Explainer | US-China relations: is there still a trade war under Joe Biden’s presidency?

Former US president Donald Trump instigated the trade war with China in July 2018, and their phase-one trade deal was eventually signed in January 2020

Joe Biden took over the presidency at the start of 2021, saying his administration would review the trade war and other actions taken against China

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Then-US president Donald Trump and Chinese Vice-Premier Liu He signed the phase-one trade deal in January 2020. Photo: Xinhua

Published: 7:30pm, 23 May 2021Updated: 5:59pm, 6 Oct 2021

How did the trade war start?

During his 2016 presidential campaign, Donald Trump promised to reduce the trade deficit with China. He claimed it was based in large part on unfair Chinese trading practices, including intellectual property theft, forced technology transfers, a lack of market access for American companies in China, and an uneven playing field caused by Beijing’s subsidies for favoured Chinese companies.

China, meanwhile, believed that the United States was trying to restrict its rise as a global economic power.

The US and China are the two largest economies in the world, and Chinese foreign trade grew rapidly after its ascension to the World Trade Organization in 2001, with bilateral trade between the US and China totalling almost US$559 billion in 2019.

However, that trade was lopsided, with the US running a large and growing trade deficit with China. This became a major political issue during the 2016 US presidential campaign. The US trade shortfall rose to US$375.6 billion in 2017 before the start of the trade war, up from US$103.1 billion in 2002. The deficit rose further to US$378 billion in 2018.

When did the US-China trade war start?

The US-China trade war started on July 6, 2018, when the US imposed a 25 per cent tariff on US$34 billion worth of Chinese imports, marking the first in a series of tariffs imposed during 2018 and 2019.

It continued to escalate, with the US and China imposing various import tariffs on each other’s products until an agreement in principle on a phase-one trade deal was reached in mid-December 2019.

At its peak at the end of 2019, the US had imposed tariffs on more than US$360 billion worth of Chinese goods, while China had retaliated with import duties of its own worth around US$110 billion on US products.