What the spiralling trade war means for relations between the US and China

The escalating trade war between the US and China is straining their relations, impacting global economies, increasing tensions, and potentially leading to long-term geopolitical shifts and economic realignment.

Donald Trump has partially walked back on his so-called “liberation day” tariffs on nearly all US imports after fears mounted that the move would result in a global recession and much higher borrowing costs for the US government.

On Wednesday, April 9, a mere 13 hours after his higher rate of “reciprocal tariffs” had come into effect, Trump announced they would be paused for 90 days.

“I thought that people were jumping a little bit out of line, they were getting yippy, you know … a little bit afraid,” Trump said to reporters outside the White House. Markets soared immediately upon hearing the news.

But at the same time, a volatile new stage in America’s trade war with China has emerged. The White House has excluded China from the pause and has hiked tariffs on all Chinese imports to 125%. This, Trump says, is because Beijing has shown “disrespect” to Washington and global markets.

Beijing, which has declared it will “fight to the end if the US side is bent on going down the wrong path”, was quick to respond. It has announced duties of 84% on American products and services, and has even floated the possibility of banning the import of Hollywood films.

What China’s response has shown is that it is no longer the same country as it was in 2017, when Trump managed to obtain some trade concessions from it by imposing tariffs. Beijing seems more willing to strike back at Washington, as well as showing signs of being more proactive in its response to American measures.

This article is republished from The Conversation under a Creative Commons license. Read the original article.