China’s integration into the global economy triggered a new set of political realities, which are at the root of today’s global trade tensions. Two decades on, China has grown by all economic measures, but many of the US and other advanced economies remain frustrated with the country's limited market liberalisation.
Ever since July 2018, the two countries have been involved in several negotiations and imposing tariffs, consequently leading to the start of the US-China trade tensions.
By the end of December 2019, the US imposed tariffs on more than $360 billion of Chinese goods. China retaliated with tariffs on more than $110 billion of US products.
Phase one trade deal was signed. China pledged to boost US imports by $200 billion above 2017 levels and strengthen intellectual property rules while the US agreed to halve some of the new tariffs it had imposed on China.
By mid-2020, China had only met 28% of its commitments. There are also many more substantive issues – such as state-owned enterprises – which have not been addressed yet.
There are three possible scenarios for the future, the most likely being that global trade tensions get worse before they get better.
Businesses have been moving some of their production out of China to Mexico as well as other low-cost labour centres in Asia.