China, then targeted by its own retaliatory tariffs on key U.S. exports like soybeans and cars, accelerated the already bitter trade war that disrupted global supply chains and markets in counter-retaliation. Trump's primary motivations were to cut the U.S. trade deficit, shield American industries, and stem the fast rise of China as a contender for global influence.
Meanwhile, in 2020, the Phase One agreement called for a partial truce: China would increase its purchases of U.S. goods and strengthen intellectual property protections, but the other serious issues remained unsolved, including Chinese state subsidy practices.
Going into 2024-2025, more changes have emerged with the tariff war:
Biden's New Tariffs (2024): President Biden placed new tariffs on Chinese electric vehicles, solar panels, and batteries, declaring them a risk to national security.
Global Supply Chain Shift: Major U.S. corporations are relocating manufacturing operations from China to Southeast Asia, India, and Mexico.
China's Counterstrategy: China is tightening its trade bonds with other countries and strengthening deals like the Regional Comprehensive Economic Partnership (RCEP).
Though no full resolution appears to be in sight, negotiations continue. Tariffs, for all that, are now being considered a feature that will stick in U.S.-China relations.
Consequences:
For America: Higher prices for its consumers, damages imposed on farmers and exporters, while saving industries like steel.
For China: At first, slower growth, but diversification and strengthening of the internal market as a result.
For the rest of the world: A large-scale movement of supply chains and trade flows with emerging markets on a higher pedestal.
In conclusion, whatever Trump initiated has now morphed into enduring economic contention. The U.S.-China tariff war has come of age as more than just a short-term political tool; it has mutated into a long-term strategic competitive confrontation that will determine the future of worldwide trade.
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