The US-China trade war of 2018-2020: origins and consequences

2018-2019 US-China trade war was inevitable given macroeconomic characteristics, industrial and trade policies, and trade imbalance between the two economies. US led off with escalating tariff rates on Chinese imports, and Chinese responded proportionately. Trade diversion in the form of other Asian exporting countries marginally displaced Chinese exports to US. After two years, few of Trump Administration's objectives were met: Manufacturing employment was not favorably affected. Bilateral trade imbalance changed very little. China was not deflected from its aggressive state-driven campaign of developing national champions to reduce dependence on US technology. Supply chains, especially for intermediates, were disrupted, and US manufacturing companies in some cases went looking for alternative suppliers. US government created new tools to restrict exports of US technology to China and punish Chinese companies. Trade war thus served as precursor or catalyst for broader hardening of bilateral relations.