However, unlike his previous term, Trump has adopted a far more aggressive approach, imposing tariffs on imports from all countries without exception.
While his renewed emphasis on the “America First” doctrine aims to reassert US global leadership and strengthen domestic competitiveness, many economists argue that the sweeping application of tariffs is a strategic misstep — tariffs alone cannot resolve the complex structural causes of the trade deficit.
Indeed, within days of their implementation, financial markets plunged into extreme volatility—the worst since the onset of the COVID-19 pandemic—wiping out trillions of dollars in stock value.
The shockwaves triggered domestic unrest, mounting protests, and growing concern over inflation, unemployment, and the cost of living, all of which fueled fears of an impending recession.
Moreover, these broad-based tariffs strained America’s relationships with allies and competitors, sharply damaging the global economy.
Under growing domestic and international pressure, President Trump attempted to recalibrate. He announced a 90-day suspension and temporarily reduced tariffs on imports from all countries except China to 10 percent.
In just one week, tariffs on Chinese imports rose from 54 percent to 104 percent, then 125 percent.
China quickly responded, increasing tariffs on all US imports to 84 percent. This escalation marked the emergence of a full-fledged trade war between the world’s two largest economies.
Of the total $1.2 trillion US trade deficit, China alone accounts for $295 billion — the most significant bilateral deficit, representing 24.6 percent of the total.
President Trump has long accused China of engaging in restrictive business practices (RBPs) such as dumping, intellectual property theft, and currency manipulation — practices he argues unfairly boost the competitiveness of Chinese exports in global markets.
According to the Trump administration, imposing aggressive tariffs on Chinese goods is the only viable response.
Trump’s strategy treats tariffs as a negotiation tool — a shock designed to bring the opposing party to the table under pressure, where strict terms are demanded in exchange for concessions.
While this tactic might yield short-term results, it is riddled with economic and political risks.
Without a concrete agreement, this approach could soon spiral into a global crisis, which would have serious consequences for economic stability.
It is also essential to recognize that China today is not the China of Trump’s first term.
It is now more powerful, assertive, and better equipped to withstand pressure.
Beijing has described the new tariffs as “blackmail” and “a mistake upon a mistake,” vowing to defend its interests “to the end.”
It has already blacklisted six American artificial intelligence companies — a clear signal of deepening tensions.
The US-China trade dispute could evolve in markedly different directions. One potential course involves a return to the negotiating table, where both parties work toward a partial trade agreement involving mutual concessions.
While such an arrangement might not resolve all underlying disputes, it could ease current tensions and lay the groundwork for broader future cooperation.
For example, Washington might agree to reduce specific tariffs in exchange for Beijing committing to increasing purchases of American goods, particularly in key sectors like agriculture, energy, and advanced manufacturing. Pursuing this diplomatic track, however, is not without complications.
Chinese exports remain deeply embedded in US supply chains — nearly half of components essential to American manufacturing, such as lithium batteries used in electronics.
Replacing these inputs would not be quick or easy, and heightened tariffs could significantly raise production costs for American-made products.
Nonetheless, if both sides show a genuine willingness to engage in constructive dialogue and demonstrate flexibility, this approach offers a credible path to de-escalating the standoff.
Alternatively, a sustained escalation remains a real risk. Should both countries remain in confrontation, the dispute may intensify into a prolonged trade war, marked by the continued imposition of tariffs and other punitive actions.
Such a scenario would likely rattle global markets, dampen investor confidence, and prompt companies to reconsider their supply chain dependencies on China — potentially shifting operations to emerging markets like India or Vietnam.
However, this transition would be slow and economically disruptive, increasing the likelihood of a global recession that harms all parties involved.
This conflict also invites a broader reflection on the massive Western — particularly American — investments in China over the past few decades.
These investments, especially in advanced industries and the openness of Western universities and research centres to Chinese scholars, have significantly contributed to China’s rise in science, technology, and global influence.
The United States and its allies must reassess these dynamics seriously as the strategic and economic balance of power shifts.
So far, recent developments offer little reason for optimism. The international system is under profound stress.
It is not an exaggeration to say we live in a deeply unsettled world on the verge of significant transformation.
Global power structures are undergoing seismic shifts — and unless international actors, especially the US, adopt more thoughtful and cooperative approaches, the world could face a period of intense political and economic turbulence.
A storm may be looming, affecting everyone if managed with confrontation rather than diplomacy
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