Donald Trump’s plan to reimpose tariffs on Chinese goods as a central element of his 2024 campaign has reignited debates around his storied trade policy lunacy. While Trump aims to build on one of his signature strategies from his first term, the global economic landscape has shifted significantly, making it unclear whether his approach is even theoretically capable of delivering the results he’s promising, rather than exacerbate the economic challenges the two superpowers are already facing.
To address the question of whether Trump’s tariffs will succeed in 2025, it’s important to revisit the origins of his tariff strategy, which began during his 2016 presidential campaign. During that race, Trump made the U.S.-China trade imbalance a key issue, accusing China of exploiting unfair trade practices, including intellectual property theft and currency manipulation. His narrative—that Chinese competition had cost millions of American jobs —resonated with voters in manufacturing-heavy regions, helping him secure a strong political mandate. Once in office, Trump did eventually, uncharacteristically, get to acting on these promises.
In 2018 and 2019, President Trump imposed tariffs on Chinese goods valued at approximately $550 billion, an unprecedented move which targeted a wide array of products, from high-tech components to everyday household items. In response, China retaliated with tariffs on $185 billion worth of U.S. goods, particularly agricultural products like soybeans and pork, creating turmoil in U.S. farming communities. The immediate effects of these tariffs were mixed. While they offered relief to certain industries competing with Chinese imports—such as U.S. steel producers—other sectors saw steep price increases. American consumers faced higher costs for many products that relied on Chinese manufacturing. It has been revealed that for every job created in industries benefiting from tariffs, consumers paid a staggering cost—estimated at $817,000 per job in some industries. Meanwhile, the average U.S. household saw an increase in annual expenses, with some estimates placing the additional cost at around $831 per year.
The “Phase One” trade deal between the U.S. and China attempted to ease tensions in 2020 which included promises by China to purchase $200 billion in U.S. goods and services but was disrupted by the COVID-19 economic fallout. As the virus forced factory closures, reduced exports and caused supply chain disruptions, China saw its GDP growth slow to 2.3% in 2020, making it the only major economy to post positive growth during the pandemic. China’s economy also rebounded swiftly in 2021, with GDP growth surging to 8.1%. The period highlighted the country’s economic resilience and its role as a crucial trading partner.
Trump's 2024 campaign brings back familiar themes: curb China’s economic power and bring manufacturing jobs back to the U.S. However, there is now a precedent for Trump falling short of delivering the promised economic revival. The global economy today is even more fragile, and the trade interdependence between the U.S. and China is if anything strengthened. The U.S. is China's top trading partner, while China ranks as the U.S.'s second-largest, with a total trade volume of over $664.5 billion in 2023-2024. This means that both countries are likely to suffer significantly from further trade disruptions.
This time, China's economic landscape is also quite different. China has already demonstrated an ability to adapt its economy even in extreme circumstances, such as the pandemic. It also has a range of retaliatory measures at its disposal, something the U.S. has already been warned about, the most important being its dominant position in the global supply chain. The U.S. could easily be denied access to critical resources, such as rare earths and lithium, which are incredibly important to a panoply of modern industries. China dominates the global production of these minerals, while the U.S. doesn’t even rank in the top seven.
However, China's current economic slowdown leaves it less resilient to external shocks compared to 2018 as the country is facing significant internal pressures. Its property sector has been in crisis, highlighted by the collapse of major developers, such as Evergrande, while weak domestic demand and lower exports—though there has been a recent surge—have further dampened economic momentum. The IMF also recently downgraded China’s GDP growth forecast to below 5%, reflecting these vulnerabilities and signalling a more uncertain outlook for the country.
The success of Trump's tariff strategy will ultimately depend on whether it evolves into a sustainable economic policy or remains a political tool. With the U.S. and Chinese economies so deeply intertwined, the risks and possible consequences of a trade war are high. In the end, we can be sure that the next four years will be marked by ongoing uncertainty as both nations navigate the intricate terrain of trade and political manoeuvring.
Image: Flickr/Trump White House (Shealah Craighead)
Image changes made: c. 60% of right side of image cropped, occluding children waving.
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