Trade Wars And Power Struggles: How U.S. And China’s Tariffs Are Reshaping The World Economy
The Mt Kenya Times 
By: Silas Mwaudasheni Nande, Namibia
The United States has long positioned itself as a global superpower, engaging in military conflicts across multiple regions to maintain its dominance. From the Middle East to Eastern Europe, its military presence is a strategic tool for asserting influence. However, beyond the battlefield, the U.S. faces an equally intense economic and trade war with China—its biggest global rival. What started as a competition over trade imbalances and technology has now escalated into a new phase of economic warfare, marked by aggressive tariffs and countermeasures that could reshape global markets and financial systems.
The trade tensions between the United States and China have escalated recently, with both nations imposing new tariffs on each other’s imports. In February 1, 2025, the Trump administration implemented a 10% additional tariff on Chinese goods. In response, China swiftly retaliated by imposing tariffs on U.S. products, including liquid natural gas, coal, and oil.
Historical Context
The U.S.-China trade conflict began in 2018 when the U.S. imposed tariffs on Chinese imports to address trade imbalances and alleged unfair trade practices. China responded with its own tariffs, leading to a series of escalations partial agreement was reached in January 2020, but many tariffs remained. The Biden administration maintained most of these tariffs, and in May 2024, announced additional tariffs on $18 billion worth of Chinese goods.
Current Tariffs
As of February 2025, the U.S. has imposed a 10% additional tariff on Chinese imports. The U.S. imposed tariffs on Chinese imports for several key reasons, primarily revolving around economic competition, trade imbalances, and national security concerns. The main justifications include:
- Trade Deficit Reduction – The U.S. has consistently run a large trade deficit with China, meaning it imports significantly more than it exports. Tariffs were introduced as a tool to encourage domestic production and reduce reliance on Chinese goods.
- Intellectual Property Theft – The U.S. has accused China of engaging in unfair trade practices, including forced technology transfers and intellectual property (IP) theft. Tariffs were seen as a way to pressure China into respecting international IP laws.
- Unfair Trade Practices – The U.S. government argues that China manipulates its currency, heavily subsidizes state-owned enterprises, and engages in practices that distort fair competition.
- National Security Concerns – Some tariffs, especially those on high-tech goods, are linked to fears that China’s advancements in technology, including artificial intelligence and telecommunications, pose security threats. The U.S. has specifically targeted companies like Huawei and restricted exports of advanced semiconductors.
- Political Leverage – Tariffs are also a geopolitical tool, used to pressure China into trade negotiations and to curb its growing influence in global markets. The U.S. aims to weaken China’s economic momentum and prevent it from surpassing American dominance.
While these tariffs were initially introduced during the Trump administration in 2018, they have largely been maintained and expanded under the Biden administration, signaling a long-term economic standoff between the two nations.
China’s Retaliation
China retaliated against U.S. tariffs for several strategic and economic reasons:
- Economic Protection – The tariffs imposed by the U.S. made Chinese goods more expensive in the American market, potentially reducing demand. By imposing its own tariffs, China aimed to protect its industries by discouraging imports from the U.S. and promoting domestic alternatives.
- Maintaining Economic Leverage – China is a major trading partner for the U.S., and it wanted to remind Washington that it also had economic tools at its disposal. Retaliatory tariffs on key U.S. exports, such as agricultural products, were meant to put pressure on American businesses and policymakers.
- Political Messaging and Sovereignty – Accepting tariffs without a response could be seen as a sign of weakness. Retaliation was necessary for China to assert its sovereignty and show both domestic and international audiences that it would not be economically bullied.
- Counterbalancing U.S. Strategy – The U.S. tariffs aimed to weaken China’s export-driven economy. By responding in kind, China sought to create economic pain for American industries, especially in politically sensitive sectors like agriculture (which affects rural U.S. voters) and energy.
- Bargaining Power in Trade Negotiations – Retaliation strengthened China’s position in negotiations, signaling that the trade war would have mutual consequences rather than being one-sided. This approach led to partial trade agreements, such as the ‘Phase One‘ deal in 2020.
Was Retaliation Necessary?
From China’s perspective, retaliation was necessary for both economic and strategic reasons:
- Preventing One-Sided Economic Damage – If China had not responded, its businesses and industries would have suffered without any pushback, giving the U.S. full control over the trade conflict.
- Maintaining International Reputation – A non-response might have encouraged other countries to impose unfair trade restrictions on China, setting a precedent for economic exploitation.
- Domestic Political Stability – The Chinese government needed to demonstrate strength to its citizens, as appearing weak to foreign pressure could undermine national unity and political stability.
However, the trade war also came at a cost for China, leading to slower economic growth, shifts in global supply chains, and increased pressure on its manufacturing sector. Still, China viewed retaliation as a necessary step to counterbalance U.S. economic aggression and maintain its position as a global trade power.
The US Reliance in China
The U.S. depends on China for a wide range of products, especially in sectors where China dominates global manufacturing. Some key products in which the US depend on China include but not limited to the following:
- Electronics and Technology
Smartphones & Laptops – Major brands like Apple manufacture many of their products in China.
Semiconductors & Components – While the U.S. is working to reduce reliance, many semiconductor parts are still produced in China.
Batteries – Lithium-ion batteries, essential for electric vehicles (EVs) and electronics, are heavily sourced from China.
- Pharmaceuticals & Medical Supplies
Active Pharmaceutical Ingredients (APIs) – Many essential drugs, including antibiotics and painkillers, rely on Chinese-manufactured raw materials.
Medical Equipment – China supplies personal protective equipment (PPE), surgical masks, gloves, and medical devices.
- Rare Earth Minerals & Industrial Materials
Rare Earth Elements – These minerals are critical for military applications, EVs, wind turbines, and electronics. Light Rare Earths such as Lanthanum, Cerium, Praseodymium, Neodymium, Promethium, Samarium and Europium are crucial for Military and Defense Missiles & Precision-Guided Weapons while Heavy Rare Earths such as Gadolinium, Terbium, Dysprosium, Holmium, Erbium, Thulium, Ytterbium, Lutetium, Yttrium and Scandium, some of these, are needed by the US for Stealth Technology, Jet Engines & Drones as well as Communications & Surveillance purposes. China controls over 60% of global supply.
Steel & Aluminum – While the U.S. produces its own, it still imports a significant portion of industrial metals from China.
- Consumer Goods & Apparel
Clothing & Footwear – Many American brands, including Nike and Adidas, manufacture in China.
Home Appliances – Refrigerators, washing machines, and kitchen appliances are often sourced from China.
Toys – A large portion of toys sold in the U.S. are made in China.
- Automotive Parts
Car Components – Many parts, including electrical systems and mechanical components, are imported from China, impacting automakers like Ford and General Motors.
- Solar Panels & Green Energy Components
Solar Cells & Panels – China dominates solar panel production, which is crucial for the U.S.’s renewable energy goals.
Wind Turbine Components – Many wind energy technologies also rely on Chinese supply chains.
- Furniture & Home Goods
IKEA and Other Brands – Many furniture products, including wooden and plastic materials, come from China.
- Agricultural Inputs
Fertilizers & Pesticides – China is a major supplier of key chemical inputs used in U.S. agriculture.
- Textiles & Industrial Fabrics
Synthetic Fabrics – China is a key producer of polyester, nylon, and other synthetic materials used in clothing and industrial applications.
- Telecommunications Equipment
Networking Devices – Companies like Huawei and ZTE provide telecom infrastructure, though the U.S. has restricted them due to security concerns.
Why This Dependence Matters
This reliance on Chinese goods means that trade restrictions, tariffs, or geopolitical tensions can have major consequences for U.S. businesses and consumers. While the U.S. has been working to diversify supply chains, China remains a crucial player in global manufacturing and exports.
Implications for Both Countries
The ongoing tariff exchanges can lead to increased costs for businesses and consumers in both countries. In the U.S., higher tariffs may raise prices for imported goods, contributing to inflation or China, tariffs on its exports can reduce demand, potentially slowing its economic growth. Additionally, the U.S. goods trade deficit reached a record $1.2 trillion in 2024, indicating persistent trade imbalances.
Impact on the U.S. Dollar and BRICS Currency Initiatives
The trade tensions and tariff measures have implications for the U.S. dollar’s status as the world’s primary reserve currency. BRICS nations (Brazil, Russia, India, China, and South Africa) have discussed creating a new reserve currency to reduce reliance on the U.S. dollar. Such a move could decrease global demand for the dollar, potentially leading to its depreciation. In response, President Trump has threatened 100% tariffs on BRICS countries if they attempt to replace the U.S. dollar as a reserve currency.
In summary, the escalating tariffs between the U.S. and China reflect ongoing trade tensions with significant economic implications. These actions not only affect bilateral trade but also have broader consequences for global currency dynamics, especially concerning the U.S. dollar’s dominance and potential challenges from BRICS nations.
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