For years, the United States has grappled with intellectual property theft from China, a problem that persisted even after Trump's 25% tariffs during his first term. This ongoing issue has prompted calls for more decisive action. Beijing exploited American market access and corporate interests to rise as Washington's most formidable strategic competitor. Around the turn of the century, the U.S. relinquished its dominance in critical minerals, began importing vast amounts of Chinese goods, and exported intellectual property to gain access to Chinese markets while the Chinese Communist Party grew into a significant adversary.

China's manipulation of U.S. industries and policies is evident through various historical events. From attaining Most Favored Nation status and WTO accession to dominating the rare earth metals market, imposing retaliatory measures during Trump's trade war, pressuring U.S. corporations to self-censor, and demanding technology transfer for market entry, these actions have shaped the current economic landscape between the two nations.

The Evolution of Trade Policies

Throughout the 1990s, China aggressively pursued normalized trade relations, finding support from President Bill Clinton. By 2000, Congress granted China permanent normal trade relations, facilitating its entry into the World Trade Organization in 2001. Despite known human rights issues and state control, China made vague promises of reform, which helped convince the U.S. At the time, integrating China into the global economy was seen as a way to promote Western values and shift its government towards market-oriented policies.

This decision significantly altered the trade dynamics between the two nations. Imports from China surged dramatically, reaching $426.9 billion in 2023 compared to $102.3 billion in 2001. Conversely, U.S. exports to China increased but at a slower pace. The de minimis threshold for imports was raised multiple times, allowing duty-free entry for low-value shipments, a loophole widely exploited by Chinese sellers until recently addressed by President Trump. These developments underscored the complexities of managing trade relations while addressing concerns over intellectual property theft.

Strategic Leverage and Corporate Pressures

China's dominance in rare earth metals emerged as a powerful tool in its economic arsenal. In the 1980s, the U.S. was a key player in this industry, but rising costs led to the closure of its primary mine. Meanwhile, China's cheap labor, minimal environmental regulations, and government support enabled it to control over 80% of the market. A diplomatic spat in 2010 demonstrated China's willingness to use its mineral dominance strategically, cutting off Japan's access and alarming the U.S. about its reliance on Chinese resources. Subsequent administrations have sought to revitalize domestic mining, but regulatory hurdles remain significant obstacles.

During Trump's presidency, tensions escalated into a full-blown trade war, marked by tit-for-tat tariffs and retaliatory measures. While a "phase one" deal was eventually reached in 2020, it did little to curb China's aggressive industrial strategies. Additionally, Beijing has pressured U.S. corporations to align with its political positions or risk losing market access, affecting companies like Nike, Meta, Disney, and the NBA. Furthermore, China's demands for technology transfer in exchange for market access have weakened U.S. innovation and intellectual property competitiveness, costing billions annually according to a 2018 report.