The trade war between the world’s two largest economies has been months in the making. The opening salvo was fired on January 22, 2018, when U.S. President Donald Trump approved more than $10 billion worth of tariffs on solar panels and washing machines. Although the tariffs were universal, it is clear who the intended target was. In 2015, China was the biggest importer of solar modules to the United States, which accounted for 34 percent of all imports. In 2016, 13 percent of the washing machine imported by the United States came from China.

To a large extent, the trade war was predictable. During his campaign for the presidency, candidate Trump promised to crack down on China’s unfair trade practices, and the trade war is a manifestation of that. In December 2017, the Trump administration released its National Security Strategy, which labeled China as a strategic competitor and accused it of seeking to “ erode American security and prosperity.”

In April of 2018, the U.S. Department of Commerce slapped Chinese telecom giant ZTE with a 7-year export ban for violating sanctions against Iran, denying ZTE access to vital components for its smartphones and telecommunications gear. Facing bankruptcy, ZTE was forced to pay over a $1 billion in penalties, appoint an American Chief Export Compliance Officer, and add nine new members to its 14 member board in order to maintain its supply chain.

Examining this timeline of events, it is not difficult to imagine that the aggressive prosecution of ZTE was part of a larger policy to counter Beijing’s “Made in China 2025” initiative, which is designed to reduce China’s reliance on foreign imports and shift its labor-intensive manufacturing economy to a higher value-added manufacturing economy.

One aspect of the policy that has caused significant ire in the Trump administration is China’s requirement that foreign companies transfer cutting-edge technology to Chinese companies in order to access China’s markets. China is thus able to acquire new technologies with little to no effort of its own, a practice that the U.S. government has likened to state sponsored theft.

Another practice that the Trump administration has taken issue with is China’s alleged tendency to depreciate its currency in order to obtain a price advantage for its exports. In mid-June, the Chinese currency, the Yuan, depreciated to 7 to 1 against the U.S. dollar. The Trump administration is now pushing China to stop depreciating the Yuan. However, the evidence shows that is not the case. According to Marc Chandler, Head of Global Markets at Strategy Brown Brothers Harriman, the depreciation of the Chinese currency “ is more about the dollar than the renminbi.” The Federal Reserve recently indicated that it will continue to take measures to strengthen the U.S. dollar, and its “upbeat assessment of the U.S. economy” holds true, the relative strength of the Yuan is unlikely to change. The cyclical softening of the Chinese economy and the on-going trade war is also placing additional downward pressure on the Yuan.

If the Trump administration’s complaints about the Yuan sound familiar it’s because we have been here before. During the 1980s, Japan was America’s biggest trading partner and Japanese goods flooded the U.S. market. The resulting trade deficit between Japan and the United States prompted the rise of protectionism and the imposition of tariffs on Japanese imports. In order to alleviate the trade war, Japan signed on to the Plaza Accord in 1985, which allowed the U.S. dollar to depreciate 50 percent against the Japanese Yen. After signing the Plaza Agreement, Japan experienced an economic recession during the first half of 1986, and the average growth rate of its economy was only 1.1 percent between 1990 and 2011. It is clear that the Plaza Agreement was a manifestation of U.S. policy to contain Japan’s rising influence in East Asia.

China faces a similar dilemma, but signs have emerged that it will seek to avoid the mistakes of the past. On March 28, the Global Times, a news outlet endorsed by the Chinese government, ran a commentary asserting that “China won’t repeat Japan’s Plaza Accord mistake” by appreciating the Chinese Yuan in relation to the U.S. dollar.

Moreover, the structural economic differences between Japan and China will likely insulate China from the worst effects of U.S. tariffs. Unlike the majority of Japanese exports in the 1980s, many of the finished products made by China are produced for the U.S. marketplace. In the end, it is U.S. businesses and consumers who will suffer the most from the imposition of tariffs on Chinese goods.

In today’s globalized economy it is nearly impossible for trade wars to lead to desirable outcomes for any of the parties involved. This is especially true in the case of the United States and China, who are each other’s largest trading partners. The current trade war is heavily influenced by great power competition, and elements of national security policy have clearly bled into the economic realm. Unfortunately, the greatest victims of the trade war will be consumers in both countries, followed closely by the global economy.