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Updated July 1, 2019
U.S.-China Relations
Under U.S. President Donald J. Trump and Chinese
United States and has sought to re-set the relationship’s
President Xi Jinping, the United States and the People’s
terms. In 2018, China was the United States’ largest
Republic of China (PRC or China) are engaged in what the
merchandise trading partner (with two-way trade at $660
Trump Administration terms “great power competition,”
billion), third-largest export market (at $120 billion), and
including a prolonged stand-off over trade, severely
largest source of imports (at $540 billion). China is also the
straining ties on the 40th anniversary of the two countries’
largest foreign holder of U.S. Treasury securities (at $1.1
establishment of diplomatic relations. The two countries
trillion as of April 2019).
lead the world in the size of their economies, their defense
budgets, and their global greenhouse gas emissions. Both
In March 2018, the U.S. Trade Representative (USTR)
are permanent members of the United Nations Security
released the findings of an investigation into PRC policies
Council and are each other’s largest trading partners.
related to technology transfer, intellectual property, and
innovation under Section 301 of the Trade Act of 1974
Trump Administration strategy documents have set the tone
(P.L. 93-618). The investigation identified four PRC
for U.S. policy toward China. The December 2017 National
practices of particular concern: forced technology transfer
Security Strategy (NSS) describes both China and Russia as
requirements, discriminatory licensing requirements, state-
seeking to “challenge American power, influence, and
directed investments in and acquisitions of U.S. companies
interests, attempting to erode American security and
to obtain cutting-edge technologies and intellectual property
prosperity.” A summary of the January 2018 U.S. National
(IP), and state-directed cyber-theft of U.S. trade secrets. To
Defense Strategy describes China as a “strategic
pressure China to address those issues, the United States
competitor” and charges that it is pursuing a military
has so far imposed Section 301 tariffs of 25% on three
modernization program that “seeks Indo-Pacific regional
tranches of imports from the PRC, valued at an estimated
hegemony in the near-term and displacement of the United
$250 billion. (See Table 1 below.) On May 10, 2019, the
States to achieve global preeminence in the future.” The
President said on Twitter that “the process has begun” to
Department of Defense’s June 2019 Indo-Pacific Strategy
impose a 25% tariff on nearly all remaining U.S. imports
identifies “the primary concern for U.S. national security”
from China, valued at an estimated $300 billion. After
as “inter-state strategic competition, defined by geopolitical
meeting Xi in Osaka, the President announced that existing
rivalry between free and repressive world order visions.”
tariffs on imports from the PRC would stay in place “for at
The document states that the PRC, “in particular,” “seeks to
least the time being,” but that the United States would lift
reorder the region to its advantage by leveraging military
the threat of tariffs on the remaining PRC imports, and that
modernization, influence operations, and predatory
stalled negotiations to resolve the trade dispute would
economics to coerce other nations.” President Trump struck
restart. The President pledged that for visa purposes, PRC
a different note at the G20 Summit in Osaka, however.
students would be treated “just like anybody else.” The
After a June 29, 2019, meeting with China’s President Xi
President said Xi agreed to buy “a tremendous amount of
Jinping—the two leaders’ fifth summit since 2017—
food and agricultural product” from the United States.
President Trump was asked how he would characterize the
U.S.-China relationship. “I think we’re going to be strategic
Table 1. Section 301 Tariffs on Imports from the PRC
partners,” he said. In an apparent reference to off-and-on
trade negotiations, he added, “if the right deal is structured,
Volume of
Additional
we can be great for each other.”
Effective date
imports affected
tariff rate
July 6, 2018
$34 bil ion
25%
China’s public language about its threat environment has
been less stark than the United States’. In 2002, China’s
August 23, 2018
$16 bil ion
25%
then-leader Jiang Zemin proclaimed the first two decades of
September 24,
$200 bil ion
10%; subsequently
the 21st century to be “a period of important strategic
2018; May 10,
raised to 25%
opportunities, which we must seize tightly and which offers
bright prospects.”
2019
Despite rising tensions with the United
States, in March 2019 Premier Li Keqiang stated, “China is
Source: USTR
still in an important period of strategic opportunity.”
Actions Against PRC Technology Companies
Select Issues in the Relationship
U.S.-China trade frictions and strategic competition have
dovetailed in U.S. actions against several prominent PRC
Trade
technology companies. On May 15, 2019, President Trump
The Trump Administration has accused China of
signed Executive Order 13873, authorizing the Secretary of
“economic aggression” in its trade relationship with the
Commerce to ban certain technology transactions involving
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U.S.-China Relations
“foreign adversaries.” On the same day, the Commerce
and are subjecting all Muslim residents to stifling levels of
Department added PRC telecommunications giant Huawei
technology-enhanced surveillance. In October 2018, Vice
and 68 of its non-U.S. affiliates to the Bureau of Industry
President Mike Pence asserted that Uyghurs in internment
and Security Entity List, requiring an export license for the
camps “endure around-the-clock brainwashing” and that
sale or transfer of U.S. technology to any of them. (On May
camp survivors believe Beijing seeks “to stamp out the
20, 2019, the Department issued a three-month temporary
Muslim faith.” Chinese authorities call the camps
general license authorizing some continued transactions
“education and training centers,” where “students” learn job
with Huawei.) In apparent response to U.S. actions, China’s
skills and undergo “de-extremization.”
Ministry of Commerce in June 2019 announced plans for its
own “unreliable entities list,” to include foreign entities that
Taiwan and the U.S. “One-China” Policy
“damage the legitimate rights” of Chinese firms by
Under the U.S. “one-China” policy, the United States
“blocking or cutting off supply to Chinese companies on
maintains only unofficial relations with Taiwan while
non-commercial grounds.” After meeting Xi in Osaka,
upholding the 1979 Taiwan Relations Act (P.L. 96-8),
President Trump said he had agreed to let U.S. companies
including selling arms to Taiwan. The PRC, which claims
“sell their equipment to Huawei,” clarifying that he was
sovereignty over Taiwan, has long objected to U.S. moves
referring to “equipment where there is no great national
it sees as introducing “officiality” into the U.S.-Taiwan
emergency problem.” President Trump said he and Xi
relationship. In 2019, China has strongly criticized monthly
agreed not to make Huawei “a big subject” between them
U.S. Navy transits of the Taiwan Strait and a May 2019
for now, and rather to “save that for later.”
meeting between the U.S. and Taiwan national security
advisors, the first such meeting since the United States
Secretary of State Mike Pompeo has repeatedly urged allies
broke diplomatic relations with Taiwan in 1979. On May
not to work with Huawei, warning European allies in June
30, 2019, China’s Ministry of National Defense accused the
2019, “don’t do anything that would endanger our shared
United States of “playing with fire.”
security interests or restrict our ability to share sensitive
information.”
South China Sea
In 2018, the United States requested that
Since 2013, the PRC has built artificial islands on seven
Canada detain top Huawei executive Meng Wanzhou and
disputed sites in the South China Sea’s Spratly Islands and
charged her with financial fraud related to Iran sanctions.
turned them into military outposts. To challenge excessive
She faces possible extradition to the United States. China
maritime claims and assert the U.S. right to fly, sail, and
has retaliated against Canada by detaining and later
operate wherever international law allows, the U.S. military
arresting Canadians Michael Kovrig and Michael Spavor on
undertakes both freedom of navigation operations and
state secrets charges and cutting off imports first of
presence operations in the sea. In June 2019, Chinese
Canadian canola seed, and then of Canadian meat.
Minister of National Defense Wei Fenghe appeared to refer
China’s Belt and Road Initiative
to those operations when he described “large-scale force
China’s Belt and Road Initiative (BRI) aims to boost
projection and offensive operations” as “the most serious
economic connectivity across continents, primarily through
destabilizing and uncertain factors in the South China Sea.”
financing of major infrastructure projects. Trump
North Korea
Administration officials have been outspoken critics of
From 2006 to 2017, China voted at the U.N. for ever-
BRI, portraying BRI projects as saddling countries with
unsustainable levels of debt and, in Secretary Pompeo’s
stricter sanctions on North Korea over its nuclear weapons
words, exacting “a political cost … which will greatly
and missile programs. The Trump Administration deems
exceed the economic value of what you were provided.”
China’s sanctions implementation to be “at times
inconsistent, but critical.” The announcement of President
The Better Utilization of Investments Leading to
Trump’s June 2018 summit with North Korean leader Kim
Development (BUILD) Act of 2018 (P.L. 115-254) is
Jong-un led to a thaw in previously frosty China-North
widely portrayed as a U.S. response to BRI. In April 2019,
Korea ties. Since March 2018, Kim has visited China four
President Xi Jinping sought to re-brand BRI, promising
greater transparency and pledging attention to “commercial
times and President Xi has visited North Korea once, in
June 2019. China urges U.S.-North Korea dialogue under a
and fiscal sustainability of all projects.”
“dual-track approach,” with one track focused on
Fentanyl and Other Synthetic Opioids
denuclearization and the other on a peace mechanism.
According to the U.S. Centers for Disease Control and
Select Legislation in the 116th Congress
Prevention, synthetic opioids, primarily fentanyl, accounted
S. 1790 and H.R. 2500, the National Defense Authorization
for more than 28,000 U.S. drug overdose deaths in 2017.
Act for FY2020, both contain multiple provisions related to
The Drug Enforcement Administration states that illicit
fentanyl and other synthetic opioids are “primarily sourced
China. So, too, do S. 1589 and H.R. 3494, the Damon Paul
from China and Mexico.”
Nelson and Matthew Young Pollard Intelligence
Responding to pressure from the
Authorization Act for Fiscal Year 2020. Other pending
Trump Administration, on May 1, 2019, China added all
legislation related to China would address such issues as
fentanyl-related substances to a controlled substances list.
arms control, cybersecurity, defense, fentanyl, Hong Kong,
Mass Internment of Muslim Minorities
human rights, North Korea, political influence operations,
In the name of preventing terrorism, extremism, and
socialism, the South China Sea and East China Sea,
separatism, authorities in China’s Xinjiang region have
Taiwan, technology, trade and investment, and visas.
interned an estimated one million or more predominantly
Muslim ethnic minorities, mainly Uyghurs and Kazakhs,
Susan V. Lawrence, Specialist in Asian Affairs
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U.S.-China Relations
IF10119
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