Trump’s Return : Will US-China Trade Tensions Escalate ?

Hardly re-elected, Donald Trump expresses his intentions to pursue an uncompromising protectionist policy and seeks to impose record tariffs on Chinese imports. This approach echoes his first term, where heavy tariffs set a precedent in the Sino-American trade war. But this time, in a post-pandemic context where the global economy is still fragile, the repercussions could prove more significant. While Beijing advocates dialogue, the world prepares for a new phase of trade confrontation with potentially global effects.

An uncompromising trade showdown

Donald Trump, freshly back on the political scene, expressed his desire to impose tariffs of 10 % to 20 % on all imported products to the United States. Regarding goods coming from China, rates could reach unprecedented levels, between 60 % and 100 %. According to Steven Mnuchin, former Treasury Secretary under Trump, these measures are necessary because, in his opinion, “China does not respect everything that was signed during the first phase of the trade agreement.” Through the imposition of such taxes, Trump aims to “force Beijing back to the negotiating table” and restore a fairness that his administration considers compromised by what it sees as protectionist Chinese trade practices. Mnuchin clarifies: “we have one-way trade exchanges. Our market is fully open to their trade and investments, theirs is closed.”

The objective of this strategy is twofold. On one hand, it aims to create leverage to compel China to further open its market to American companies, and on the other, it also seeks to finance the tax cuts that Trump intends to implement for American businesses. Indeed, this protectionist policy fits into an economic vision where taxing Chinese imports could, theoretically, allow the United States to recover part of their trade deficit and stimulate domestic industry. However, the effectiveness of such an approach remains debated, as some economists warn of retaliatory effects from China and potential consequences for the American consumer.

An appeal for dialogue and warnings from Beijing

In response to this American offensive, China has reacted with a call for “cooperation”. It has warned against the effects of escalation. For Chinese President Xi Jinping, there would be “no winners in a trade war”, which would risk harming both countries involved, as well as the global economy. Indeed, Beijing is trying to maintain a moderate position and emphasizes that the opening of discussions is preferable to confrontations that could lead to a spiral of measures and reprisals. However, by recalling the difficulties posed by the Covid-19 pandemic that prevented China from fully respecting the terms of the 2020 trade agreement, Beijing is trying to buy time and remains attentive to Washington’s real intentions.

While Trump and his team rely on trade sanctions to create economic pressure, China, for its part, could consider countermeasures. However, Beijing seems to be betting on maintaining communication channels, aware that the fallout from a major trade confrontation could be detrimental to its already slowing economy. The caution displayed by Xi Jinping is also explained by the desire to strengthen ties with other economic partners, such as the European Union, which could find itself in a strategic position amid these tensions.

If this hardening policy continues, the impacts could go beyond a simple Sino-American trade rivalry. Europe may be tempted to strengthen its own trade barriers to protect its market against fluctuations in global tariffs. In this context, American and Chinese companies, for their part, will need to adjust their supply chains and international strategies to meet the new constraints. The outcome of this trade war could also influence the trade policies of other countries, which will have to navigate between the two superpowers to avoid major economic repercussions.