However, the world’s No. 1 economy also implemented one of the largest subsidy programs ever. Specifically, the Science and CHIPS Act will provide approximately $50 billion in subsidies to promote domestic semiconductor production. Meanwhile, the Inflation Reduction Act provides $370 billion to support the domestic green energy industry.
In response, China filed a petition with the World Trade Organization, suing America’s “discriminatory” subsidies for new energy vehicles in the Inflation Reduction Act.
Beijing also strongly opposes subsidies in the Science Act and CHIPS. Not stopping there, last week, China announced a 43.5% anti-dumping tax on an important chemical imported from the US.
Trade relations took a hit
The value of US goods exported to China will reach 144.9 billion USD in 2023, down 4.3% compared to the previous year. That is the information given in the report published by the US-China Business Council (USCBC) on April 23.
Also according to this report, the decline in agricultural and semiconductor exports contributed to the above results. US-China trade relations last year were affected by the Chinese economic situation and challenges in the relationship between the world’s two leading economies, in addition to long-standing barriers, such as tariffs.
According to the South China Morning Post, USCBC is a non-profit organization representing more than 270 American companies. Mr. Craig Allen, Chairman of USCBC, emphasized that changes in US-China trade policy need to be considered very carefully. “Trade between the US and China also contributes to geopolitical stability and must be taken into account in policy decisions regarding the future of this bilateral relationship” – he added.
According to the report, the value of US semiconductor exports to China last year was 6.8 billion USD, the lowest level since 2016. The report stated that part of the reason for this decline is the US. Expand export controls on advanced semiconductors and chip manufacturing equipment. In addition, agricultural trade between the two countries may face additional challenges in case US exports are targeted in a future tariff dispute.
Hoang Phuong
