Trump baby

(Ross Sneddon, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Joe Myers, Writer, Formative Content

The ongoing US-China trade dispute has put into sharp focus one of the world’s most consequential trade relationships – and the impact any disruption can have on the global economy.

The relationship itself is, of course, nothing new. But, as this chart from Statista shows, the two economies’ interdependence has grown exponentially over the past 30 years, with China becoming the US’s largest trading partner. At the start of this decade, China surpassed Japan to become the world’s second largest economy, behind the US.

Image: Statista

Trade off

US Census Bureau data shows trade with China was worth $660 billion in 2018 – nearly 16% of total US trade.


Compare this to 15 years ago, when trade with China was worth around a third of what it is today, at just over $230 billion. At that time, China came behind Canada and Mexico on the list of the US’s top trading partners.

Fast-forward to 2018, and the US’s nearest neighbours are now in 2nd and 3rd place, respectively.

What is the US-China trade war?

US President Donald Trump has complained about China’s trade practices for some time – even before he took office at the start of 2017. He says the US trade deficit with China – around $420 billion last year, as the chart above shows – is damaging US manufacturing prowess and jobs.

Donald J. Trump


From Bush 1 to present, our Country has lost more than 55,000 factories, 6,000,000 manufacturing jobs and accumulated Trade Deficits of more than 12 Trillion Dollars. Last year we had a Trade Deficit of almost 800 Billion Dollars. Bad Policies & Leadership. Must WIN again!

Last year, the US imposed tariffs on Chinese goods, prompting China to retaliate with tariffs of its own.

In December, both sides had agreed to pause new tariffs to allow for talks on a potential trade deal. But as negotiations hit a snag, earlier this month the US raised tariffs on billions of dollars of Chinese goods once again. China responded in kind.

The impact on both economies is complicated. Some groups say they’ve benefited – US garlic farmers, for example. But other industries have expressed concerns, with 173 companies signing a letter to President Trump asking him to end the trade war.

Regardless, the ripple effects are being felt across the globe. The Bank of Japan issued a warning about the impact on its own economy just last week, while the International Monetary Fund has also warned of the risks the trade war poses to the global economy.