When will President Donald Trump's trade war with China end? Will it end? And if it does, who's to say another American president at some time in the future won't initiate a new one? Policymakers, traders, business analysts, and prognosticators the world over are trying to answer all of these questions, a remarkably difficult task given the value Trump places on unpredictability. And, true to form, Trump's salvo of tariffs over the last several weeks—instituting a chaotic reciprocal tariff regime, only to walk it back for 90 days while increasing restrictions on Chinese exports—is the epitome of unpredictability.
Washington and Beijing are now staring at each other waiting for the other to blink. Trump's tariffs on Chinese goods are now at a whopping 145 percent. Despite carve-outs on certain high-tech products like iPhones as well as Trump's own confidence that Chinese President Xi Jinping will eventually pick up the phone and make a call to deescalate the situation, Xi isn't in a talking mood right now. Rather than capitulate or beg for a negotiation, China is retaliating like it did in the past. U.S. goods into China are now slapped with a 125 percent levy; big U.S. companies are being put on Beijing's "entity list," limiting their access to certain Chinese products; and the Chinese Communist Party's propaganda machine is waging a war of words against the United States. On April 13, China suspended exports of some rare earth minerals, and two days later it paused the purchase of Boeing passenger aircraft.
This isn't Washington and Beijing's first rodeo. During the first Trump administration, Washington hit about $335 billion worth of Chinese goods with various tariff levels, some higher than others. That years-long dispute eventually ended in 2020, when Trump signed the Phase-1 trade accord that mandated Beijing to purchase tens of billions of dollars in additional U.S. products (Beijing didn't keep to the terms, due in part to the global COVID-19 pandemic).
The difference between now and then, however, is stark. Back then, U.S. and Chinese officials were still interacting on issues ranging from North Korea's nuclear weapons program to the fentanyl trade. Today, the trade war between the world's two largest economies and biggest military spenders is beginning to bleed in other areas of policy. Historically, trade was one segment of the wider bilateral relationship where U.S. and Chinese policymakers could sit in the same room without tearing each other's eyes out. Now it's just one more area of extreme competition. The last good leg of the wobbly stool is now wobbly as well.
This obviously matters from the standpoint of global economics, as the stock market can attest. But with the mutual tariffs piling on and no scheduled talks on the horizon, it also matters a great deal for where U.S.-China relations are going. "[This is] one of the most serious crises in U.S.-Chinese relations since the resumption of full diplomatic relations in 1979," former U.S. ambassador to China R. Nicholas Burns said this week.
Great powers learn to silo disagreements in order to manage other disputes, either because they have a mutual interest on a specific issue or because a failure to do so could result in confrontation. The United States and the Soviet Union were bitter adversaries during the four decade-long Cold War, competing for influence on multiple continents and arming their respective proxies from as far afield as Afghanistan, Angola, and Nicaragua in order to enhance their power at the other's expense. Even so, partly out of necessity and driven by fear of the unknown, both states were still able to strike arms control and military de-escalation agreements when the opportunity presented itself.
Notwithstanding predictions from high-profile international relations experts that the United States and China are likely to stumble into a war at some point in our lives, both have a pretty compelling interest in avoiding such a scenario. Yet what should be a fairly obvious goal is much harder to meet if diplomacy becomes an exception rather than a rule. And let's face it—right now, Americans and Chinese are more interested in talking past each other than at each other.
This situation is only going to get more intractable as the days go by. The longer the trade war drags on, the more likely Washington and Beijing will find other ways to retaliate beyond economics. Separating trade disputes from other policy lanes will become harder. Working groups that were previously established to manage mutual concerns like illegal immigration, counter-narcotics, North Korea, and security in the Middle East will be suspended or break down entirely. This is already occurring to some degree; Chinese Foreign Minister Wang Yi's outreach to U.S. Secretary of State Marco Rubio and National Security Adviser Mike Waltz has been rebuffed, and inter-agency groups formed during the previous administration are now stalled.
None of this serves the interests of either the United States or China. While we may be a long way from a trade war descending into a shooting war, both of these superpowers must take pains to co-exist peacefully. If negotiations are less rare, then we're banking on luck.
Newsweek