The Causes, Current Status, and China’s Response Strategies to the US-China Trade Friction—An Analysis of Tariffs, Industrial Chains, and Institutional Competition for the Period 2018-2026

Abstract

After the start of the U.S. Following China’s Section 301 investigation in China and the additional tariffs by the United States in 2018, the economic and trade disputes between China and the United States have expanded from a goods deficit to include technological blockades, investment restrictions and contests over global rules, becoming one of the main forces reshaping the economic and trade system of the world. As the economic size gap between the two countries has narrowed, the geopolitical environment has changed, global industrial chains have been reorganized, and the economic and trade confrontation between China and the US has shown traits of being long-term and increasingly complex. According to the official data from 2018 to 2026, this paper will examine the reasons for friction in the four main areas: economic structure, major-power strategy, institutional differences and competition in value chains, as well as current changes in bilateral trade, tariff policies and industrial relocation. Some deficiencies in China’s foreign trade have been pointed out by the paper, such as market concentration, dependence on core technologies, weak influence over global rules and pressure on the industrial chain. Based on this study, the Sino-U.S. friction is a long-term problem caused by different stages of development and shifts in the global order of interests, and short-term tariff adjustments will not resolve this issue. Therefore, China should coordinate the work of these four areas—market diversification, independent scientific and technological innovation, institutional openness and industrial chain security—to reduce external risks and promote high-quality, sustainable development of foreign trade.