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The US and China have been locked in a trade rivalry for some time now. However, the confrontation has intensified to include technology. The technology trade between the countries has been a source of friction. Both countries are the key players in the technology realm, with China being the largest exporter of technology products, including smartphones, laptops, and other electronic gadgets. On the other hand, the US has been the leader in the innovation sector, producing cutting-edge technologies.
Why the United States and China are in a mess
The US trade war with China began in March 2018. President Trump imposed tariffs on steel and aluminum, citing national security concerns, and levied charges on $50 billion worth of Chinese goods. China, in response, imposed tariffs on US products worth the same amount. This initiated a tit-for-tat exchange between the countries. The trade war escalated in 2019. The United States imposed further tariffs on Chinese goods, expanding the range to cover electronics and textiles. China responded with tariffs on US goods like food and textiles. In January 2020, a truce was called between the two countries, following an agreement to sign up for a ‘phase-one’ trade deal. However, this agreement soon came to an end, with the COVID-19 pandemic adversely affecting the global economy.
Impact of the dispute on technology and trade
The ongoing standoff between the countries has far-reaching implications, with technology being the major victim. The friction has prompted the US to consider banning Chinese technology products including Huawei and TikTok from entering the country, accusing China of spying on US citizens. In response, China has waged a campaign to promote their technology products in Europe, Africa, and other parts of the world.The United States sees China’s technology dominance as a risk to national security. The US has also taken regulatory action against Chinese technology companies like Huawei and Xiaomi, citing potential security threats. The regulations have led to a decline in the demand for Chinese electronics. More so, China has been forced to reduce imports from the United States, affecting several industries.
The way forward
The US-China trade war has been ongoing for a while, affecting the global economy, with technology being the key victim. The US has accused China of intellectual theft, patent breaches, and national security concerns. China, on the other hand, has positioned itself as a creator and exporter of innovative technology. A solution to the crisis is yet to emerge, with the possibility of things getting worse. One thing is clear from this ongoing conflict, it will impact global trade and the technological frontier of both nations. Time will tell who will emerge as the ultimate winner.
