Once upon a time, people harbored high hopes for post-Mao China.[1]  The country adopted “market socialism,” invited Western capital and experts to facilitate its transition to participant in the global economy, and sent many of its own best and brightest to study and work in Western countries.  Employing a very simplified understanding of the West’s own history, people conjectured that a market economy would grow, enrich, and make assertive a middle class that would insist upon a more responsive government.  China would “Westernize.” 

            To accelerate this process, in 2001, China won admission to the World Trade Organization (W.T.O, successor to the General Agreement on Tariffs and Trade, G.A.T.T).  “It did not have the effect that Long Shanks planned.”[2]  Instead, for ten years, cheap Chinese goods deluged foreign markets.  In the United States, 2.4 million jobs were lost, a million of them factory jobs.  All this happened between 2001 and 2011, and it kept happening at a slower pace afterward.  In 2019, China earned a trade surplus with the rest of the world of more than $500 billion.  Nobody did anything about it.  Why not?  Well, the price of many consumer goods fell.  Consumption increased for many people.  The number of service jobs increased, so lots of people weren’t working in factories, “dark, satanic” or otherwise.  “We’re doing better, right?”[3] 

            Since 2020, China has pursued a major export offensive on top of this already large volume of exports.  It has done so by subsidizing manufacturers of its already low-cost products to the tune of $1.9 trillion over four years. 

In one sense, the offensive has succeeded: in 2024 it earned a surplus of almost $1 trillion.  Since 2013, China has deployed much of its new-found wealth to entangle other counties in a complicated relationship that makes tariff retaliation against China difficult.[4]

In another sense, the offensive has failed: it has aroused international alarm and resistance.  Beyond the United States, the affected industries range from Indonesian textile factories to the German auto industry.  The first phase of the counter-attack against China’s trade offensive appeared in President Donald Trump’s first term with tariffs on China.  These were retained by the Biden administration.  The Chinese responded by moving some of its production “off-shore’ to other countries like Vietnam and Thailand, Turkey and Hungary, and—of course—Mexico.[5]  Trump’s second term began with new and gigantic tariffs on China, but also on many other countries. 

The American tariffs close off an estimated $400 billion in sales to the American market.  If China can’t cut back production, those goods will have to go elsewhere.  Other countries have begun to follow Trump’s lead.  They are hampered by those previously-established economic relationships with China. 

            Trump’s tariff barrage is best understood not as the start of a “Trade War.”  It’s best understood as a counter-attack in a trade war that has already been going on.  It’s a trade war which the United States and many other countries have been losing.  Through not fighting back. 

---

[1] “China Shock 2.0” The Week, 25 April 2025, p. 11. 

[2] Reference to another Mel Gibson historical wish-it-had-been-this-way mess. 

[3] To belabor the obvious, both the job losses and the failure of solidarity eventually had large political effects. 

[4] See: Belt and Road Initiative – Wikipedia 

[5] See: How Chinese firms are using Mexico as a backdoor to the US