Ever since Donald Trump assumed the office of the presidency for the United States the reasoning for his strategy to deal with ongoing trade relations. Donald Trump ran on threats and promises of altering trade relations between China and other countries during his election campaign. Starting in 2018, the US applied trade tariffs on goods primarily imported from China such as electronic goods (e.g. batteries) and aeroplane parts, among other things. President Trump, importantly placed a tariff on importing any foreign solar panels into the US, ultimately causing a destabilizing effect on the market of Photovoltaic goods. In retaliation, the Chinese government increased its own tariffs for the US imported good such as a number of food products (e.g. Soybeans) and aluminium goods.
This back and forth, continued for a number of months until China went to the World Trade Organisation (WTO) to complain that China’s trade interests were being harmed.
In September the US was still imposing greater tariffs on more imported Chinese goods, with China reciprocating their actions.

What’s changed?

Last week China’s autocratic leader, Xi Jinping publically stated that a trade war will produce no winners, advocating for a move to form better trade relations between the two world superpowers. However, it was an odd move as leaders of both states claimed that the already billions of dollars worth of tariffs could be increased.

At a summit in Papua New Guinea, Xi Jinping said that “history has shown that confrontation, whether in the form of a cold war, a hot war or a trade war, will produce no winners” and “this is a short-sighted approach and it is doomed to failure”. This would appear to be a remark aimed at the United States’ weakening foreign policy relations. However, vice president Mike Pence has said that the US will only change its course if China acts first. This all took place at the Asia Pacific Economic Cooperation (APEC) meeting in PNG last week.

Wait, there’s more to understand

The Chinese government is making big moves towards expanding its influence on a global scale and specifically making itself indispensable to many Asian and African countries. This includes building roads across Pakistan to connect China and Pakistan, as well as building strong economic, military and cultural connections. This is all in attempts to strengthen China’s position as a world superpower.
This, of course, has some downsides for states who are in a military battle over valuable land or sea claims, as is seen in the South China Sea. The US is also urging states to stay away from China’s hefty investments, which may cripple smaller economies over time.

Hello, Australia is involved!

So amid the US-China trade disputes going on, Australia has somehow found itself caught in the middle. As a prominent state in the Asia-Oceania region and an old ally of the US, Australia is balancing its interests with both states. Australia and the US are also building a military base in the South China Sea which may alter Australian-Chinese relations. It is possible that the APEC summit showed us that trade relations may be improving for the US and China purely due to a change in political will, but only time will tell.