Hi Good Morning

In today's edition we bring about an issue that is not only dominating the international politics scene but can also prove to be a major threat for all us civilians around the world. And no I'm not talking about the Russia Ukraine War.

Estimated reading time : 5 mins

Riddle Me this

I have five stars on my flag but I’m not Honduras

I’m one of the largest countries in the world but I’m not the USA

I have cuisine which is very popular but I’m not Italy

I’m in Asia but I’m not India

Who am I?

If you solve this riddle congratulations you did pay attention in those boring Geography classes or just a smart lad like myself😁

What is a Trade deficit?

Simply put a Trade deficit means that a country is buying more goods than the services it's selling. Like any shopkeeper who is stocking more supplies than the amount of goods he is selling running into a net loss trade deficit is harmful for nations as well.

The love hate relationship

Today we are going to talk about arguably the most powerful nation in the world and it's biggest threat, the kind of love hate relationship these nations have. 

Yes you guessed it right we take a look at the US China Trade war that has been going on since 2018.

The roots 

It's no doubt that the US has always taken moves to not only increase its influence in the global scene but also make itself more sustainable and self-sufficient. Since the 1980s when Donald Trump was just a businessman he has been vocal about imposing tariffs or taxes that would eliminate the trade deficit in the US.

In 1970s after the economic reforms in China the volume of traded goods between US and China increased drastically. This also supported China's entry in the World Trade Organisation (WTO) in 2001.

The trade deficit between the two nations grew to almost $375.6 billion in 2017. In his 2016 presidential campaign Donald Trump promised to reduce the Bilateral trade deficit that existed between US and China probably something that he has been planning since the 1980s. Maybe the guy is a visionary afterall! 😳

The Timeline

To give you more context we now put a timeline to what are the events that have supposedly fueled the trade war between the US and China.

2018

• US-China trade war begins as US imposes 25 per cent tariffs on US$34 billion worth of Chinese imports.

• China retaliates by imposing 25 per cent tariffs on 545 goods originating from the US worth US$34 billion

• Xi Jinping and US counterpart Donald Trump call a truce in the trade war at the G20 summit in Argentina

2019

The tariff is at 10%

• After trade negotiations break down, US increases tariffs on US$200 billion worth of Chinese goods, from 10 to 25 per cent

• US Department of Commerce announces the addition of Huawei to its “entity list” (It's just a list on the trade restrictions published by the United States Department of Commerce's Bureau of Industry and Security)

• Xi Jinping and Donald Trump again agree to a trade war truce, this time at the G20 summit in Japan

• US designates China as a “currency manipulator”

2020

• China and the US sign the phase-one trade deal

• US customs agency issues “withhold release orders” banning cotton, apparel, hair products and computer parts from four Xinjiang companies

• US president-elect Joe Biden tells The New York Times he will not make any “immediate moves” to lift trade war tariffs

• US extends ban that prohibits American investments in Chinese companies that have alleged ties with the Chinese military

With all this back and forth going on between the two nations its very difficult to keep a track of what's happening and who is asking money from whom. But if you are still curious about the entire timeline of events check out the following link 👇🏻

USA’s hard hit on China’s chip industry

Since you have been reading this far you would be aware of the relations between the US and China. In a move that came to a shock for many the USA with just 1 announcement has crippled the Chinese semiconductor industry.

The United States has imposed export controls to restrict China's ability to make high-end semiconductors. Simply put the US does not want China to make any chips using their equipment or executives. 

Even the executives working in the Chinese chip companies were told that they were at a risk of losing their citizenship causing mass panic leading to all the executives resigning.

Boom right!

But what are these chips?

Why did US take this move right now?

and What is the ultimate plan?

Find out all about it in Scrollify originals

I made it too obvious but the answer for the riddle is China 😁

See you soon!

Ohh and also Happy Diwali💥