Trump vs. China: A Trade War with No Endgam

  The 21st century will likely be remembered as an era of intense great power competition. Nowhere is this more evident than in the growing ...

 

The 21st century will likely be remembered as an era of intense great power competition. Nowhere is this more evident than in the growing trade rivalry between the United States and China. The trade war launched by Trump in 2018 has become a key milestone in this broader geopolitical rivalry.

While the U.S. accounted for 40% of global manufacturing output after 1950, today that share has dropped to 23%. Meanwhile, China, which produced less than 9% of global manufacturing output in 2004, has surged to 29% by 2023, surpassing the combined output of the U.S., Japan, Germany, and India. This asymmetry has transformed the U.S.-China relationship into a fierce battleground, especially during Trump’s first term.

With the second Trump administration, we are witnessing a new dimension to the U.S.-China trade war, one with profound geopolitical consequences. Acting under the slogan “America First,” Trump imposed tariffs of up to 145% on Chinese imports, effectively disrupting trade flows. In response, China imposed a 125% tariff on U.S. imports, signaling its determined resistance.

Trump’s impassioned remark that “we must take the bitter medicine” could be seen as an attempt to justify the likely inflationary effects of these policies. However, this strategy does not seem to deliver real benefits to the U.S. economy. His first 100 days in office are already being described as among the most unsuccessful presidential periods in recent memory.

Ok then what is Trump’s goal?

His primary aim is to close the chronic trade deficit between the U.S. and China and to protect the American workforce from China’s low-cost production competition.

Yet, this strategy imposes additional costs on American consumers and forces U.S. companies to redirect their supply chains, often along less efficient routes. Many American firms rely on Chinese imports for intermediate goods, which raises cost pressures and threatens sectoral profitability.

China, however, views Trump’s tariff threats as a bluff. Citing the argument that “there are no winners in a trade war,” China’s main focus is on who will blink first.

Determined not to lose at the negotiating table what it has gained on the ground, China frames its approach as seeking a win-win outcome rather than a zero-sum game. Without making major concessions, China is also turning to alternative trade partners, especially the European Union.

While both sides aim to secure strategic victories, it is their own economies—and the global economy—that are ultimately bearing the brunt. The most sensible step would be to swiftly engage in diplomacy, seeking a middle ground through comprehensive reforms and negotiations.

Although Trump claims they are close to an agreement, China continues to assess the situation carefully.

Trump’s ambitious rhetoric, invoking the “art of the deal” and claiming that “trade wars are good and easy to win,” is no longer convincing.

China has abandoned its cautious and conciliatory stance from 2018; today, we see a more assertive and determined China on the world stage.

The deepening strategic partnership with Russia and the multipolar trend promoted by BRICS signal important global shifts.

As Sun Tzu wrote in The Art of War, “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”

The trade war is shaping up to be just such a contest. While Trump envisions ending the tariff war he started with a high-profile, attractive agreement, China intends to hold out for as long as necessary.

In fact, believing that one side will emerge victorious in a trade war is, in my opinion, to ignore the essential economic and political realities.

Such battles may create an illusion of short-term victory, but in the long run, no one will emerge as the true winner.