In 2016 alone, the Chinese have imported $14 billion worth of soybeans from the United States, reports CNN Money in a recent article. Soybeans are just one example of the need for agricultural products in the Middle Kingdom. The large Chinese population of about 1.4 billion needs immense quantities of food.
Yet agricultural trade could be affected in negative ways. Last month, the Trump administration put tariffs on imported Chinese solar panels. Now, the White House is considering tariffs on imports of Chinese aluminum and steel. In response, the Chinese Commerce Ministry indicated that if this “affects China’s interests, we will take necessary measures to defend our rights.”
China is already investigating whether the Unites States is dumping sorghum, an agricultural product. When it comes to cultivation of sorghum, the American farmers are world leaders with 2016 production of 480 bushels.
Would the Chinese authorities give up on imports of American agricultural products when it comes to feeding the world’s largest population? This isn’t that likely. Still, it worries farmers, many of whom voted for Donald Trump.
Despite tough rhetoric, “nobody wants a trade war,” as William Zarit, chairman of the Chinese branch of the American Chamber of Commerce, has said.
What is likely is that the world’s two economies will both cooperate and trade with each other in the foreseeable future.
The White House, as well as previous administrations, have long been accusing China of unfair trade practices. And, to large degree, they were right. After steel and aluminum tariffs, there’s another issue: the trade secrets. Trump’s administration, CNN Money reports, has began an investigation about intellectual property theft by China.
There’s no doubt that copyrights are violated in China. American movies, academic textbooks, and music are widely copied. But now, the issue is even bigger. It comes to alleged high-tech theft. It’s not that American-made high-tech hasn’t been stolen before, but that it is being brought up with more stress now.
According to a report by Commission on the Theft of American Intellectual Property, America loses as much as $600 million a year because of intellectual property theft. Meanwhile, Chinese government wants the Middle Kingdom to transition from being a low cost manufacturer to high-tech innovative economy. For example, China is now working on developing electric cars and 5G mobile networks.
To becomes a high-tech economy, China needs a lot of know-how, so no wonder it is looking for it rather aggressively. Some foreign companies claim that they were forced to transfer their technologies in order to be able to operate in China.
The Trump administration can either complain with the World Trade Organization (WTO) or take a unilateral action. This can possibly lead to a trade war.