US and China Ties | OP-ED | Security Lense | 30-July-2025
After World War II, especially following the collapse of the Soviet Union, the US emerged as a global leader, becoming the sole hegemon. The US promoted ideas such as free trade, open investment, and limited government control over the market. It also became an important part of Global organizations like the IMF and WTO.
For long US was only the Global leader and no one was even close in competition with it. But recently China could be seen as a rising power contesting the US in world leadership and this competition can impact the future of the world economy and balance of power.
US-China diplomatic relations began in 1979; formally both states recognized each other’s government and opened embassies. But there were always tensions between them due to some main reasons like:
- Human rights in China – The U.S. often criticize China for not respecting people’s rights and freedoms.
- Taiwan: China considers Taiwan as part of its country but formally does not recognise it as China’s part and the US has secretly supported Taiwan by providing weapons for self-defence.
These issues have affected the relations between the US and China into hostility.
Recently the major issue that has worsened the situation is The trade war between the US and China. To calm the situation down China has started to call its “rising power” a “peaceful rise” to grow its economy without any hindrance, but in reality, China is growing very fast. In 1990 China’s economy ranked 11th in the world but by 2010 it had become the 2nd biggest economy in the world.
A few other events made things worse:
- In 1999 US-led NATO bombed the Chinese embassy in Yugoslavia.
- Difference in the opinion regarding the 9/11 attack.
Based on the 2018 USTR report, initiated through Section 301 investigation, the US officially began this trade war on March 23, 2018, When the US president signed an order called “Presidential Memorandum Targeting China’s Economic Aggression” which was later to be known as the US-China trade war. This investigation found that China’s practices regarding technological transfer, intellectual property, and innovation were harmful and oppressive. Key Findings of the 2018 USTR Report:
- Forced Technology Transfer: Forces U.S. companies to transfer technology as a condition of doing business in China.
- Intellectual Property Theft: China’s use of cyber intrusions to steal trade secrets and other valuable business information from U.S. companies.
- Discrimination in Technology Licensing: China unfairly limited U.S. companies’ ability to negotiate and set terms for technology licensing and other technology-related transactions.
- Targeted Investment and Acquisitions: The report said that China was trying to invest in and buy US companies in order to get access to its technology.
- Cyber Espionage: cyber intrusions to gain unauthorized access to commercially valuable business information.
These findings led to the imposition of several tariffs by the US against which China also took tough steps by imposing tariffs back.
On 6th June 2018 the US imposed a 25% tariff on $34 billion worth of Chinese goods. In reply Chinese did the same; it added a 25% tax on 545 American products. For the next few months, both states kept on adding tariffs and taxes on each other, affecting not only the trade between the US and China but also Global trade.
To Chill out the situation, in January 2020 the two countries signed an agreement “Phase One Agreement”. In this pact, China promised that in 2 years, it will buy $200 billion more American goods and services, compared to what it bought in 2017. However, due to the COVID-19 pandemic and other issues, the US was unable to complete what it promised, it only bought 62% of it by August 2021, instead, the US trade deficit grew from $344 billion in 2019 to $355 billion in 2021.
Between January and July 2021:
- Chinese exports to the U.S. went up by 36.9%
- U.S. exports to China went up by 50.4%
Although the Phase One agreement was built to solve the trade-related issues it did not work as hoped, again the US was the one who was paying most of the extra taxes and tariffs, costing businesses to pay more for the products from China and these heavy costs were transferred onto the consumers making things expensive for them.
In 2021 when President Joe Biden came back to office, he did not remove the tariffs that President Trump had imposed on Chinese goods but brought a few changes including:
- Removing tariffs on certain products to help businesses in the US.
- Working to keep global trade stable.
- Making America more competitive with China.
- These changes show that President Biden focused more on protecting American jobs and supporting US factories.
However as President Trump came back to power again in 2025, the trade war between US and China reignited. On the 1st of February 2025, the US added 10% more tariffs on Chinese goods then on March 3rd, the US further added 20% of the tariff, pointing out that China was unable to tackle illegal drugs and the execution of 20% tariffs took place on 4 March. More recently a drastic announcement was made by Trump on the 4th of June 2025, citing US would double existing tariffs on steel and aluminum from 25% to 50%. This will be very damaging and harmful for both the US and China and the consumers.
These protectionist measures by the U.S. and China have yielded issues in the global economy. In response to these issues, many countries have started trading with their neighbours instead of relying on world powers, the US and China. One example of this is the Regional Comprehensive Economic Partnership (RCEP), which was signed in 2020 by 15 countries in the Asia Pacific region including China, Japan, South Korea and members of ASEAN.
Similarly, other strategic alliances have emerged:
- QUAD: A security forum comprising the U.S., Japan, Australia, and India aimed at balancing China’s influence.
- AUKUS: A defence pact between Australia, the United Kingdom, and the United States focusing on military technology sharing.
- Shanghai Cooperation Organization (SCO): Led by China, this organization promotes security, economic cooperation, and development with Central Asian nations.
The Global economy has been extremely affected by The U.S.-China trade war. According to the World Bank(2018), this trade war can drop Global exports by 3% and Global income by 1.7%($1.4 trillion). It also added that China’s economy will fall by 3.5% and America’s by 1.6%. This is because of the higher tariffs and broken supply chains, the entire world economy will slow down which is harmful for the entire world.
A report by the Brookings Institution(2019), sharing the opinion of 15 Nobel Prize-Winning economists, warned that this trade war can be extremely risky and harmful similar to the great depression in the 1930s. The report says:
- About 2.1 million American jobs could be at risk if China took tough steps in reply.
- A trade war can cause 134000 American jobs to be lost (risk).
- China would buy fewer American crops which would downsize American farmer’s earnings by 6.7%.
To restore the ongoing conflicts between the US and China, some measures are necessary to be taken:
- The US and China should talk and resolve issues peacefully.
- The US should support a Free Market(not block trade) by avoiding protectionist policies.
- The US should accept that China is rising and instead should focus on resolving issues within its states.
- China should respect US concerns like IP theft, forced technology transfer etc, and act legally and wisely.
- China should remain peaceful and keep good relations with all countries including the US and try not to fall into Thucydides’ trap.
This US-China trade war is not just a bilateral issue instead it is affecting the whole world. If both countries are unable to reach a mutual understanding then there is a chance of a new Cold War, destabilizing the global economy. Both countries need to talk to restore peace and focus on fair trade. Cooperation between both countries can stabilise in global economy and ensure peace.
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