The United States has been interested in economic relations with China since 1784, shortly after the American War for Independence.
At first, this interest was purely economic, because the British refused to deal with the U.S. (for obvious reasons). So the Americans bought Chinese goods, and the Chinese bought from the Americans.
And for most of U.S. history, things were good. But in 1949, with the rise of Mao and communist China, tensions rose.
Fast-forward to today’s relationship, as described by The Heritage Foundation:
Today, the United States and the People’s Republic of China are like the European great powers of a century ago. They trade with each other, but do not trust each other. They have the largest economies in the world, and they have a financial and trading relationship that shapes the global economy. But at the same time, they have different, and often opposing, views on many national security and foreign policy issues.
This lack of trust in their trading relationship mainly stems from China’s views on communism, their endorsement of certain people, and security issues.
Now it looks like that trading relationship is heating up dramatically…
China recently announced tariffs on 106 U.S. products like soy, cars, and some chemicals. As Sam Meredith explains on CNBC.com, this came 24 hours after the U.S. slapped tariffs on a list of Chinese imports in a $50 billion crackdown on unfair trade practices:
The effective start date for the new charges is not announced, though China’s Ministry of Commerce says the tariffs are designed to target up to $50 billion of U.S. products annually. The 25 percent levy on U.S. imports includes products such as soybeans, cars and whiskey.
This announcement caused a 450-point drop in the Dow Jones.
In retaliation, the Trump Administration then doubled down on its initial tariffs, imposing another $100 billion in tariffs on Chinese goods.
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