"Trump vs. China: Why the Trade Clash Is Heating Up and What to Expect"

Donald Trump’s trade war has suddenly come into sharper focus.

What initially appeared to be a broad-based economic offensive against the entire world now looks much more like a targeted confrontation: the United States versus China.

While a 90-day pause on elevated "retaliatory" tariffs has been granted to most countries, a blanket 10% tariff still remains. Yet China, which supplies everything from smartphones to children's toys and makes up roughly 14% of all U.S. imports, has been singled out for a dramatically harsher response—a massive 125% tariff.

Trump explained the move as a response to China’s own retaliatory 84% levy on American goods, which he characterized as a sign of "disrespect." But for a president who built his first campaign on a strong anti-China message, the issue goes far deeper than mere retaliation.

"This is the unfinished business of my first term," Trump told reporters. "We didn’t have the time to do the right thing, which we’re doing now."

His ambition is bold: to dismantle a global trade system long centered around China as the world’s manufacturing hub—and to challenge the long-held belief that increasing trade with China was inherently beneficial.

To understand this shift, it's important to rewind to 2012. At the time, global leaders, economists, and corporate executives widely viewed expanded trade with China as a win-win. It fueled global growth, supplied affordable goods to the world, and helped lift millions of Chinese factory workers into the middle class. Western companies gained access to a vast and growing market, with China soon becoming the world’s largest buyer of luxury cars from brands like Rolls Royce, GM, and Volkswagen.

Beyond the economic rationale, there was also a deeper hope: that greater prosperity would spur political reform in China and accelerate its transition to a consumer-driven economy. Neither outcome fully materialized. The ruling Communist Party only tightened its grip, and China remained heavily reliant on exports while pursuing dominance in key industries.

In 2015, the "Made in China 2025" blueprint laid out a clear ambition—state-led growth in advanced manufacturing sectors like aerospace, shipbuilding, and electric vehicles. A year later, Donald Trump launched his outsider campaign for the presidency, arguing that China’s rise had hollowed out the U.S. economy and left American workers behind.

Trump's first-term trade war disrupted decades of bipartisan consensus, and although President Joe Biden retained many of the tariffs, the impact on China’s economic model has been limited. China now leads the world in electric vehicle production, manufacturing 60% of EVs and 80% of the batteries that power them—largely from homegrown brands.

Now, Trump is back, escalating tensions with a new round of tariffs.

If not for the recent volley of shifting trade measures, this latest move would likely be viewed as one of the most dramatic disruptions ever to the global trading order.

What Comes Next?

Two key questions will shape the path forward.

First: Will China accept Trump’s offer to return to the negotiating table?

Second: If talks begin, will Beijing be willing to make the sweeping concessions Washington is demanding—particularly a reworking of its export-driven economic model?

These questions don’t have easy answers. This is uncharted territory, and anyone claiming to predict China’s next move should be met with skepticism. Still, there are reasons for caution.

China's economic structure—rooted in export strength and protected domestic markets—is now closely tied to its broader national identity and its vision of global leadership. Beijing is unlikely to open up its markets to American tech firms, for example, given its tight control over information and digital infrastructure.

But there’s a third question—and it’s one that the U.S. must answer for itself:

Does America still believe in free trade?

Trump often speaks of tariffs not just as leverage, but as a good in themselves—tools to protect domestic industries, boost investment, reshore supply chains, and raise government revenue.

If China concludes that this is the true purpose of American tariffs, it may see no room for negotiation at all.

Instead of fostering cooperation, the world’s two largest economies could be headed toward a zero-sum contest for global dominance—one that breaks the postwar economic consensus and ushers in a far more uncertain and potentially volatile era.