PRESIDENT Donald Trump, never one to shy away from a headline-grabbing manoeuvre, announced January 21 that he’s mulling a 10 percent tariff on Chinese imports, potentially set to take effect February 1. This move, the latest salvo in the long-simmering trade spat between the world’s two largest economies, raises eyebrows and questions in equal measure. The proposed tariffs, ostensibly aimed at pressuring Beijing into a more US-friendly trade posture, come against an ironic backdrop: China’s exports, including those to the United States, have recently surged. This trend seems to contradict Trump’s intended goal of curbing Chinese economic influence. During his re-election campaign, Trump upped the ante, threatening tariffs as high as 60 percent on Chinese goods. Such rhetoric fuelled an already heated trade war but has yet to yield the intended concessions. So, what’s driving Trump’s tariff threats now? Is it strategic posturing, or simply an effort to reclaim economic leverage? Clearly Trump is once again casting China as a central antagonist in America’s economic and social struggles. Accusing Beijing of fuelling the fentanyl crisis by supplying precursor chemicals to US neighbours, Trump framed the addiction epidemic as a consequence of lax border enforcement and international indifference.
The rhetoric didn’t stop there. Trump proposed a steep 25 percent tariff on imports from Mexico and Canada, accusing both countries of enabling illegal immigration and fentanyl trafficking into the United States. In tandem, he unveiled plans for an “external revenue service” to centralize collection of tariffs and foreign-derived revenue – a move that signals his continued belief in tariffs as a lever of economic power. Yet, the numbers paint a complex picture. By late 2024, Chinese exports to US companies had risen 4 percent year-over-year, highlighting Beijing’s resilience in the face of punitive trade measures. Meanwhile, the trade imbalance remains staggering: Chinese exports to the US reached $401 billion in 11 months in 2024, while American goods to China totalled just $131 billion. Trump’s escalating accusations against China, combined with his ambitious tariff strategy, reflect a broader effort to realign global trade – though it remains unclear who will blink first in this high-stakes standoff. In the chess game of global trade, tariffs are a double-edged sword, and Donald Trump is no stranger to wielding them. His latest proposal to slap tariffs on all Chinese imports promises to target every product imaginable, from everyday essentials to niche industrial goods. While Trump touts this strategy as a way to protect American interests, the ripple effects could drive inflation higher, leaving US consumers to bear the burden.
Take ship-to-shore cranes, for instance – critical to US infrastructure and entirely imported from China. A 25% tariff on these cranes has already added $131 million in costs to American ports. With no domestic alternatives, industries reliant on such imports find themselves trapped, unable to shift demand or dodge price hikes. It is a harsh reminder that protectionist policies often hit closer to home than intended. Meanwhile, Beijing appears unfazed, playing a patient and calculated game. The Belt and Road Initiative and deeper partnerships with BRICS nations are part of a broader strategy to reduce reliance on the US market. As China diversifies its trade network, its willingness to absorb the tariff hit seems increasingly unlikely. The question remains: How long can the US sustain this high-stakes trade war before consumers and industries alike demand a new strategy? For now, the clock is ticking.
As Trump’s trade war escalates, American businesses face increasing difficulty finding alternatives to Chinese imports. Extending tariffs to key trading partners, like the EU, Canada or Mexico, could raise import costs significantly, creating a ripple effect with few affordable options. The already sanctioned Russian market further limits viable suppliers and previous tariffs on Canadian and Mexican steel drove US iron and steel prices up by 17.7% in just eight months. This results in a zero-sum game for American consumers, who face higher costs or limited access to goods, regardless of origin. Meanwhile, China’s economic resilience presents an uncomfortable truth: the trade war is not turning the tide as intended. In 2024, China’s exports surged by 10.7% in December, totalling $3.58 trillion for the year, up nearly 6% from 2023. This led to a record trade surplus of $992 billion, a 21% increase from the previous year. These figures reveal China’s ability to counter US tariffs while diversifying its trade partners, highlighting the limitations of the trade war approach and underscoring the volatility of global trade dynamics.
This upward trajectory underscores Beijing’s success in countering US policies. With unilateral tariffs and protectionist measures sowing distrust, China is actively diversifying its trade partners. Initiatives like the Belt and Road and strengthened ties with emerging economies bolster its independence from American markets. While this temporary surge in trade benefits both economies in the short term, it reveals the volatility of a system increasingly beset by competition and discord. The long game, it seems, is being redefined – and not in Washington’s favour. As Donald Trump prepared for his second inauguration ceremony, the White House facilitated a phone call with Chinese President Xi Jinping – a carefully orchestrated gesture of diplomacy. President Xi expressed hope for a “good start” to the China-US relationship, emphasizing the importance of respecting “each other’s core interests” despite inevitable differences. For Beijing, the focus appears to remain internal. China seems unfazed by the return of Trump’s mercurial leadership. So far, the state media has adopted a measured tone, reflecting Beijing’s preference for a steady course over reacting to external unpredictability. Apparently, China’s strategy is patient and deliberate. Recent interactions suggest a willingness to let Trump make the first move, matching his actions with calculated responses. While the United States enjoys advantages in many arenas, time favours China. With a four-year timeline limiting Trump’s ambitions, President Xi Jinping has the luxury of playing the long game.
—The writer is political analyst, based in Karachi.
immhza6@gmail.com
