USTR’s Greer: Keeping the Strait of Hormuz open is crucial for China
United States Trade Representative (USTR), Jamieson Greer, said that managing and controlling economic relationship with China are the key to meeting US domestic objectives, Reuters reported on Friday. Greer added that keeping the Strait of Hormuz open is crucial for China.
Key quotes
China is meeting its commitments on soybean buying.
We are attempting to handle disputes on rare earths rather than intensify them.
Significant shipments of Chinese yttrium have arrived in U.S. over recent weeks.
China understands there will be some U.S. tariffs on Chinese products.
Unable to pledge specific tariff rate on Chinese products.
We want to prioritize items for buying from and selling to China.
Acquisitions will be a sovereign choice for China.
China could view U.S. lead in AI chips as risk to local manufacturing.
Chip export controls not discussed at meeting.
U.S. export restrictions on chips were not a key focus of talks.
Chinese rules on supply chain moving out of China a significant worry.
Taiwan issue unlikely to impact board of trade talks.
Managing and controlling economic ties with China key to meeting US domestic objectives.
Keeping the Strait of Hormuz open is crucial for China.
On Chinese involvement with Iran, our view is that China is acting very pragmatically.
Market reaction
As of writing, the AUD/USD pair is down 0.12% on the day at 0.7212.
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
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