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The 2018 US-China trade conflict after forty years of special protection

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  • Chad P. Bown

Abstract

In 2018, the United States suddenly increased tariffs on nearly 50 percent of its imports from China. China immediately responded with tariff retaliation covering more than 70 percent of imports from the United States. This article assesses what happened in 2018 and attempts to explain why. It first constructs new measure of special tariff protection to put the sheer scope and coverage of the 2018 actions into historical context. It then uses the lens provided by the 2018 special tariffs to explain the key sources of economic and policy friction between the two countries. This includes whether China’s state-owned enterprises (SOEs) and industrial subsidies, as well as China’s development strategy and system of forcibly acquiring foreign technology, were imposing increasingly large costs on trading partners. Finally, it also examines whether the US strategy to provoke a crisis – which may result in a severely weakened World Trade Organization (WTO) – was deliberate and out of frustration with the institution itself.

Suggested Citation

  • Chad P. Bown, 2019. "The 2018 US-China trade conflict after forty years of special protection," China Economic Journal, Taylor & Francis Journals, vol. 12(2), pages 109-136, May.
    • Handle: RePEc:taf:rcejxx:v:12:y:2019:i:2:p:109-136
    DOI: 10.1080/17538963.2019.1608047
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    Cited by:

    1. Ridley, William & Devadoss, Stephen, 2024. "Determinants of Policy Responses in the US–China Tit-for-Tat Trade War," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 0(Preprint), January.
    2. Huthaifa Sameeh Alqaralleh, 2023. "The extreme spillover from climate policy uncertainty to the Chinese sector stock market: wavelet time-varying approach," Letters in Spatial and Resource Sciences, Springer, vol. 16(1), pages 1-17, December.

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