The US-China Trade War

By Nikola Mikovic

Editor’s note: The opinions expressed here are those of the authors. View more opinion on ScoonTV

The United States President Donald Trump’s decision to impose draconian tariffs on Chinese goods could lead to a complete transformation of the global economy. Meanwhile, both Washington and Beijing are expected to suffer from the ongoing trade war. But is China truly prepared for a long-term economic confrontation with the world’s only superpower?

Some of the countries that Trump targeted in his trade war are already waving white flags and are ready to make deals on terms favorable to the United States. According to the American leader, more than 75 nations had called US federal officials to negotiate a solution, and had not retaliated. Except for China.

Beijing has repeatedly pushed back on Trump’s tariff policies by hiking its own levies on US imports. So far, China has shown no intention of backing down. But does the People’s Republic have the capacity to sustain a prolonged trade war with the United States?

“I do not believe China’s economy will suffer as significantly as some anti-China advocates might hope, primarily because its economy is robust, advanced, and supported by a strong middle class,” Dr. Tugrul Keskin, Associate Professor and a member of the Center for Turkish Studies and Center for Global Studies at Shanghai University, told Scoon TV.

The issue, as he sees it, is not specifically about China or other countries, but rather about America’s economic adaptation within a changing global economic landscape characterized by China’s ascendance.

The United States is attempting to reshape the international order based on its national security interests, primarily aimed at revitalizing the American economy. Although the US established the post-World War II international order based on Cold War strategies, the Trump administration strongly believes – and rightly so – that this old system no longer serves American interests. Other countries have disproportionately benefited from the current system at the expense of the US middle class.

Dr. Keskin explains, pointing out that the United States and China need to find ways to coexist and navigate the complexities of today’s global political and economic landscape.

Waiting for US-China Talks 

While certain scholars, journalists, and policymakers adopt anti-China or anti-US stances, there remains a significant group advocating for cooperation between these two major world powers. Dr. Tugrul Keskin appears to be one of them. On the other hand, Stephen Miller, Deputy Chief of Staff for Policy and Homeland Security, believes that China will be forced, very soon, “to come to the table for the simple reason that its economy is completely dependent on its exports to the United States and to the West.”

Although Beijing’s current economic position—the world’s second-largest economy—allows it to engage in a trade war with the United States with a fair degree of confidence, it would undoubtedly prefer to reach an agreement with Washington, but not at any cost.

It is unlikely that China will fully retreat in the face of American pressure, especially on matters closely tied to its national sovereignty and long-term strategic interests.

Dr. Habib Al-Badawi, a professor at Lebanese University and an expert in international relations, told Scoon TV in an interview.

In his view, while expressing a willingness to negotiate, particularly to preserve economic stability, Beijing has simultaneously diversified its trade partnerships, accelerated efforts toward technological and industrial self-reliance, and employed retaliatory tariffs to assert its position.

“This dual-track strategy of engagement and resistance indicates that Beijing seeks to avoid prolonged economic disruption while safeguarding its geopolitical standing and avoiding perceptions of weakness,” Dr. Al-Badawi stressed.

Trump seems to share at least some aspects of this strategy. Lifting tariffs without achieving a clear result would represent an obvious defeat for his policy. On the other hand, persisting in a “war of attrition” with the Chinese economy carries serious risks and costs for the United States itself.

If Trump’s strategy proves successful, it could lead to a more diversified and revitalized US economy, ultimately benefiting US-China relations as well.

Dr. Tugrul Keskin argues, emphasizing that the Trump administration’s tariff policies indicate the emergence of a new world order.

According to Dr. Andrey Gubin, Associate Professor of the Department of International Relations of the Eastern Institute of Russia’s Far Eastern Federal University in Vladivostok, the way forward lies in the possibility of direct Sino-American talks at the earliest opportunity, not only on economic issues but also on global governance.

Although Trump is reportedly ready to strike a deal with China, reports suggest that he is unlikely to reach out to Beijing first. That is why, for the foreseeable future, the two nations will remain engaged in a tariff war, with China continuing to withdraw funds from US debt obligations and redirecting its economic focus elsewhere.

“An official Chinese source informed me that the People’s Bank of China had announced the full integration of its cross-border settlement system for the digital yuan with the ten ASEAN member states, as well as six additional countries in the Global South. This bold move represents a significant shift in the global financial landscape, as the digital yuan increasingly challenges the SWIFT system, currently dominated by the US dollar, Dr. Al-Badawi stressed.

From his perspective, while facing short-term pain from tariffs, Beijing gains diplomatic openings to position itself as a “defender of global trade norms against American unilateralism.”

“The irony is that China’s economic ascendance was facilitated by the very system America is now abandoning. Having mastered the rules of liberal trade, China now stands prepared to reshape them and benefit strategically from American trade belligerence. Retaliatory tariffs represent only the most visible element of Beijing’s strategy. Less apparent but potentially more consequential is China’s accelerated push toward economic self-sufficiency in critical sectors and diversification of its export markets,” he concluded.

Who Benefits from the US-China Tariff War?

As Dr. Andrey Gubin points out, China is steadily increasing the share of non-Western nations in its foreign trade. He estimates that ASEAN members – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam – will collectively contribute nearly one trillion dollars in their trade with the People’s Republic. The trade turnover between Arab states and China is anticipated to exceed $400 billion, while Russia is projected to reach up to $245 billion.

Dr. Gubin told Scoon TV in an interview,

It seems that some countries could truly benefit from reforming China’s trade and investment framework, gaining additional market share and subsidies to reach sustainable development goals under the UN Agenda 2030. However, some also face challenges, including increased dependence on China.

Dr. Habib Al-Badawi appears to share some of these views. As he sees it, Trump’s tariffs may accelerate rather than impede China’s global economic influence by pushing Beijing to intensify its economic diplomacy beyond traditional Western markets.

The problem, however, is that when elephants fight, it is the grass that suffers. Although the United States and China, at least in the short term, are expected to suffer economic losses as a result of their trade war, it will also harm other countries’ economies in the form of slower global growth.

One thing is for sure: until a new economic world order emerges, tariff wars, sanctions, and various forms of trade restrictions are expected to remain the norm.

Curtis Scoon is the founder of ScoonTv.com Download the ScoonTv App to join our weekly livestream every Tuesday @ 8pm EST!