Introduction

The ongoing trade war between the United States and China has been a dominant theme in global economic news for several years. The conflict, which began during the Trump administration, has seen both countries impose tariffs and other trade restrictions on each other's goods and services. In response to the United States' aggressive trade policies, China has been borrowing from the US playbook, adopting similar strategies to hit back at its rival. This article will explore China's approach to the trade war, examining how it has borrowed from US tactics and what this means for the future of global trade.

China's Response to US Trade Policies

China has long criticized the United States for its extraterritorial jurisdiction, where the US extends its arm too far outside of its borders to make demands on non-American companies. However, in recent years, China has begun to adopt similar tactics, using its own laws and regulations to exert influence over companies operating within its borders. For example, China has introduced new laws that allow it to retaliate against companies that comply with US sanctions, demonstrating its willingness to use its legal system to defend its interests.

One notable example of China's response to US trade policies is its use of export controls. In 2020, China introduced new export control laws that allow it to restrict the export of certain goods and technologies to specific countries or companies. This move was seen as a direct response to the US's use of export controls to restrict the sale of certain technologies to Chinese companies, such as Huawei. By introducing its own export control laws, China is able to level the playing field and protect its own companies from US sanctions.

According to a report by the Peterson Institute for International Economics, China's use of export controls has significant implications for global trade. The report notes that China's export control laws could be used to restrict the export of rare earth minerals, which are critical components in the production of many high-tech goods. This could have a major impact on companies that rely on these minerals, such as those in the technology and automotive sectors.

The Impact of China's Trade Policies on Global Trade

China's adoption of US-style trade policies has significant implications for global trade. By using export controls and other trade restrictions, China is able to exert influence over companies operating within its borders and protect its own interests. However, this approach also has the potential to disrupt global supply chains and create uncertainty for companies that operate in multiple countries.

For example, a study by the McKinsey Global Institute found that the trade war between the US and China has already had a significant impact on global trade. The study notes that the trade war has resulted in a decline in trade between the two countries, with US exports to China falling by 11% in 2020 compared to the previous year. This decline in trade has had a ripple effect on global supply chains, with companies in other countries also feeling the impact of the trade war.

In addition to the impact on global trade, China's adoption of US-style trade policies also has implications for the future of global governance. The use of export controls and other trade restrictions by both the US and China has the potential to create a fragmented global economy, where countries use their laws and regulations to protect their own interests at the expense of others. This could undermine the rules-based international trading system, which has been in place since the end of World War II.

The Future of US-China Trade Relations

The trade war between the US and China is likely to continue for the foreseeable future, with both countries using a range of tactics to protect their interests. However, there are also opportunities for the two countries to work together to resolve their differences and promote a more stable and predictable global trading system.

One potential area of cooperation is in the development of new trade rules and regulations. The US and China could work together to establish common standards for the use of export controls and other trade restrictions, which would help to promote a more level playing field for companies operating in multiple countries.

According to a report by the Center for Strategic and International Studies, the US and China could also cooperate on issues such as intellectual property protection and trade facilitation. The report notes that both countries have a shared interest in promoting the free flow of goods and services across borders, and that cooperation on these issues could help to build trust and promote a more stable global trading system.

In conclusion, China's decision to borrow from the US playbook in the trade war has significant implications for global trade. By using export controls and other trade restrictions, China is able to exert influence over companies operating within its borders and protect its own interests. However, this approach also has the potential to disrupt global supply chains and create uncertainty for companies that operate in multiple countries. As the trade war between the US and China continues, it is likely that both countries will use a range of tactics to protect their interests. However, there are also opportunities for cooperation and collaboration, which could help to promote a more stable and predictable global trading system.

Conclusion

In conclusion, the trade war between the US and China has been a dominant theme in global economic news for several years. China's decision to borrow from the US playbook and use similar tactics to hit back at its rival has significant implications for global trade. While the use of export controls and other trade restrictions has the potential to disrupt global supply chains and create uncertainty for companies, it also highlights the need for cooperation and collaboration between countries to promote a more stable and predictable global trading system.

As the global economy continues to evolve, it is likely that the US and China will remain major players in the global trading system. However, the way in which they interact with each other and with other countries will be critical in determining the future of global trade. By working together to establish common standards and promote cooperation, the US and China can help to build a more stable and predictable global trading system, which will benefit companies and countries around the world.

According to a report by the World Trade Organization, the global trading system is at a critical juncture, with the COVID-19 pandemic and the trade war between the US and China having a significant impact on global trade. The report notes that the global trading system is facing significant challenges, including the rise of protectionism and the decline of international cooperation. However, the report also highlights the opportunities for countries to work together to promote a more stable and predictable global trading system, which will be critical in promoting economic growth and development in the years to come.

In the end, the future of US-China trade relations will depend on the ability of both countries to work together to resolve their differences and promote a more stable and predictable global trading system. While there are significant challenges ahead, there are also opportunities for cooperation and collaboration, which could help to build a more stable and prosperous global economy for all.