BY UNITED PERSPECTIVES
In recent years, the trade war between the United States and China has dominated headlines, sparking debates about economic policies, tariffs, and global supply chains. While much of the public discourse focuses on trade deficits and market access, many experts argue that this conflict is not merely about commerce—it’s part of a broader geopolitical struggle. At its core, the US-China trade war reflects Washington's attempt to curb Beijing's rising power and influence on the world stage.
A Clash of Titans: Economic Powerhouses at Odds
To understand why the trade war goes beyond economics, we must first examine the scale of China's rise. Over the past four decades, China has transformed itself from an agrarian economy into a global manufacturing powerhouse. According to data from the World Bank, China’s GDP grew by over 900% between 1990 and 2020, making it the second-largest economy in the world after the United States. By comparison, during the same period, the US economy expanded by roughly 300%.This rapid ascent has been fueled by strategic investments in technology, infrastructure, and education, as well as aggressive industrial policies like "Made in China 2025," which aims to make China self-reliant in high-tech industries such as artificial intelligence (AI), robotics, and semiconductors. These ambitions have put China on a collision course with the US, which views these developments as threats to its technological dominance and national security.
The Strategic Dimension: Containing Chinese Influence
While the Trump administration initiated the trade war in 2018 under the banner of reducing America's trade deficit with China, it quickly became clear that the underlying motivations were far more complex. For one, the US imposed tariffs not just on consumer goods but also on critical sectors like telecommunications equipment and advanced electronics—areas where China seeks to lead globally.One prominent example is Huawei, the Chinese tech giant that has become a symbol of this rivalry. In 2019, the US placed Huawei on its Entity List, effectively banning American companies from doing business with it unless they obtained special licenses. This move was framed as a response to concerns about espionage and cybersecurity risks, but critics argue it was also aimed at stifling Huawei’s ability to compete internationally, particularly in 5G network development.
Moreover, the Biden administration has continued and even escalated these efforts. In October 2022, the US Department of Commerce announced sweeping export controls targeting China’s semiconductor industry. These measures restrict the sale of advanced chips and chipmaking tools to Chinese firms, effectively cutting off their access to cutting-edge technologies needed for AI and military applications. Such actions underscore the strategic intent behind the trade war: to slow down China’s technological progress and limit its capacity to project power abroad.
Geopolitical Implications: Reducing China’s Global Footprint
Beyond economic competition, the US-China trade war is deeply intertwined with geopolitical considerations. As China expands its footprint through initiatives like the Belt and Road Initiative (BRI)—a massive infrastructure project spanning Asia, Africa, and Europe—the US sees an urgent need to counterbalance Beijing’s growing influence.For instance, the BRI has provided billions of dollars in loans and investments to developing countries, enabling China to forge stronger diplomatic ties and secure key resources. However, critics accuse Beijing of engaging in “debt-trap diplomacy,” whereby recipient nations become overly reliant on Chinese financing and are forced to cede control of strategic assets when unable to repay debts. Sri Lanka’s Hambantota Port, leased to a Chinese state-owned company in 2017, is often cited as a cautionary tale.
In response, the US and its allies have launched alternative programs to offer developing nations viable alternatives to Chinese funding. One notable effort is the Build Back Better World (B3W) initiative, unveiled by the G7 in 2021. Although still in its infancy, B3W represents a concerted effort to challenge China’s narrative of being the primary benefactor for global development.
Impact on China’s Imports, Economy, and Defense Power
The trade war has had significant implications for China’s imports, economy, and defense capabilities. Here’s how:
1. Disruption of Imports and Supply Chains
China’s reliance on foreign technology, particularly semiconductors, has made it vulnerable to US export restrictions. Semiconductors are the backbone of modern technology, powering everything from smartphones to fighter jets. By restricting access to advanced chips and semiconductor manufacturing equipment, the US has effectively slowed China’s ability to innovate in key industries like AI, quantum computing, and autonomous systems.According to a report by the Semiconductor Industry Association, China accounted for nearly 60% of global semiconductor consumption in 2021. However, domestic production only met about 16% of demand, leaving the country heavily dependent on imports. With US sanctions tightening, Chinese firms are scrambling to develop homegrown alternatives, but this transition will take years—and billions of dollars—to achieve.
The disruption of imports has also affected other sectors. For example, Boeing, one of America’s largest exporters, saw a sharp decline in aircraft sales to Chinese airlines due to retaliatory tariffs. Similarly, China’s automotive industry, which relies on imported components, has faced delays and increased costs.
2. Economic Slowdown and Domestic Challenges
The trade war has contributed to slower economic growth in China. Before the pandemic, China’s economy was already showing signs of strain due to structural issues like high debt levels, an aging population, and declining productivity. The imposition of tariffs and export controls exacerbated these challenges, leading to reduced exports, lower investor confidence, and sluggish manufacturing activity.In 2022, China’s GDP growth rate fell to 3%, its lowest level in decades, according to official statistics. While some of this slowdown can be attributed to strict COVID-19 lockdowns, the long-term impact of the trade war cannot be ignored. Analysts predict that if the conflict persists, China could face further downward pressure on its economy, potentially undermining its goal of achieving “common prosperity” domestically.
3. Impact on Defense Capabilities
Perhaps the most significant consequence of the trade war is its effect on China’s defense capabilities. Advanced military systems increasingly rely on cutting-edge technologies, many of which depend on sophisticated semiconductors. By limiting China’s access to these components, the US hopes to weaken Beijing’s ability to modernize its armed forces.For instance, China’s ambitious plans to develop hypersonic missiles, stealth fighters, and unmanned aerial vehicles require highly specialized chips that are now harder to acquire. This bottleneck could delay or derail key projects within the People’s Liberation Army (PLA). Moreover, restrictions on software and design tools used in aerospace and defense manufacturing have forced Chinese firms to invest heavily in indigenous solutions—a process that is both time-consuming and costly.
At the same time, China has accelerated efforts to reduce its dependence on foreign suppliers. The government has poured billions into domestic semiconductor research and development, while state-backed companies like SMIC (Semiconductor Manufacturing International Corporation) are racing to close the technological gap with Western rivals. However, experts warn that even with substantial investment, catching up to leaders like TSMC (Taiwan Semiconductor Manufacturing Company) and Intel may take a decade or more.
The Human Cost: Workers and Consumers Caught in the Crossfire
While the geopolitical dimensions of the trade war are undeniable, it’s important to acknowledge the human toll. Tariffs and export restrictions have disrupted supply chains, increased costs for businesses, and led to job losses in both countries. Farmers in the American Midwest, who once relied heavily on exports to China, found themselves struggling as retaliatory tariffs slashed demand for soybeans and other agricultural products. Meanwhile, Chinese manufacturers faced shrinking orders amid declining consumer confidence in Western markets.Consumers haven’t escaped unscathed either. Higher prices for imported goods—from electronics to clothing—have strained household budgets, exacerbating inflationary pressures. According to a study by economists at the Federal Reserve Bank of New York, the trade war cost American households an average of $1,277 annually in lost income due to higher prices and reduced purchasing power.
Looking Ahead: Can Cooperation Replace Conflict?
Despite the adversarial nature of the trade war, there remains hope for cooperation. Both the US and China recognize the mutual benefits of maintaining stable economic relations, especially given the interconnectedness of their economies. In November 2022, Presidents Joe Biden and Xi Jinping held a face-to-face meeting during the G20 summit in Bali, signaling a willingness to de-escalate tensions. They agreed to resume dialogue on issues ranging from climate change to food security, offering a glimmer of optimism amidst the turmoil.However, any meaningful resolution will require addressing the root causes of mistrust. For the US, this means protecting its technological edge without resorting to protectionism. For China, it entails demonstrating greater transparency in its trade practices and foreign policy objectives. Bridging these gaps won’t be easy, but history shows collaboration can yield dividends—even among rivals.
Conclusion: More Than Just Numbers
At its heart, the US-China trade war is about more than tariffs and trade balances; it’s about two superpowers vying for supremacy in a rapidly changing world. The stakes are enormous—not only for the economies of the US and China but also for the billions of people whose lives are shaped by their decisions.As the battle unfolds, policymakers must remember that economic warfare carries real-world consequences. While safeguarding national interests is crucial, so too is fostering an environment where innovation thrives, prosperity spreads, and peace endures. After all, the ultimate measure of success isn’t how many battles are won—but whether humanity emerges stronger in the long run.
