Rethinking US-China Relations after the Tariffs Shipwreck

TRADE, 26 May 2025

Mike Whitney | Global Research – TRANSCEND Media Service

20 May 2025 – When Donald Trump imposed his sweeping tariffs on 2 Apr, he had two main objectives:

1. Reduce the trade deficits
2. Bring jobs and manufacturing back to the United States

These were the stated goals but, as we soon found out, the real aim was to weaken China by preventing them from selling goods to US consumers. The Trump administration also used the tariffs to isolate China by providing incentives to the nations that agreed to reduce their trade with Beijing. In short, the tariffs were the main weapon in a trade war on a peer competitor who has overtaken the US in nearly every area of industrial and technological production.

Fortunately, Trump’s plan failed, and he was forced to ease the tariffs without achieving any of his main objectives. The reason we say “fortunately” is because the tariffs policy never served the interests of the American people. Quite the contrary, Americans are hurt by unilateral policies that ignore the rules of international trade and needlessly disrupt supply chains. All that does is push prices higher, reduce employment and slow growth. Besides, manipulating tariffs with the intention of destroying a rival violates a number of widely accepted WTO rules that protect the interests of everyone.

In contrast to the US, China acted in a way that was consistent with their broader social philosophy which is rooted in their unique interpretation of socialism. They took the moral high ground, acted on principle, and refused to give in to Trump’s coercion. They only initiated countermeasures in response to Trump’s tariffs blitz that completely ignored the rules articulated in the General Agreement on Tariffs and Trade (GATT) which stipulates that countries cannot arbitrarily exceed “bound rates” or selectively target one country with 145% tariffs. (which is the equivalent of an embargo.) By acting alone, Trump basically showed his contempt for the international system and for any legal constraints on his own power. This is from the Global Times:

The multilateral trading system with the WTO at its core is the cornerstone of international trade and plays an important role in global economic governance. All parties should resolve differences and disputes through equal-footed dialogue under the framework of the WTO, jointly uphold multilateralism and free trade, and promote the stability and smooth functioning of global industrial and supply chains. Global Times

In other words, Trump’s loss was a victory for the system of international trade. But it was also a victory for China because China ‘stuck to its guns’ and refused to bow to Washington’s bullying. Here’s more from Bloomberg:

Xi Jinping’s decision to stand his ground against Donald Trump could hardly have gone any better for the Chinese leader.

After two days of high-stakes talks in Switzerland, trade negotiators from the world’s biggest economies announced Monday a massive de-escalation in tariffs. In a carefully coordinated joint statement, the US slashed duties on Chinese products to 30% from 145% for a 90-day period, while Beijing dropped its levy on most goods to 10%.

The dramatic reduction exceeded expectations in China, and sent the dollar and stocks soaring — providing some much-needed market relief for Trump, who is facing pressure as inflation looks set to speed up at home. Chinese equities also surged. The deal ended up meeting nearly all of Beijing’s core demands. The elevated “reciprocal” tariff for China, which Trump set at 34% on April 2, has been suspended — leaving America’s top rival with the same 10% rate that applies to the UK, a longtime ally….

“This is arguably the best outcome that China could have hoped for — the US backed down,” said Trey McArver, co-founder of research firm Trivium China. “Going forward, this will make the Chinese side confident that they have leverage over the US in any negotiations.” , Swiss Info

Repeat: This is the best outcome that China could have hoped for — the US backed down.”

TO CONTINUE READING Go to Original – globalresearch.ca

Share this article: email mastodon facebook 🔗 copy link

DISCLAIMER: The statements, views and opinions expressed in pieces republished here are solely those of the authors and do not necessarily represent those of TMS. In accordance with title 17 U.S.C. section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. TMS has no affiliation whatsoever with the originator of this article nor is TMS endorsed or sponsored by the originator. “GO TO ORIGINAL” links are provided as a convenience to our readers and allow for verification of authenticity. However, as originating pages are often updated by their originating host sites, the versions posted may not match the versions our readers view when clicking the “GO TO ORIGINAL” links. This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

There are no comments so far.