BEIJING – After eight years of talks, China and 14 other nations, from Japan to Myanmar to New Zealand, officially signed one of the world`s largest regional free trade agreements on Sunday, a pact that was partly marked by Beijing to counterbalance U.S. influence in the region. The China-ASEAN Free Trade Agreement (CAFTA) is the first free trade agreement for foreign negotiations in China and the largest free trade area. CAFTA has strongly encouraged the long-term stable and rapid development of bilateral trade and economic relations. A 2019 statement by the National Association of Manufacturers has made its opposition to the trade war a right that calls for a new structure for U.S.-China trade relations that would eliminate China`s unfair trade practices and allow U.S. producers to create a level playing field.  A 2018 Politico article documented the close partnership between NAM President Jay Timmons and President Trump and said Timmons was fighting the trade war from within Trump.  U.S. trade with China is part of a complex economic relationship. In 1979, the United States and China re-established diplomatic relations and a bilateral trade agreement was signed. This gave the beginning for rapid growth in trade between the two nations: from $4 billion (exports and imports) this year to more than $600 billion in 2017.
Until February 2019, China was the largest trading partner of the United States and currently ranks third behind Canada and Mexico, while it remains the largest source of imports. Over the decades, Chinese exports to the United States have shifted from low-value, labour-intensive products to capital-intensive goods. It is now one of the leading suppliers of advanced technology products in the United States and the global supply chains in which China and the United States are involved are complex. In addition, China is the largest holder of U.S. Treasury bonds. Under the agreement, nearly 96% of products are subject to zero tariffs on customs number and nearly 100% of trade volume The trade agreement has a multitude of victories for the U.S. industry, including the opening up of the biotech, beef and poultry markets. Banks, insurers, pharmaceutical companies and the energy sector are also the main beneficiaries. The United States and China have several unresolved issues regarding bilateral trade between the two countries.
The trade deficit between China and the United States increased significantly, with the volume of imports from China growing much faster than U.S. exports to China. This large trade deficit has been a problem for both economists and policy makers. Some argue that it is an indicator of China`s unfair trade practices, while others attribute the imbalance to the strength of the Chinese economy and production systems heavily influenced by state intervention. The Trump administration has put in place several customs measures to reduce the trade imbalance. Economist Panos Mourdoukoutas explains that Chinese elites fought the trade war on the assumption that China had achieved a “power parity” with the United States.