Predicting who will 'win' in the trade war between China and the U.S. is very complex, as the outcome depends on numerous economic, political, and strategic factors, and no side can truly win absolutely without suffering losses. Below is a brief analysis of both sides' positions:
U.S.:
Advantages:
The largest consumer market control in the world, a key destination for Chinese exports.
High tariffs (e.g., 145% recently) put significant pressure on China, which has a trade surplus of about 300 billion USD with the U.S.
Negotiating tax reductions with many other countries, isolating China in trade.
Protectionist policies help boost domestic production, though long-term effectiveness is still debated.
Challenges:
American consumers are facing rising prices due to tariffs, impacting inflation and purchasing power.
American agriculture, especially soybeans, is vulnerable to Chinese retaliation measures.
Global supply chains are disrupted, causing damage to American businesses that rely on Chinese components.
China:
Advantages:
Better prepared than in the 2018 trade war, with a diversified trade network, reducing dependence on the U.S. (exports to the U.S. dropped from 19% in 2017 to below 15% last year).
Low production cost advantage (labor ~12 USD/hour compared to 30 USD/hour in the U.S.) and strong logistical infrastructure.
Strengthen cooperation with Europe and Southeast Asia to offset damage from the U.S.
The ability to retaliate targeting U.S. weaknesses, such as agricultural products or rare minerals.
Challenges:
A weak domestic economy, with a real estate crisis and public debt, limits the ability to withstand tariff pressures.
High tariffs from the U.S. (up to 145%) reduce the competitiveness of Chinese goods in the U.S. market.
Domestic political pressure forces a hardline stance, limiting the ability to make concessions.
Conclusion:
No side completely wins. The U.S. has the advantage in economic pressure and market leverage, but China has the ability to adapt and retaliate strategically. Both suffer losses: the U.S. faces inflation and supply chain disruptions, while China faces pressure on exports and economic growth. The current trade war (as of April 2025) is escalating with no clear signs of an agreement, and the negative impacts are spreading globally. If prolonged, both sides may be forced to negotiate to ease tensions, as history has shown after 2018.
Personal opinion: I lean towards the idea that neither side truly 'wins', as trade wars often lead to greater collective losses than individual gains. China may endure longer due to strategic resilience, but the U.S. has a short-term advantage thanks to market power. What do you think about this scenario?
