Chrysostomos (Makis) Bollas: The USA-China Trade War: A Battle of Tariffs and Its Global Dangers

The trade war between the United States and China, two of the world’s largest economies, has reshaped the landscape of global commerce and economics since its inception in 2018. Marked by the tit-for-tat imposition of tariffs, this prolonged economic standoff has not only strained bilateral relations but has also sent ripples across global supply chains, markets, and industries. While intended to protect domestic industries and correct trade imbalances, tariffs can unleash a host of unintended consequences that may harm the very economies they aim to protect.

Understanding the Roots of the Trade War

The trade war began under the Trump administration, which accused China of unfair trade practices, including intellectual property theft, forced technology transfers, and massive trade surpluses with the U.S. In response, the U.S. imposed tariffs on hundreds of billions of dollars’ worth of Chinese goods. China retaliated with its own tariffs on U.S. products, including agricultural goods, automobiles, and industrial components.

Although both sides signed a “Phase One” trade agreement in 2020, tensions persist, and many of the original tariffs remain in place, with broader geopolitical issues such as Taiwan, technological supremacy, and military competition adding complexity to economic relations.

The Dangers of Tariffs

While tariffs are often promoted as tools to protect domestic industries and promote fair trade, they carry significant risks:

1. Higher Costs for Consumers and Businesses

Tariffs are essentially taxes on imports. When imposed, they increase the cost of foreign goods. For businesses that rely on imported materials and components, this raises production costs. These costs are often passed on to consumers in the form of higher prices, contributing to inflation and reducing consumer spending power.

2. Supply Chain Disruptions

Global supply chains are deeply interconnected. Tariffs force companies to re-evaluate sourcing strategies, often at great cost. This not only affects profitability but also creates inefficiencies as firms struggle to find alternative suppliers. Smaller businesses are particularly vulnerable as they may lack the resources to adapt quickly.

3. Retaliatory Measures

Trade wars rarely result in one-sided victories. Retaliation is almost always a given. In the case of the U.S.-China conflict, American farmers suffered significantly due to Chinese tariffs on soybeans, pork, and other agricultural products. The government was forced to provide billions in subsidies to offset the losses.

4. Global Economic Uncertainty

Tariff battles create uncertainty in global markets. Investors become wary, capital spending slows, and financial markets become volatile. Countries that are not directly involved can still be caught in the crossfire, especially those deeply embedded in global trade networks.

5. Strained Diplomatic Relations

Beyond economics, trade wars have diplomatic ramifications. The prolonged tension between the U.S. and China has deepened mistrust, making cooperation on broader issues like climate change, public health, and security more difficult.

What Lies Ahead?

As of 2025, the U.S.-China trade relationship remains fragile. While some leaders have called for de-escalation and the rollback of tariffs, strategic competition between the two powers is unlikely to ease anytime soon. Both nations are pushing for greater self-reliance—China through its “dual circulation” strategy, and the U.S. through its renewed focus on reshoring and industrial policy.

The world watches closely, as the outcome of this economic standoff could shape the future of globalization and influence the rules of international trade for decades to come.

Conclusion

Tariffs may serve as a short-term remedy for trade grievances, but in the long run, they often produce more harm than good. The U.S.-China trade war has shown that economic nationalism can come at a steep price, affecting not just the two combatants but the entire global economy. In an interconnected world, cooperation, not confrontation, may ultimately prove the more sustainable path forward.