Trade War between USA & China

Introduction:-

1. Trade War between USA & China
2. In a preliminary step, U.S. President Donald Trump signed an executive memorandum on Monday asking U.S. Trade
3. Representative (USTR) Robert Lighthizer to determine whether an investigation into China’s trade practices and policies was warranted.

What is the U.S. objecting to?

1. The U.S. has taken issue with Chinese laws that require American and other foreign companies directly investing in China to set up joint ventures with Chinese partners, or in some cases, transfer technological and intellectual property (IP) assets.

What are trade ties between the countries like?

1. China is the U.S.’s largest goods trading partner.
2. The U.S. goods trade deficit with China was $347 billion in 2016 but it had a $37 billion services trade surplus with China in the same year.
3. Travel, transport and intellectual property (including software) constitute the main services the U.S. sells to China according to U.S. government data.

How will the situation develop?

1. China has said if that it “will not sit by and watch” if the U.S. acts against it in a manner that violates existing international trade agreements.
2. If Mr. Trump’s order results in retaliatory measures, then it is possible that a trade war could ensue between the two countries.
3. However, it is not a given that such retaliation will occur.
4. First, the U.S could work through the WTO’s dispute resolution process rather than its domestic trade laws.
5. Second, in the past, disputes have been resolved once an investigation has been undertaken by the U.S. but before they have concluded.
6. Mr. Trump has said that China cooperating with the U.S. on the North Korean missile build-up will soften his view on Chinese trade practices; given
7. Now as such it is signal by trump to china.

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