Americans have come to depend on cheap Chinese products.  Conversely, China has come to depend on massive exports of its goods to the United States.  Hence, President Donald Trump’s imposition of a 145 percent tariff on imports from China will shock both the American and Chinese systems.[1] 

            What does the United States get from China?  At least 75 percent of electric fans, dolls, video game consoles, tricycles, food processors, and smart phones.[2]  Apple, Dell, and Hewlett-Packard all source many of their products from Asia (China, Taiwan).  The tariffs could push the price of a basic iPhone 16 from $799 to $1,140.[3]  China also produces and exports renewable energy equipment, lithium batteries, and electric vehicles. 

            Much of the American reaction to the trade war with China has been “Eeeek!”  One newspaper warned  of “an economic crisis that could leave America poorer for generations.”  A West Coast port executive said that “essentially all shipments out of China for major retailers and manufacturers have ceased.”  As a result, one business economist[4] warned of “empty shelves in U.S. stores in a few weeks,” and “Covid-like shortages for consumers.”  These stoppages will cascade into job losses for longshoremen, truckers and railroads, and retail sales.[5] There could be a grievous toy shortage at Christmas because 80 percent of America’s toys are made in China.[6] 

What does China get from the United States?  Soybeans.  Some kinds of computer chips.  And many jobs.  All the stuff no longer going to America either has to be sold somewhere else, or stock-piled in warehouses, or not made at all.  Neither of the last two is sustainable, politically or economically, for long.  So China has to find a new target for its exports. 

Which country will blink first?  Is there a reasonable compromise that can be negotiated? 

Trump has wobbled on China to a degree.  He exempted some consumer electronics (smart phones, laptops) from most of the China tariffs.  He also indicated that he was ready to negotiate with China and that Xi Jinping had called him.  At the same time, he seems determined to “decouple” the economies of the two countries.[7]  At the very least, he said, “China will probably eat those tariffs.  Everything is going to be fine.” 

For their part, the Chinese seem not to have anticipated the “speed and ferocity” of the American trade counter-attack on China’s economic strategy.[8]  China’s public response has been to dig in.  “Bowing to a bully is like drinking poison to quench thirst.”[9]  Threats of retaliation abound.  When Trump said that Xi Jinping had called about tariffs, the Chinese Foreign Ministry basically called Trump a liar.  Hard to know which of those two to believe. 

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[1] “Decoupling: The U.S.-China trade divorce, The Week, 25 April 2025, p. 34.    

[2] Ibid.

[3] “Inflation: How tariffs could push up prices,” The Week, 18 April 2025, p. 17.    

[4] As in an economist employed by a business, in this case an asset management firm. 

[5] “Trump shrugs off warnings over trade war costs,” The Week, 9 May 2025, p. 4. 

[6] Feels heartless denying kids their hearts’ desire at Christmas.  Still, Boxing Day can be a time for repentance. 

[7] The historian Stephen Kotkin has observed that Trump often talks out of both sides of his mouth, but if you look at what he actually does, you can tell what he really means.  His remarks bore on Iran’s nuclear program.  He thinks Trump means to stop it, whatever that may require.  There’s no reason not to apply the same view to China trade. 

[8] “Decoupling: The U.S.-China trade divorce, The Week, 25 April 2025, p. 34. 

[9] Given China’s behavior toward its neighbors in Taiwan and the Philippines, this is comic.