# US-China trade war and technology decoupling

### Tariffs, semiconductor restrictions and fractured production networks

The United States and China shifted from escalating tariffs to an increasingly broad competition over access to advanced technology, semiconductor supply chains and industrial capacity. The dispute began as a response to complaints about intellectual property, state subsidies and market barriers. It expanded because Washington viewed dependence on China for certain strategic technologies as a security risk, while Beijing portrayed American measures as discriminatory efforts to restrict China's development.

- **2017:** The U.S. Trade Representative initiated a Section 301 investigation into China's practices involving technology transfer, intellectual property and innovation; these findings became the formal rationale for tariffs the following year.
- **2018:** Washington imposed multiple rounds of tariffs on Chinese imports; China responded with duties on American goods; Businesses faced higher costs and uncertainty as [trade protectionism](/drivers/trade-protectionism) became central to bilateral policy.
- **September 2018:** A U.S. tariff action targeting approximately $200 billion in Chinese goods signaled the growing scale of the conflict and the use of import duties as bargaining pressure.
- **2019:** Negotiations alternated with threatened or implemented tariffs, leaving firms unsure which cross-border production decisions would remain economical.
- **13 December 2019:** The United States and China announced an agreement in principle on a first-phase trade arrangement, seeking commitments on purchases, intellectual property and other disputed practices.
- **January 2020:** The countries signed the Phase One agreement; Existing tariffs nevertheless remained important, limiting claims that the trade conflict had been fully resolved.
- **2022:** Washington expanded export controls on advanced computing and semiconductor-manufacturing technology, moving the dispute more clearly into [technology-export restrictions](/drivers/export-control-intensity).
- **2023:** Additional licensing measures targeted access to selected advanced chips and associated equipment, reflecting concern about military as well as commercial applications.
- **13 September 2024:** USTR finalized tariff modifications after a statutory four-year review, including stronger action on strategic goods and industrial supply chains.

Consumers and manufacturers faced increased import costs, disrupted sourcing and uncertainty over where to locate capital-intensive production. Critics argued that tariffs functioned partly as taxes on domestic importers and that restrictions could encourage duplication while reducing global efficiency. Companies with suppliers and customers in both countries confronted new compliance and financing burdens.

Supporters contended that narrowly targeted restrictions could protect strategic capabilities and address unfair subsidies or coercive trade practices. The disagreement concerns the boundary between legitimate national security and broad commercial exclusion. Policies intended to strengthen [supply-chain resilience](/drivers/global-supply-chain-resilience) may backfire if substitutes are expensive or concentrated in another vulnerable region. Both governments expanded industrial-policy intervention, altering investment incentives well beyond their own borders. The long-run result is not simply lower bilateral trade; it is a reorganization of the rules, equipment and knowledge on which global production depends.

The geographic impact reached suppliers in Taiwan, South Korea, Japan and Europe because chip design, fabrication, tools and materials are distributed across jurisdictions. Export controls can therefore alter investment decisions of third-country firms even when neither their factories nor their immediate customers are located in China or the United States.

By September 2024, trade officials were still changing tariff schedules more than six years after the dispute began. That persistence mattered because corporate investment plans often extend across periods far longer than an election cycle.

In September 2018, Beijing announced retaliatory tariffs targeting approximately $60 billion of U.S. imports after Washington escalated its duties on Chinese goods.

In August 2017, the Section 301 investigation established the formal U.S. process for examining Chinese technology-transfer practices before the 2018 tariff escalation.

## Dated facts

- 2025: Bessent leads US side in Geneva trade deal with China. https://factrail.ai/facts/bessent-geneva-us-china-tariff-deal-2025-05-12. Sources: https://www.whitehouse.gov/releases/2025/05/art-of-the-deal-u-s-china-ink-initial-trade-deal/, https://www.govinfo.gov/content/pkg/DCPD-202500592/html/DCPD-202500592.htm, https://www.whitehouse.gov/briefings-statements/2025/05/joint-statement-on-u-s-china-economic-and-trade-meeting-in-geneva/.
- 2018: U.S. imposes first Section 301 tariffs on Chinese goods. https://factrail.ai/facts/lighthizer-section-301-china-tariffs-2018-07-06. Sources: https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/july/statement-us-trade-representative.

## Methodology

https://factrail.ai/methodology

Canonical: https://factrail.ai/drivers/us-china-trade-war-and-technology-decoupling