 Summit in Bali, Indonesia was described by both sides as “in-depth, candid and constructive”, according to the official meeting readout on China’s Ministry of Foreign Affairs (MOFA) website. The United States Trade Commission (USTR) announced it has extended a tariff exemption on 352 Chinese products.
American companies earn hundreds of billions of dollars annually from sales in China—money they can then invest in their U.S. operations. Chinese companies have invested tens of billions of dollars in the United States, though this investment has dwindled in recent years amid heightened U.S. government scrutiny. The US Secretary of State Antony Blinken spoke with China’s top foreign policy official, Yang Jiechi, in their first high-level conversation since President Joe Biden took office.
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- They may also serve to protect Chinese companies from US sanctions for supplying technologies and materials with potential military use to Russia.
- Past actions from China have incurred costs on U.S. companies, such as its ban on chips from U.S. chip-maker Micron which could cut off as much as 10 percent of Micron’s total revenue.
- China Telecom America is a subsidiary of China Telecom, the largest Chinese state-owned telecommunications company.
- However, it may limit investment in China’s private sector, which could undermine recent efforts by the Chinese government to boost private sector investment.
These meetings resulted in the establishment of the Economic and Financial Working Groups in September, which convened “for the first time in recent weeks and had their second meetings yesterday” (November 9), according to Yellen. A joint statement released by the Chinese Ministry of Ecology and Environment (MEE) and the US Department of State, respectively, outlines 25 points of agreement on jointly tackling the climate crisis. These include joint commitments to implement the Paris Agreement, triple renewable energy capacity globally by 2030, implement respective national methane action plans, implement technologies and measures to control greenhouse gas (GHG) emissions and air pollutants, and support climate cooperation between states, provinces, and cities in each country. Meanwhile, the US Department of Defense reported that the talks addressed global and regional security issues, with General Brown highlighting the importance of responsible competition management and open communication to avoid misunderstandings. US officials expressed concerns about China’s lack of communication, citing provocative behavior and a rise in risky intercepts of US aircraft by China.
Both sides agreed to maintain high-level exchanges and communications on important issues “at all levels in the economic field”, which was a major outcome of the meeting between President Biden and President Xi in Bali in November 2022. The US Treasury Secretary Janet Yellen has visited Beijing, the latest of a series of high-level visits by US officials to Beijing. During her four-day visit, Yellen met several top Chinese officials, including Premier Li Qiang, Vice Premier He Lifeng, Minister of Finance Liu Kun, and the Deputy Governor of the People’s Bank of China Pan Gongsheng. Meanwhile, Kerry stated that the US “is willing to strengthen cooperation with cheap crypto investments China to jointly address urgent global challenges such as climate change”. The Premier also highlighted the need for developed countries to do more to support developing countries in the fight against climate change, stating that “Developed countries should take the lead in reducing emissions and fulfill their financial commitments as soon as possible and provide more technical support to developing countries”. According to the readout posted on the Ministry of Foreign Affairs (MFA) website, the two recalled the secret visit that Kissinger made to China 52 years ago – which paved the way for the historic meeting between Chairman Mao Zedong and President Richard Nixon – and the subsequent development of US-China ties.
The House of Representatives passed a final iteration of the text, which reconciled key differences between House and Senate. The new version keeps provision creating a “rebuttable presumption” – assuming all goods sourced wholly or in part from Xinjiang are tainted with forced labor, unless “clear and convincing evidence” can be provided otherwise. The US House of Representatives has passed the Uyghur Forced Labor Prevention Act to ban all imports from China’s Xinjiang region over concerns about alleged forced labor. SenseTime later announced that it would delay its Hong Kong IPO, where it had planned to raise up to US$767 million. In a brief statement, the company argued that the accusations were “unfounded” and reflected a “fundamental perception” of the company.