A timeline of US trade relations with China
The history of trade with China is almost as old as the United States itself; today, the U.S. and China boast the world's #1 and #2 largest economies, respectively. Trade between the two countries has been massive, yet often contentious. During the more than 230 years of trade between the dominant powers in the East and West, China and the United States have witnessed a string of ups and downs, standoffs and reconciliations, and trade wars and physical wars. Here, Stacker takes a look at this history—with particular focus on the years since President Donald Trump took office—using a variety of historical and recent news sources.
Since the turn of the 21st century, the relationship has been particularly strained. Even before Trump’s inauguration, he was stoking the flames on the campaign trail, using language of “rape” and theft” in regards to Chinese trade practices. After months of back-and-forth negotiations and retaliatory tariffs, the trade war began in earnest on July 6, 2018. An endless stream of trade talks bouncing between Beijing and Washington D.C. reached a critical juncture in June 2019, when the sides agreed to a truce prior to the G20 summit. Yet just days after, the U.S. Treasury had officially designated China a “currency manipulator.”
When the two signed Phase 1 of their modern trade deal in Jan. 2020, the global COVID-19 pandemic had begun its spread. The agreement went into effect in February, and as of May, both countries have committed to implementing the first phase and creating measures to support their economies. COVID-19 has also invariably affected June’s G7 summit of global economic leaders—potentially the best upcoming opportunity for diplomatic progress—as its fate, whether virtual or in-person, is up in the air (but tentatively set for late June).
With a presidential election looming in November, and the final effects of a pandemic not yet fully understood, U.S.-China trade relations are entering new territory. As global law firm Mayer Brown points out: “COVID-19 is placing new pressures on business and the markets. No one, including the White House, saw this coming. … Regardless of who is ahead in the polls or who wins the election, trade officials in Beijing and Washington will presumably try to minimize any disruptions or shocks during the remainder of 2020.”
Here's a look at how the two global giants got to where they are today.
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1784: Empress of China voyage
Following the famous Boston Tea Party rebellion of 1773, Americans abandoned tea en masse as an unpatriotic beverage. The masses, however, still craved the caffeinated, rejuvenating drink through the Revolution and beyond. Once it was free from Great Britain and the king's monopolistic British East India Company, the newly-minted United States set its sights east, toward China. On Feb. 22, 1784, the U.S. declared its economic independence when the American trade ship Empress of China set sail from New York City. Packed with 242 casks of Appalachian and New England ginseng, which the Chinese coveted, the ship was to return filled with tea. The era of American trade with China had begun.
1844: Treaty of Wanghia
The United States soon learned that its appetite for silk, ornate furniture, tea, and other Chinese goods far outpaced China's interest in importing American merchandise. The British had, however, discovered one product the Chinese did want from the West: smuggled opium. The Chinese government tried in vain to suppress the British and American opium trade, and in 1840, China suffered a series of devastating defeats in what came to be known as the First Opium War. In 1842, Britain forced lopsided terms of surrender that heavily favored the West, known as the Treaty of Nanjing. Two years later in 1844, America secured similarly-favorable trading terms with the Treaty of Wanghia.
1940: Military and financial aid
In 1940, the United States was not yet at war with Japan, and was overwhelmingly pro-China, which Japan had invaded and occupied. That year, President Roosevelt approved military aid to China's nationalist government, implemented a blockade of Japan, and ramped up pro-China propaganda at home. Although military aid isn't the same as trade, the move codified America's support for China as a critical economic partner.
1949: Red China
In 1949, communist Chinese forces led by Mao Zedong defeated the U.S.-backed Chinese nationalist government, which fled to Taiwan. The People's Republic of China was then established. For the next two decades, trade between the United States and communist China was frozen, diplomatic relations ceased, and virtually all travel was halted. Soldiers from the two nations clashed in the Korean War, which began the following year. America would recognize the nationalists exiled in Taiwan as the legitimate Chinese government through the 1970s.
1971: Kissinger's secret trip
Throughout the 1968 election campaign, Richard Nixon signaled both to China and America that he was willing to help thaw the two countries' chilly relations. In 1971, two events changed history: China invited America's ping-pong team to compete on their turf, and President Nixon's Secretary of State, Henry Kissinger, secretly visited China to discuss resuming trade.
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1972: Nixon visits China
Nixon shocked America and the world in 1972 by announcing plans for a historic trip to China while still mired in the unpopular Vietnam War. A bona fide cold warrior, Nixon's ulterior motive for the trip was to cause friction between the U.S.S.R. and China. The end result, however, was the same: The stage was set for a future of normalized relations, restored diplomacy, and trade.
1979: Trade partners again
In 1979, China and the United States formally resumed diplomatic relations, with each nation offering major conciliations to the other. The United States agreed to recognize the country's government, and both established most-preferred nation status in terms of trade.
1980s: Sunny skies
Throughout much of the 1980s, trade relations were cozy between the United States and China. During President Ronald Reagan's visit, both sides reduced tariffs, eliminated penalties, and enacted reforms. By 1988, Chinese exports to the U.S. totaled $40 billion.
1989: Tiananmen Square
In June 1989, Chinese government troops brutally crushed a pro-democracy student rally in Beijing's Tiananmen Square, leaving hundreds of peaceful protestors dead while the world watched on television. The massacre prompted the United States to impose broad sanctions and suspend military sales to China. Beijing responded by freezing all U.S relations.
2000: Relations normalized again
After a contentious decade following Tiananmen Square, President Bill Clinton signed the United States-China Relations Act in 2000, granting permanent normal trade relations with China and removing the previous stipulation that required annual reviews of the country's trade status. The act also helped China enter the World Trade Organization.
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