In Trump’s Trade War, It’s Advantage China
May 12, 2025
Doug Nealy.
Without Rhyme or Reason
“We welcomed the Chinese Communist Party into this global order. And they took advantage of all its benefits. But they ignored all its obligations and responsibilities. Instead, they have lied, cheated, hacked and stolen their way to global superpower status, at our expense.”
So said Senator Marco Rubio during confirmation hearings to become secretary of state in the second Trump administration. In those few lines were indicators of the core beliefs that underlie current US policy toward China: that only China has “ignored all its obligations and responsibilities” and is untrustworthy; that China cheated its way to becoming rich; and, most disturbing, that US trade and technology policy must fully disconnect from China lest it continue to develop “at our expense.”
Rubio took a page from Ronald Reagan’s accusation that the Russians “lie, cheat, and steal.” Except that Reagan found common ground with Moscow on arms control and rejected a tariff war to correct US trade deficits. Now, Donald Trump, in his second time around as President, has rejected finding common ground as the basis for relations with China and is again conducting a tariff war.
Following the Project 2025 script on China—specifically, Peter Navarro’s section on trade relations—Trump has made a significant economic decoupling the essence of his China policy. In direct contrast, Beijing, along with the European Union, has become the leading exponent of economic globalization: multilateralism, negotiations to lower trade barriers, and assured supply chains. To China’s not-so-quiet satisfaction, Trump has put the US on the outside of the system, looking in and finding few allies.
Trump’s Tariff Barrage
For many years, Donald Trump has based his obsession with trade deficits on the belief that Japan and China have “ripped off” America. His current tariff war with China is an extension of the tariffs he imposed in his first term. Except that now, he has gone far beyond past tariff hikes—first, by imposing two 10-percent tariffs, then by hitting China with a further 34-percent tariff in March. When China matched Trump’s tariffs, he piled on, raising the tariff rate to 145 percent in April. China again responded, this time with a 125-percent tariff on US goods plus restrictions on rare earth minerals exports to the US and on 11 US companies that will no longer be able to do business in China.
Trump’s public argument for the tariffs is two-fold: US trade partners with the highest trade surpluses must lower their tariffs on US imports, and US and other multinational firms must move their manufacturing back to the US if they want to avoid tariffs. China, with a trade surplus with the US of around $295 billion, is the leading target.
The Trump strategy comes down to this: If China does not lower its tariffs, the US will not lower its tariff on Chinese goods, forcing China and US companies based in China to seek alternative markets in neighboring countries. But they will supposedly be blocked there, since Trump has imposed very high tariffs on their exports to the US: 46 percent on Vietnam, 49 percent on Cambodia, 24 percent on Malaysia, and 36 percent on Thailand. As an unnamed White House official said: “Once you see a lot of countries—not just in southeast Asia or Asia, but all over—you’ll see that they’re willing to make deals with America, and that exerts pressure on China to hopefully come to the table.” But will it?
Misreading China
When China refused to buckle under last month, Trump wrote on his Truth Social: “China played it wrong, they panicked—the one thing they cannot afford to do.” Actually, China was prepared for the moment. With about $900 billion in trade with the 10-nation Association of Southeast Asian Nations (ASEAN) in 2024, Beijing was not about to step back. Soon after Trump announced his high tariff rates, Xi Jinping visited Vietnam, Cambodia, and Malaysia, emphasizing solidarity against US “unilateralism and hegemonism” at each stop.
He received lavish welcomes, and signed multiple deals that covered cultural and scientific exchanges as well as trade. Malaysia’s Prime Minister Anwar Ibrahim told Xi: “In the face of [US] unilateralism, Malaysia wishes to strengthen cooperation with China and together deal with risks and challenges. The ASEAN cannot approve of any unilateral method of imposing tariffs.”
Brian Harding, former country director for Asian and Pacific security affairs in the Office of the Secretary of Defense, said: “It’s clear that China is portraying itself as the reliable economic partner for Southeast Asian countries. The countries in the region are going to fundamentally not trust the United States moving forward.”
China may play Trump’s tariffs to their advantage in other ways. Contrary to the White House official’s statement quoted above, some international companies, jolted by the unpredictability of US trade policy, are not rushing home. Some have decidedto stay in China.
Apple has announced that it will move its iPhone production to India, not home. Moreover, China might use Trump’s tariff war as an opportunity to make needed domestic policy changes, such as increasing self-reliance in goods it typically imports and investing more in household consumption.
Then there’s Japan, which has begun talks with the US that, according to Trump, involve “Tariffs, the cost of military support, and ‘TRADE FAIRNESS.’” Such pressure tactics may backfire, though Japan also has to contend with Beijing’s warning to Japan and all other trade partners not to use trade talks with Trump as leverage against China.
Who Will Blink First?
Some observers have speculated that Trump’s heavy tariffs on China were designed to force Xi Jinping to the bargaining table at a summit meeting, where a new trade deal favorable to the US would be worked out. Trump agreed with his treasury secretary that the current situation with China was “not sustainable,” but he pretendedthat the US is the aggrieved party:
“Oh, there’s a [tariff] number at which [the Chinese] will feel comfortable. But you can’t let them make a trillion dollars from us. You can’t let them make $750 billion. See, that’s really what’s not sustainable when China makes a trillion dollars, or a trillion one, when we have almost $2 trillion worth of, I call it loss. Some people don’t, but a lot of it’s loss. I say, when you have a trade deficit of $2 trillion I consider that loss.”
That’s a sadly mistaken way to approach China. The Chinese regard the current trade arrangement as mutually beneficial, hence no reason to come begging. Their agreement to an opening round of talks with US trade representatives is nothing more than that: talking, which could go on for a long time.
Beijing believes time is on its side and that Trump, beset by growing anxiety at home over consumer prices and a recession, needs a speedy deal. Dismissive and belittling remarks by Trump—that ending trade with China involves little more sacrifice than Americans buying fewer dolls at Christmas—and JD Vance—“we borrow money from Chinese peasants to buy the things those Chinese peasants manufacture”—won’t win favors from China. As the Chinese might be thinking, “taking advantage of another’s misfortunes” (乘人之危) makes sense right now.
An Avoidable Calamity
US-China relations increasingly resembles a new Cold War, with profound mistrust the central problem. As Foreign Minister Wang Yi said in March 2025 with reference to Trump’s tariffs on Chinese exports: “No country should fantasize that it can suppress China and maintain good relations with China at the same time. Such two-faced acts are not good for the stability of bilateral relations, or for building mutual trust.”
But the Chinese surely understand by now that Trump doesn’t conduct foreign relations with the aim of building trust or finding win-win solutions. His end game is winning—a game that China isn’t interested in playing. The Chinese believe in competing, they are invoking patriotism to justify sacrifices some businesses will make, and they seem to have plenty of alternatives in trade and investments even if Trump completely decouples the US economy from China’s.
Perhaps Trump is banking on a new strategic triangle in international relations, in which closer US relations with Russia will be at China’s expense. So far, however, Xi and Putin continue to affirm their unbreakable friendship and mutual support, most recently the other day when Xi visited Moscow. They are talking about ways to combat Trump’s “dual containment” strategy. It thus seems highly unlikely that Trump will succeed either in mellowing Putin’s ambitions in Europe or making China more compliant with his trade strategy.
Would a different US strategy work, one that uses incentives to engage China in search of common ground? The former US ambassador to China, Nicholas Burns, observed in an interview just days before ending his tenure in January 2025 that the “central question is: how do you compete vigorously and at the same time keep the peace with China? That is what is at stake here for the United States and China.”
Though he strongly endorsed the importance of direct contact with the Chinese, he said that engaging China only occupied about 20 percent of his time. Eighty percent was devoted to competition with China.
And that was in the Biden era. Trump’s China policy is even farther from engagement—that is, a serious dialogue with China for mutual benefit and trust building.
China’s advantage in this war stems not only from its greater maneuvering room than in Trump 1.0. Its economy and its global economic influence are far stronger now. In addition, China benefits from two serious weaknesses in Trump 2.0.
The first is the outdated America First trade policy. It would take us back to a bygone era, one in which supply chains, economic globalization, and presumed national security threats across both oceans did not exist. Instead, we have Trump’s insistence on a beggar-thy-neighbor trade policy, akin to one that helped bring about the Great Depression.
Second is the divisiveness at home that America First is causing. Trump’s autocracy builds on a politics of retribution, mistrust of foreign policy and national security professionals, disregard for social justice and humanitarian assistance, and low valuation of alliances, commitments, pledges, and common values.
Most disturbing of all, Trump and his oligarchy deeply believe that authoritarian government is necessary for America to stay on top. Xi Jinping’s party-state system can get away with that, but a Trump regime will be in constant battle with the forces of democracy and the rule of law at home and abroad.
Advantage China.
Photograph Source: PAS China – Public Domain
Donald Trump is not very good with arithmetic, but that is not a reason the rest of us should not use it. The US economy shrank at 0.3 percent annual rate in the first quarter. This figure needs the usual caveats. This is preliminary data that may be revised substantially in the next two months. It also was a very quirky report, with a huge surge in imports dwarfing everything else, as households and businesses stocked up in advance of Trump’s tariffs taking effect.
Meanwhile, it seems China’s economy remained on a healthy growth path in the first quarter, reportedly growing at a 5.4 percent annual pace. This number also needs some qualifications. China’s growth figures are always somewhat suspect.
Nonetheless, there is little doubt that the long-term story of Chinese growth is more or less accurate. They manufacture more electric vehicles than the rest of the world combined, the same holds true with solar panels and many other cutting-edge items.
They also have hugely overbuilt their housing stock, enough to house 300 millionpeople in now vacant homes. That is a huge amount of mis-investment, but it nonetheless speaks to how much the country actually is producing.
The point is that we should take the country’s growth figures seriously, even not literally. And by their measure the economy grew by roughly 1.2 percent in the first quarter. This translates into $420 billion measured in purchasing power parity GDP.
By contrast, the US shrinkage for the first quarter comes to about $24 billion. It’s roughly 0.075 percent of our $30 trillion GDP.
To be clear, the decline in US GDP reported for the first quarter is not a big deal, and it is very possible that it will be reversed when the data is revised over the next two months. But it is the wrong direction. If Donald Trump envisions that we will surpass China and retake the leadership as the world’s dominant economy, we are so far going the wrong way.
This first appeared on Dean Baker’s Beat the Press blog.
U.S. War on China, a Long Time Coming
Image by Getty and Unsplash+.
Movement toward war with China accelerates. The public, focused on troubles currently upending U.S. politics, does not pay much attention to a war on the way for decades. The watershed moment came in 1949 with the victory of China’s socialist revolution. Amid resurgent anticommunism in the United States, accusations flourished of “Who “lost” China.”
Loss in U.S. eyes was in China the dawning of national independence and promise of social change. In 1946, a year after the Japanese war ended, U.S. Marines, allied with Chinese Nationalist forces, the Kuomintang, were fighting the People’s Liberation Army in Northeast China.
The U.S. government that year was delaying the return home of troops who fought against Japan. Soldier Erwin Marquit, participant in “mutinies” opposing the delay, explained that the U.S. wanted to “keep open the option of intervention by U.S. troops … [to support] the determination of imperialist powers to hold on to their colonies and neocolonies,” China being one of these.
These modest intrusions previewed a long era of not-always muted hostility and, eventually, trade relations based on mutual advantage. The defeated Kuomintang and their leader, the opportunistic General Chiang Kai-shek, had decamped to Taiwan, an island China’s government views as a “breakaway province.”
Armed conflict in 1954 and 1958 over small Nationalist-held islands in the Taiwan Strait prompted U.S. military backing for the Nationalist government that in 1958 included the threat of nuclear weapons.
Preparations
U.S. allies in the Western Pacific – Japan and South Korea in the North, Australia and Indonesia in the South, and The Philippines and various islands in between – have long hosted U.S. military installations and/or troop deployments. Nuclear-capable planes and vessels are at the ready. U.S. naval and air force units regularly carry out joint training exercises with the militaries of other nations.
The late journalist and documentarian John Pilger in 2016 commented on evolving U.S. strategies:
“When the United States, the world’s biggest military power, decided that China, the second largest economic power, was a threat to its imperial dominance, two-thirds of US naval forces were transferred to Asia and the Pacific. This was the ‘pivot to Asia’, announced by President Barack Obama in 2011. China, which in the space of a generation had risen from the chaos of Mao Zedong’s ‘Cultural Revolution’ to an economic prosperity that has seen more than 500 million people lifted out of poverty, was suddenly the United States’s new enemy…. [Presently] 400 American bases surround China with ships, missiles and troops.”
Analyst Ben Norton pointed out recently that, “the U.S. military is setting the stage for war on China. … The Pentagon is concentrating its resources in the Asia-Pacific region as it anticipates fighting China in an attempt to exert U.S. control over Taiwan.” Norton was reacting to a leaked Pentagon memo indicating, according to Washington Post, that “potential invasion of Taiwan” would be the “exclusive animating scenario” taking precedence over other potential threats elsewhere, including in Europe.
New reality
Norton suggests that the aggressive trade war launched against China by the two Trump administrations, and backed by President Biden during his tenure in office, represents a major U.S. provocation. According to Jake Werner, director of the East Asia Program at the Quincy Institute, “Trump’s top military and economic advisers are almost without exception committed to confrontation with China.”
He adds that, “In a context of mounting economic pain on both sides, with surging nationalism in both countries becoming a binding force on leaders, both governments are likely to choose more destructive responses to what they regard as provocations from the other side. A single misstep around Taiwan or in the South China Sea could end in catastrophe.
Economic confrontation is only one sign of drift to a war situation. Spending on weapons accelerates. U.S. attitudes shift toward normalization of war. Ideological wanderings produce old and new takes on anticommunism.
Money for weapons
The annual report of the Stockholm International Peace Research Institute, released in April, says that in 2024 the world’s military spending increased by 9.4% in one year to a $2718 billion; it increased 37% between 2015 and 2024.
U.S. military spending in 2024 was $997 billion, up 5.9% in a year and 19% since 2015. For China, the comparable figures are $314 billion, 7.0%, and 59%, respectively; for Russia, $149 billion, 38%, and 100%; for Germany, $88.5 billion, 29% and 89%. The U.S. accounts for 37% of the world’s total military spending; China,12 %; Russia, 5.5%; and Germany, 3.3%. They are the world’s top spenders on arms.
In the United States, competition from new weapons manufacturers threatens the monopoly long enjoyed by five major defense contractors. These receive most of the $311 billion provided in the last U.S. defense budget for research, development, and production of weapons. That amount exceeds all the defense spending of all other countries in the world.
A new species of weapons manufacturer appears with origins in the high-tech industry. Important products are unmanned aircraft and surveillance equipment, each enabled by artificial intelligence.
Professor Michael Klare highlights one of them, California’s Anduril Industries, as providing the “advanced technologies … needed to overpower China and Russia in some future conflict.” Venture capital firms are investing massively. The valuation of Anduril, formed in 2017, now approaches $4.5 billion.
Palmer Luckey, the Anduril head, claims the older defense contractors lack “the software expertise or business model to build the technology we need.” Multi-billionaire Peter Thiel, investor in Anduril and other companies, funded the political campaigns of Vice President J.D. Vance and other MAGA politicians. Klare implies that Theil and his kind exert sufficient influence over government decision-making as to ensure happy times for the new breed of weapon-producers.
Giving up
Waging war looks like a fixture within U.S. politics. Support for war and the military comes easily. Criticism that wars do harm is turned aside. Broadening tolerance of war is now a blight on prospects for meaningful resistance to war against China.
Recent history is not encouraging. After the trauma of the Vietnam War subsided, anti-war resistance in the United States has been unsuccessful in curtailing wars in Yugoslavia, Iraq, Afghanistan, and Libya – and proxy wars in Ukraine and Gaza –despite massive destruction in all of them and more dead and wounded than can be accounted for.
Official language testifies to routinization of U.S. military aggression. Defense Secretary Hegseth, visiting at the Army War College in Pennsylvania, started with, “Well, good morning warriors. …We’re doing the work of the American people and the American warfighter. [And] the president said to me, I want you to restore the warrior ethos of our military.”
Hegseth traveled recently in the Pacific region, presumably with war against China on his mind. In the Philippines, he remarked, “I defer to Admiral Paparo and his war plans. Real war plans.” In Guam, he insists, “We are not here to debate or talk about climate change, we are here to prepare for war.” In Tokyo, he spoke of “reorganizing U.S. Forces Japan into a war-fighting headquarters.”
Ben Norton writes that, “In his 2020 book American Crusade: Our Fight to Stay Free, Hegseth vowed that, if Trump could return to the White House and Republicans could take power, “Communist China will fall—and lick its wounds for another two hundred years.”
Ideas as weapons
Proponents and publicists of off-beat ideas have long disturbed U.S. politics. Brandishing fantasies and myths, the Trump administrations have fashioned a new brand of resentment-inspired politics. Even so, familiar ideas continue as motivators, notably anticommunism.
Writing in Monthly Review, John Bellamy Foster recently explored ideology contributing to Donald Trump’s hold on to power. Much of it, he reports, derives from California’s Claremont Institute, its office in Washington, and Hillsdale College in Michigan. A leading feature is a kind of anticommunism that targets so-called cultural Marxism. But China and its Communist Party are not immune from condemnation.
Michael Anton is a “senior researcher” at the Claremont Institute and director of policy planning at the State Department. According to Foster, Anton suggested that “China was the primary enemy, while peace should be made with Russia [which] belonged to the same ‘civilizational sect’ as the United States and Europe, ‘in ways that China would never be.’”
Former Claremont Institute president Brian Kennedy, quoted by Foster, notes that, “We are at risk of losing a war today because too few of us know that we are engaged with an enemy, the Chinese Communist Party … that means to destroy us.”
The matter of no ideas comes to the fore. Recognized international law authority Richard Falk, writing on May 6, states that, “I am appalled that the Democratic establishment continues to adopt a posture of total silence with regard to US foreign policy.” Viewing the Democrats as “crudely reducing electoral politics to matters of raising money for electoral campaigns,” he adds that, “I find this turn from ideas to money deeply distressing.”
The Democrats’ posture recalls a 1948 message from Michigan Senator Arthur Vandenburg, a Republican. During congressional debate on President Truman’s Marshall Plan, Vandenburg stated that, “Politics stops at the water’s edge.” This U.S. tradition lapses only occasionally.
Will resistance to war against China end up stronger and more effective than earlier anti-war mobilizations in the post-Vietnam War era? A first step toward resisting would be to build awareness of the reality that war with China may come soon. General knowledge of relevant history would be broadened, with emphasis on how U.S. imperialism works and on its capitalist origins. Anyone standing up for peace and no war ought to be reaching out in solidarity with socialist China.
John Pilger, moralist and exemplary documentarian and reporter, died on December 23, 2023. His 60th documentary film, The Coming War on China, first appeared in 2016. Pilger’s website states that, “the film investigates the manufacture of a ‘threat’ and the beckoning of a nuclear confrontation.” Please view the film on his website.
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