Trump’s Tariff Blitz Escalates US-China Tensions
Donald Trump has ignited a new phase of economic warfare. His latest tariff hike on Chinese imports has soared to 104%, up from the existing 25% he imposed in his first term. This move has left analysts, economists, and policymakers reeling.
Most Chinese exports to the US will now struggle to remain viable, pushing the trade relationship towards collapse. Arthur Kroeber, an American economist based in Beijing, said bluntly:
“In essence, this means that Trump is committed to ending US trade with China.”
Shi Yihong, an adviser to China’s State Council, echoed the sentiment, predicting that trade between the two nations would be “mostly destroyed.”
An Economic Act of War?
With tariffs this high, experts say the impact mirrors a trade embargo. Economist Xu Tianchen of the Economist Intelligence Unit explained:
“It doesn’t matter if it goes up by 50 per cent or 500 per cent.”
China has yet to retaliate, but Beijing has vowed to “fight to the end.” The stakes have never been higher.
History’s Warning: A Parallel to 1941?
Some analysts see an ominous parallel between Trump’s move and the US oil embargo on Japan in 1941. That embargo pushed Japan towards war, culminating in the attack on Pearl Harbor.
While today’s circumstances are different, the lesson remains: trade wars can spiral into larger conflicts.
Trump has cited China’s role in the fentanyl crisis as a key reason for his crackdown. He accuses Beijing of allowing the mass export of the drug, likening it to a reverse Opium War.
China has made some efforts to curb fentanyl trade, but recent online discussions suggest Beijing may withdraw these measures. If that happens, tensions could escalate further.
Markets Spiral as Tariffs Take Effect
Financial markets reacted instantly to the tariff shock.
Asian stock markets tumbled:
- Japan’s Nikkei 225 fell 5%
- Hong Kong’s Hang Seng Index dropped 2%
- Australia’s S&P/ASX 200 lost 1.8%
Even the US market saw a sharp downturn, with fears of a global recession mounting.
Trump: “We Are Waiting for Their Call”
Despite the economic chaos, Trump remains defiant. On his social media platform, Truth Social, he claimed:
“China also wants to make a deal, badly, but they don’t know how to get it started. We are waiting for their call. It will happen!”
However, China has made no indication of surrendering to US pressure. Foreign Ministry spokesman Lin Jian stated:
“If the US is determined to fight a tariff and a trade war, China’s response will continue to the end.”
Meanwhile, state media reported that Beijing had released a White Paper on US-China trade relations, leaving the door open for negotiations.
Global Trade Disrupted
Trump’s tariffs extend far beyond China. He has slapped heavy duties on 60 nations, calling them the “worst offenders” for running trade surpluses with the US.
Among the hardest hit:
- Cambodia (49% tariffs)
- Vietnam (46%)
- South Korea (26%)
- Japan (24%)
- European Union (20%)
While some countries are seeking exemptions, Trump dismissed their concerns at a Republican fundraiser:
“I’m telling you, these countries are calling us up, kissing my ass. They are. They’re dying to make a deal.”
Oil Prices Plummet to 4-Year Lows
The trade war has sent oil prices tumbling. Brent crude dropped to $61.43 per barrel, while US WTI crude fell to $58.08—the lowest levels since February 2021.
The decline reflects fears that a prolonged US-China trade war will crush global fuel demand. Ye Lin, a vice president at Rystad Energy, warned:
“China’s 50,000 bpd to 100,000 bpd of oil demand growth is at risk if the trade war continues.”
Meanwhile, OPEC+ recently announced an increase in production, further pushing oil prices downward. Goldman Sachs now predicts Brent crude could fall to $62 per barrel by December 2025 and $55 by 2026.
What Happens Next?
Trump’s latest tariffs have set the stage for an economic confrontation with no clear resolution in sight. China is expected to retaliate, but its strategy remains uncertain.
If history is any guide, the longer this trade war drags on, the greater the global economic fallout. What began as a tariff dispute could reshape the world economy—or worse.
