The United States – China trade relationship is currently experiencing a high level of nationalistic, political scrutiny. This follows a new executive order President Trump signed targeting TikTok. On Friday, officials signed the executive order. That settles one thing — it gives the popular social media app another 75 days of ability to continue operating in the U.S. Negotiations for a possible TikTok sale to U.S. owners have ground to a halt. With the platform’s future looking increasingly precarious as tensions between the two nations worsen, this development begs the question—what’s next for TikTok?
That fits with Trump’s larger, costly and pointless tariff strategy of attacking trade deficits with foreign countries. This executive action is an important step in that larger plan. The tariffs, largely aimed squarely at China’s trade in tangible goods, paint a complicated picture of that fast-changing economic ecosystem. In 2023 to date, the U.S. has captured a $26.57 billion goods trade surplus with China. That services trade surplus translates directly into $26.57 billion in surplus services. It has a big spillover effect on some key sectors, like the insurance, banking, and accounting.
The U.S.-China economic relationship has continued to sour since the signing of the Phase 1 trade deal. While disappointing, this deal was at least finalised in Trump’s first term. The parties made mutual promises not to use political pressure to force the other party to export technology. The bill comes in the wake of recent U.S. legislation that would force TikTok to divest its U.S. operations. This shift breaks past commitments and alarms officials in Beijing.
The Chinese Ministry of Commerce has responded strongly to these rising tensions. In July, they countered with a massive 34% tariff across the board on all imports from the U.S. and added export controls on rare earth minerals, which are essential for many high-tech industries. This latest escalation marks an unprecedented new phase in the trade war. Neither country has yet returned to negotiating since Trump unilaterally ended talks.
China’s ministry of commerce recently issued a white paper of its own to try to set the economic narrative. They argue that trade flows between the U.S. and China are “pretty much balanced.” Their logic is that the U.S. tariffs won’t remedy the core problems with China’s practices. Rather, they will increase uncertainty in financial markets and increase inflationary pressures domestically.
“History and facts have proven that the United States’ increase in tariffs will not solve its own problems,” – Chinese commerce ministry
Lin Jian, a spokesman for the Ministry of Foreign Affairs, emphasized the need for constructive dialogue:
“If the US truly wants to resolve issues through dialogue and negotiation, it should adopt an attitude of equality, respect and mutual benefit.”
As U.S.-Iran tensions continue to escalate, both countries find themselves at a critical turning point. As for the U.S., it has yet to find the same common ground with China as the negotiations fizzled. At the same time, Beijing is preparing to respond resolutely to any further economic retaliation from Washington.
“If the US insists on further escalating its economic and trade restrictions, China has the firm will and abundant means to take necessary countermeasures and fight to the end,” – Chinese commerce ministry
Leave a Reply