US-China Trade Relations

By | June 3, 2016
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Recent events have caused US-China trade to be at somewhat of a standoff over the past recent weeks. At the top of the bill has been the recent devaluation of the Chinese Yuan (Renminbi), coupled with trade disputes in several different markets. This year has notably a very large potential for these types of problems to arise, enflamed by the US election cycle as well as China’s market situation. With the realities of 2016, this type of tiff has the potential to grow as the two countries’differences in domestic politics meet the fact that the country already has had very weak growth.

 
Over the past month, the US has accused China of overtaxing and and unfairly blocking U.S. poultry imports. The U.S. Trade Representative’s office filed a complaint with the World Trade Organization earlier this week. The U.S. disputes that China has failed to comply to earlier rulings by the trade body over the removal of tariffs on U.S. chicken.

 
Last month, Tata Steel, an Indian owned steel manufacturing company decided to partially shut down its operation in the U.K. due to current market conditions. Tata Steel cannot keep up with its Chinese competitors who are currently thriving in the international market. Tata steel says that market conditions in the U.K. and virtually all of Europe have been deteriorating over the past few months. This “deterioration” is from an oversupply of steel and high manufacturing costs. The reality is that China produces half of the world’s steel, more than the US, EU, Russia, and Japan combined, causing market conditions where competition is not viable.

 
Since January, the U.S. election cycle has been in full-swing, proving to be one of the most controversial cycles to date. Since then, U.S. media has been seeing heightened anti-China rhetoric; with potential leaders calling for China to open up its markets and allow for more international investment. Also, the U.S. has recently called to cut off North Korea from the banking system, then directly called on China to help reign in their aggressive ally.

 
Market realities have proven to be a main driver in trade between China and the West. Although tensions are high this year, no one knows what the next will bring. In any case, if you are doing business in China, it’s important now more than ever to make sure your partners are operating legitimately and with proper paperwork. Visit CNBizCheck or send us an email at info@cnbizcheck.com to get started!

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