Trade Wars and Retaliation in the Twenty-First Century

In 2018 the United States imposed tariffs on imported steel, aluminum, washing machines and solar panels, then on hundreds of billions of dollars of Chinese goods, citing national security, intellectual-property practices and trade deficits. China retaliated with tariffs on American goods including soybeans, and the US government made large payments to farmers to offset lost sales. The two countries signed a 'Phase One' agreement in January 2020 in which China pledged to buy more US goods, though purchases fell short of the targets.

Supporters argued that tariffs gave leverage against unfair practices and protected strategic industries; critics pointed to research showing that US buyers bore most of the cost and that retaliation hurt exporters. Trade also partly rerouted, with more imports arriving from Vietnam, Mexico and other countries. The episode shows how trade policy now mixes economics with security and geopolitics, and how difficult it is to reverse once tariffs are in place.