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The U.S. and China Trade War Heats Up – What It Means for Blockchain




Even before U.S. President Donald Trump took office in January of 2017 there were talks about what his relationship with China would be like. Only a year later the president was trading barbs with China’s leader Xi Jinping regarding aluminum imports. The trade war between the two countries began and continues its seemingly inevitable descent into a dangerous economic game that borders on farce. You will find here a brief overview of the current state of affairs and what got us there.

The Covid-19 pandemic has added additional stress to a fraught relationship, and China, which is eager to displace the United States dollar’s hegemony as the world’s reserve currency sees an opportunity to either insert the Yuan into the conversation or suggest blockchain-based currencies, into the conversation.

The Chinese government approved six public blockchains access to its Blockchain Services Network and the Supreme Court recommended for stronger definitions of private citizens’ digital currency property rights.


The beginning of the conflict can be traced to provocations by the Trump administration during 2018 that ultimately sowed the seeds of discord. While initially a lukewarm battle, the tariffs implemented have increased gradually, and China has fired back in more than one occasion. Tracing the conflict to the source reveals that it began with the subtle moves made in 2018.

Global Safeguard Tariffs

When President Trump implemented “global safeguard tariffs” back in 2018, mainly on washing machines and solar panels, it sparked the political firestorm that was to come. These tariffs affected trade worth in the billions ($8.5 billion in solar panels alone). China was profoundly influenced, as were other countries, and as a large producer they took the blunt force of the fallout. While the response was not immediate, there was a feeling of tension in the air.

Of Aluminum and Wine

In March of 2018, the aggression continued with hefty tariffs on aluminum goods (a product China exports in large scale). The 25% tariffs were viewed as greatly off-center by the international community and had repercussions on prices at home. China was quick to fire back as only a couple of months later; they implemented their tariffs (25%) on more than 128 products, including wine and fruit. The back and forth was on, and government officials were expecting the worst.

Looking for Solutions

The United States and China met in Beijing in May of 2018 to discuss solutions to the trade war, these talks to reduce the trade gap by $200 billion in the next two years proved to be futile, and the fighting continued. After a brief truce, the conflict continued through the summer, culminating in the first China-specific tariffs in July ($34 billion value). China fires back in August of 2018 while another attempt at talks proves unsuccessful in September.

An End-Of-Year Truce

As the year closed out and after three rounds of tariffs, the United States and China agree to yet another temporary truce. By this point, both countries are feeling the effects of the conflict and once again begin looking for solutions. Throughout most of early 2019, there are several talks in both D.C. and Beijing, as the countries attempt to resolve the conflict; the tariffs are suspended on China’s side.

China Caves?

As of April 2019, China has truly felt the impact of tariffs; its trade industry affected from various angles. Since late 2018 China has suspended additional tariffs on U.S. automobiles and parts and has begun purchasing soybeans once again from America. High-level talks are held in Beijing but once again fail to reach an agreement and are the cause for the storm ahead.

The Storm Today

Shortly after the failed talks, President Trump hikes the 10% tariffs of the third round to 25%, and China responds in kind, further crippling hundreds of industries who lobby for an end to the conflict. The tech sector is hurting badly according to Bloomberg. In May of 2019, the United States ban China Corporation Huawei from purchasing from U.S. companies and China returns the favor by making their list of blacklisted companies.

The Future of the Conflict

As the G20 summit approaches, Trump and Xi have promised to rekindle talks, yet the situation looks bleak with so many failed discussions already. Hundreds of industries are suffering, and consumers are feeling it in their pockets. If the war does not cease soon, it could spell disaster for many well-known companies.

“In the midst of an unprecedented global health crisis, a trade war would be a serious error for both countries,” notes Todd William, founder and CEO of Reputation Rhino, an online reputation management company in New York City which works closely with companies from the United States and China on a variety of online marketing initiatives.

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