Mikita Kuczyński, Medusa: What is the trade confrontation between the US and China? What's the fight about?
Temur Umarow: It is part of an economic, political and strategical confrontation between China and the United States. The conflict entered an active phase during Trump's first word in 2016, although it had grown earlier. Already under George W. Bush Jr., as well as Barack Obama the United States observed that China is rapidly developing and could possibly take over the function of the major planet power. Since the Americans realized it, they've taken steps to prevent it.
For now, we are talking about an economical confrontation. Its main tool became customs — those imposed on China can increase up to 245 percent. However, this does not mean that everything will be limited to them: both the US and China have another tools. The question is how far Trump can go to harm not only the American economy, but besides the global economy.
How did the trade war that began during the first Trump administration affect the economies of both countries?
Trump has not achieved its main objectives. He failed to align neither the trade balance with China nor importantly increase Chinese imports of American goods. At the end of the first trade agreement, Beijing promised to buy US products worth $200 billion (PLN 7.52 billion). However, in 2020, pandemics and contracts were fundamentally no longer in force.
The main effect of the first wave of duties and confrontations between China and the US was not even economical damage. Looking forward to justice in relations with Beijing, Washington resigned from global law instruments.
Under Obama, increased trade and cooperation with China remained a priority. At the same time, however, his administration questioned their actions by referring to the planet Trade Organisation (WTO). At the time, Chinese producers were dumping heavy on the US marketplace and selling their products at highly low prices. Given the immense difference in labour costs, competing with China was simply impossible for Americans. Nevertheless, the United States did not straight impose sanctions or duties, but China's unfair practices wanted to fight through legal tools.
Trump abandoned the adopted global mechanisms — under his regulation the United States is doing what they feel is appropriate. The first trade war did not seriously harm the economies of any of the countries, alternatively the pandemic struck a major blow.
Is it just economical or strategical to face China?
Over time, it became clear to the US authorities that China would not stand still. They actively developed, adopted advanced technologies and produced them themselves. The only question was erstwhile China would cease to be dependent on US imports. American elites saw this phenomenon, but for a long time no 1 dared to take extremist steps. In the end, Donald Trump did this, driving us into a large geopolitical spectacle — he is the main hero in it, and we are the spectators and participants, forced to conform to his principles.
It is in the interest of China to keep the current state of affairs. Their economical success was possible thanks to the existence of a global economy in which they fit into the existing production chains as effectively as possible, becoming the “major mill of the world”. Without it ‘Chinese economical miracle’ It wouldn't be possible. China is so curious in maintaining the global model in its current form.
At the same time, the US does not like the fact that China's importance in the global strategy is growing. Although they originally wanted to, most American corporations themselves moved production to China to reduce costs and increase profits on the global market. It seemed to be a perfect tandem.
However, it shortly became apparent that high-tech companies were emerging in China, which had to be competed with. What concerns the United States in this improvement is not only the growth of the civilian sector, but besides the fact that these technologies are moving to the military sphere, strengthening China's strategical capabilities.
How painful are Donald Trump's actions for China?
They are as painful for China as they are for the United States. As Xi Jinping said, no 1 wins in trade wars.
As far as the United States is concerned, the emergence in customs duties will first consequence in the failure of consumers there. They are dependent on inexpensive everyday goods. erstwhile tariffs are increased to 245 percent, trade with China will simply be pointless, due to the fact that the cost of goods will automatically increase — on average twice. Nobody's gonna buy anything with that kind of money, so export's gonna lose sense, too.
Minh Hoang / POOL / AFPXi Jinping in Hanoi, Vietnam, April 14, 2025.
W China will endure little due to the fact that they are practically independent of American goods. Customs will hit manufacturers in the technological and device sectors. The agricultural sector, in peculiar the import of soya and maize from the USA, will besides endure heavily. Farmers and the agricultural sector in the US will besides endure as a consequence.
Of course, there will be many companies and factories in both the US and China looking for another outlets. In practice, however, this will be highly hard due to the quantity of products. Before the first trade war with Trump, China's dependence on US imports was around 19%. Although it has now fallen to 15%, it is inactive immense — we are talking about hundreds of billions of dollars.
Trump released from fresh duties smartphones and computers. Why this category?
Neither Apple nor Google make their products in the US. American companies own intellectual rights, but No iPhone is mounted in 1 country. seemingly smartphones and another electronic devices were excluded from the list simply due to the fact that the dependence of the US on China in this manufacture is besides large. The consumer would not forgive the surge in prices.
In consequence to US duties, China suspended exports of certain uncommon earth metals. How much will this decision affect the American industry?
It should be stressed that China has not imposed export controls on all uncommon earth metals, but only on any of them. They act very selectively, making it clear to Washington that do not usage the full arsenal of available tools and have even more in store. And that they want to make a space for dialogue.
Currently, to export uncommon earth metals to the US, the company must get a peculiar licence and prove that these metals will not be utilized for the purposes that China considers undesirable. Above all, the U.S. military and space sector, the infrastructure essential to keep the image of the U.S. as a large power, will suffer.
China has not yet imposed restrictions on another wider scope of uncommon earth metals. If they had decided to do so, the consequences of this would be tremendous — it could be a complete collapse of many industries worldwide. Given that China is the largest maker and exporter of uncommon earth metals, the impact of specified measures on the planet manufacture is hard to overestimate.
What another assets do China have in the trade war, and how can the United States respond to their use?
Both countries have leverage. Trump has been limited to customs so far — he inactive raises them, although there is no applicable point. Rather, it is simply a diplomatic signal — to show that you are awesome and can lift tariffs forever.
However, the U.S. has another tools, specified as sanctions that they actively usage against Russia and another countries. They can besides usage them against China, the more they would find it easy to find a pretext. They could, for example, justify this decision by supporting Vladimir Putinov in his war against Ukraine. Although it seems to me that the current U.S. administration does not request any reason, it can impose sanctions just as it pleases.
Other criminal measures include: disengagement from the SWIFT system, disconnection of Chinese financial infrastructure from the dollar, placing Chinese entities on banned lists, individual sanctions, asset frost and exclusion of Chinese companies from stock exchanges.
Mandel Ngan / AFPDonald Trump, Washington, April 18, 2025.
China can besides impose sanctions, but unlike the United States, there are not so many loyal allies. It is so improbable that specified sanctions will be supported by another countries. Beijing can number on Russia to do so, but that will limit the presence of American companies in the world.
However, Beijing has another tools. China has a immense number of US companies, for which the country is the most crucial market. These include Apple, Tesla and Google. Although many Google tools are blocked in China, the company is inactive there and promotes its products. There are besides many another companies that, although not on the radar of the authorities, are heavy dependent on the Chinese market.
China has already shown what they can do with abroad companies. A fewer years ago, they adopted a law akin to the Russian law on undesirable organizations, only it is directed against corporations. Companies on this list are subject to additional audits, their business is checked for compliance with law and another regulations. This creates a immense number of problems for them, forcing them to either reduce their turnover or fundamentally leave the Chinese market.
There is another example of the dependence of American companies on the Chinese market. A major popularity in China enjoys basketball, in peculiar the National Basketball Association, which is in fact very dependent on broadcast on the Chinese market. In 2019, the club's manager endorsed The protests that broke out in Hong Kong. In response, the authorities stopped broadcasts of almost all basketball games, and Chinese companies ceased to sponsor the league. It was only after respective years of major losses that NBA returned to the air in China.
It's like Hollywood. The movie manufacture wants any films to hit the Chinese market. An example is the movie “Big Wall” which was created exclusively for the Chinese market. He failed everywhere else, but paid off thanks to the cashier's success in China.
However, the most crucial economical weapons of the Chinese are American treasury bonds, which they have been actively buying for a decade. If they decide to rapidly dispose of them — and thus lower the value of American securities — it will have disastrous consequences not only for the US but for the full world.
How can a trade deadlock between the US and China affect negotiations on another delicate issues, specified as the TikTok regulations or the fight against fentanyl?
These are 2 key issues that China negotiated with the US as early as Biden. Now, given the fresh aspects of Chinese-American relations, it is unclear what Washington can agree to.
TikTok was blocked by the U.S. legislature decision. Then it turned out that there might be a way out of this situation if, for example, the app developers sale any of it to an American company, or if they meet certain conditions: for example, they invest money in the US. The situation is presently suspended.
Initially, Trump, during his first term, advocated blocking TikTok. The same communicative was accepted by the Biden administration and blocked the application. When Trump returned to power, however, he unlocked it. This shows how inconsistent he is.
The same applies to fentanyl. Joe Biden and Xi Jinping reached an agreement on China's introduction of additional controls on its production and exports. They can now, however, and even encourage the dispatch of the substance to the United States, given that it has ceased to apply any rules in principle. Everybody does what they want.
What concessions could China theoretically make in the trade war?
That's the main problem. During the first trade war, it seemed that Trump wanted to reconstruct the balance of trade. China has so entered into negotiations and understood what they can accomplish by consensus which goods can more actively buy from the US. Everything seemed simple.
Now you absolutely don't know what Trump wants. It is not known whether the duties he imposed on China are the continuation of the First Trade War or whether the a fresh trade war against the full world. So far, China does not realize what is happening and what Trump wants, and without that understanding, it is hard to negociate anything. Therefore, Beijing cannot make any concessions for now.
In April, Marco Rubio met representatives of Japan and South Korea in Brussels and said that there was a request for common opposition to Chinese aggression. The following day, the United States imposed duties on all countries: not only China, but besides Japan, South Korea and Taiwan. What are the US's goals for this region?
There is absolutely no strategical thought on the American side. The most crucial thing the United States has shown by imposing duties on all is unpredictability — and that Washington cannot be relied on. Even his closest allies found this.
China and the USA have found themselves in a alternatively unusual situation. Japan and South Korea first wanted to talk personally with Donald Trump and scope an agreement. However, they did not receive any indication of what they could do to abolish the duties imposed on them, so they stay suspended. However, I would not say that they immediately rushed into negotiations with China. Everyone is inactive trying to realize and measure the consequences of the confrontation between China and the US.
However, there are countries in Asia — specified as Vietnam and Singapore — that are different. Xi Jinping is on his way to Southeast Asia. He first arrived in Vietnam, where the head of state welcomed him on the airport plate. It was akin in Singapore. This is an unorthodox practice — this is not how frequently the leaders of the states are accepted. The talks the leaders made besides afraid economical cooperation. During the first trade war, China utilized these countries to circumvent customs duties. But now it seems that this does not make sense, due to the fact that restrictions have been imposed on everyone.
Can Europe get closer to China in this context?
The EU will be the first marketplace for China to shift part of its production after the US has closed. However, Europe is in a hard situation. The EU is afraid that it will be "drained" by a fresh wave of Chinese goods, which is why it is trying to negociate – firstly in its own European group and secondly with China itself. shortly Ursula von der Leyen has to meet Xi Jinping. any European leaders besides announced negotiations with him.
It is crucial that the EU understands what policy it should have towards China. While the EU and US Trump were on the same side of the barricades before their return and acted almost identically, now their paths have split.
How can trade war affect smaller countries bordering China?
There's no way to foretell all its consequences. Russia and the countries of Central Asia will undoubtedly feel the consequences of this trade war — but not necessarily negative. They can benefit from it in any way.
For example, during the erstwhile trade war Uzbekistan first began to supply China with immense amounts of fruit. The same can happen to Russia, its agricultural products, oil and gas. If China refuses these goods now, after the imposition of duties Russia will be able to partially replace the gap in China's trade balance.
