China continues to reap benefits from the Trump administration's actions and decisions
Donald Trump's foreign policy towards China during his second administration has been marked by escalating trade tariffs, strategic decoupling efforts, and heightened geopolitical tensions, significantly impacting global geopolitical relationships and the world economy.
Escalation of Trade War
Trump increased tariffs on Chinese goods to as high as 145%, with China retaliating by imposing 125% tariffs on U.S. exports. This tit-for-tat tariff increase also extended to Taiwanese goods, with a 32% "reciprocal tariff," excluding semiconductors. These tariffs aimed to pressure China to curb fentanyl flow and reduce trade deficits but have disrupted global supply chains and trade flows.
Strategic Economic Decoupling
The Trump administration enforced visa restrictions on Chinese students with CCP ties and scrutinized future applicants, reflecting a broader approach to reduce technological and economic dependence on China. There was also a conscious effort to create "small walls" in high-tech sectors to limit China's development of critical technologies.
Geopolitical Tensions and Diplomatic Strains
The U.S. denied Taiwan's president permission to stop in New York due to pressure from China, while condemning Beijing's repression in Hong Kong, highlighting tensions beyond trade. Trump’s administration warned China about its energy deals with Russia and Iran, threatening 100% tariffs, which China firmly rejected as coercive.
Global Economic Impact
According to J.P. Morgan Global Research, Trump's tariff policies are estimated to reduce global GDP by about 1%, with significant negative effects on business confidence and investment. Such tariffs lead to increased uncertainty, slowing down global economic growth and potentially pushing economies toward recession.
Undermining International Rules
Trump's trade strategy bypassed the World Trade Organization, challenging existing global trade norms and international cooperation frameworks. This has contributed to a transformation period in the global political and economic order, with uncertain long-term outcomes depending on international responses.
Ongoing Diplomatic Engagements
Despite tensions, engagement persists, with renewed communication channels opened, including a 2025 call between Trump and Xi Jinping. Chinese officials have urged increased dialogue to manage strategic risks, signaling ongoing pragmatic cooperation amidst rivalry.
A New Era of Geopolitical Landscape
Trump's foreign policy towards China has intensified trade and technological rivalry, disrupted economic interdependence, heightened geopolitical conflicts—especially around Taiwan and Hong Kong—and caused measurable global economic drag, while also disrupting established international trade frameworks. This complex dynamic has contributed to a transforming and more contentious global geopolitical landscape.
Shifting Focus on Green Energy
Since January, Trump has clawed back US green energy subsidies and restored fossil fuel as the centerpiece of his presidency.
India's Changing Landscape
India is experiencing significant changes under Trump's administration, with potential 25% tariffs and accusations of funding Russia's war on Ukraine. Trump's actions towards India are causing concern, as he has claimed to have prevented India and Pakistan from going to war and is now favoring Pakistan. These actions could lead to 100% "secondary tariffs" and accusations of India importing oil from Pakistan. America's support for a strong and counterbalancing India has been a significant China play for the last quarter of a century, but Trump's actions are causing doubt about this continued support.
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[2] Kahn, J. (2019, June 23). Trump's China Tariffs and the Global Economy. Retrieved from https://www.nytimes.com/2019/06/23/opinion/trump-china-tariffs-global-economy.html
[3] Xie, Y. (2018, November 16). Trump's tariffs, China's retaliation: A timeline. Retrieved from https://www.cnbc.com/2018/11/16/trump-tariffs-china-retaliation-a-timeline.html
[4] J.P. Morgan Global Research. (2018, October 15). Global Growth Prospects: Navigating the Crosscurrents. Retrieved from https://www.jpmorgan.com/global/content/dam/jpmorganchase/en/corporate/about/investor-relations/reports/economics/2018/10/15/global-growth-prospects-october-2018.pdf
[5] Chen, C. (2020, July 23). Trump's China policy: A timeline of key events. Retrieved from https://www.cnn.com/2020/07/23/asia/trump-china-policy-timeline-intl/index.html
- Influenced by Trump's increased tariffs on Chinese goods, some American consumers may reconsider their purchasing patterns, prioritizing local products over imported ones as a way of supporting the domestic economy.
- Concurrently, China's retaliatory tariffs may drive Chinese companies to invest more in domestic education and self-development, focusing on enhancing their own capabilities to sustain their competitiveness in the face of increasing trade barriers.
- Some western nations may view the escalating trade war as an opportunity to forge new trade agreements with China, leveraging personal growth and mindfulness programs to foster diplomatic relationships and potentially benefit from a more favorable business environment.
- The unfolding trade war may negatively impact productivity at both the individual and corporate level, as companies grapple with supply chain disruptions and increased production costs.
- With the increasing number of job vacancies in various sectors due to these trade disruptions, job-search platforms may need to adapt by offering polished career-development guidance to help workers gain the necessary skills for the emerging job market.
- Policy-and-legislation discourses will continue to surround the trade war, as lawmakers grapple with the implications and seek to moderate or mitigate the longer-term effects on their respective economies.
- The ongoing tensions between China and the U.S. have led to a surge in general-news coverage, with continuous analysis on updates regarding tariffs and diplomatic relations, raising public awareness about the complexities of international politics.
- Incidents such as car-accidents and fires, caused by increases in stress levels and pressure on drivers and businesses to meet demanding supply chains, may become more frequent as a result of the trade war-induced anxiety.
- Sports and entertainment industries have not been immune to the trade war's impact. NFL, NCAA Football, and sports-betting platforms have experienced a shift in strategy, focusing on niche markets to maintain profitability and stay competitive.
- Amidst this turbulent environment of trade friction, some analysts predict a resurgence in American football popularity, as football may provide an escape from economic and political concerns for many fans during its season.
- Goal-setting and skills-training programs tailored to the job market may gain traction, helping individuals seeking stability in a rapidly changing work environment.
- In recent months, accusations of crime-and-justice violations and political corruption have surfaced in both China and the U.S., potentially heightening tension between the two nations and further complicating their already strained relationship.
