The U.S.-China Trade War: May Create Buyers’ Paradise

And the climax is here. The climax of the Trade War between the United States of America and China—who so far had been playing the league matches and now entered the knock out round.

As the world watches who scores what, the U.S. tariff on China has reached 104 per cent and Chinese tariff on the U.S. today touched 84 per cent. European Union too is reported to be preparing its own tariff on the United States in retaliation to the U.S. tariffs against it.

As expected, news on the ongoing wars with bombs and missiles have taken a back-seat for now, and the trade war between the U.S. on the one side and the rest of the world on the other, is what all the world is anxious for updates.

The direct confrontation now is between the two largest economies of the world—the first largest economy, the United States and the second largest economy, the People’s Republic of China.

The Mutual Trade

U.S. exports to China

The list of goods include: soyabeans, aircrafts and engines, integrated circuits, pharmaceuticals, oil, gas and vehicles. In 2024, it exported to China goods worth $143.5 billion, according to the data in various public sources.

Also, China is the biggest market for the U.S. soyabeans with an export value of around $ 12 billion.

Chinese exports to the United States

Includes: electronic goods, computers, toys, batteries, electric vehicles, machinery, nuclear reactors, boilers, furniture, fabricated buildings, plastics, articles of iron and steel, optical, textiles articles, footwear, glass and glassware, edible fruits, nuts, cotton, silk, smart phones etc. Total volume of Chinese goods exported to the United States stood around US$501 billion in 2023.

Trade Deficit for the U.S.

Thus, the U.S. bears a trade deficit of around $300 billion annually with China alone.

China’s Foreign Exports

According to data available from various public sources, China’s foreign export volume in 2024 stood at $3.5 trillion—which was an increase of about 5.9 per cent from the year 2023.

China exports its goods to nearly every other country across the world. The leading export partners of China are Asian countries, European Union countries, and the United States. Trade surplus of China in 2024 stood at US$ 992 billion in the year 2024.

U.S.’s Foreign Exports

The United States exported $3,051.8 billion worth of goods and services in 2023, up $396.4 billion from 2022.

Global trade deficit of the United States in February 2025 came down to $122.7 billion, from $130 billion in January 2025 on the face of a trade deficit with China @ around $300 billion. This means that U.S. trade deficit from China eats up the U.S.’s global trade surpluses.

What is at stake for whom?

For China, it enjoys a trade surplus of around $300 billion annually—all of which is at stake now after Trump’s 104 per cent tariff. China looks for alternative markets mostly in India, and Europe. As Europe too has been manufacturer of goods, most favoured selling destination for China would be India, its nearest neighbour—and China has been therefore burying its border disputes with India. It may in fact use border dispute-and-peace as a catalyst to promote its own economy in India.

For the United States, Chinese market is the biggest for its foreign exports of soyabeans, whose volume stands at around $ 12 billion. The U.S. farmers will be directly hit.

What will happen now?

U.S. President Donald Trump has opened up fronts with nearly all the countries which are in mutual trades with the U.S, and have been enjoying trade surplus by exporting their goods to the United States. Thus, Trump’s tariff has disturbed the trade of all these countries—and most of them now are looking for alternative markets.

On the other hand, the U.S. too had been exporting its goods to other countries, some of which are now directly confronting the U.S. with retaliatory tariffs like European Union, Mexico, Canada being some prominent ones, apart from China. Therefore, even the U.S. is looking for alternative trade partners.

Just as the world is going through a re-alignment of geopolitics after Trump’s coming in, geo-trade is re-aligning itself.

What would be the likely impact of the U.S.-China trade war?

The U.S. and China are big economies that do big business with the rest of the world, jointly accounting to about 34 per cent of the global trade. Mutual trade war between these two powers will push not just their economies into economic slow-down, but also the economies of other nations into slow growth, as feared by analysts. Global investors will suffer mostly.

China produces a large volume of goods, much more than its population can domestically consume—and hence it is the neediest nation for favourable foreign markets. Moreover, its state-owned capitalism and state-supported finance including cheap loans, help manufacturers manage to produce goods at a value below the true cost—making it difficult for other competing nations to stay price-competitive in the global market. With the U.S. blocking up cheap Chinese goods, Chinese firms will find alternative markets to sell them at throw-away prices. This will impact the domestic manufacturing of nations, and possible job losses in them. But buyers will have goods at prices all time low—thus, U.S.-China trade war may create buyers’ paradise.

Was it to happen?

The U.S.-China trade war was inevitable. In fact, it is late by a few years. However, as President Trump opened too many fronts at one go, not just the Chinese front, it complicates the matter for the United States.

For China, it is a do or die case as it has waited and prepared itself for many years for this moment. For the U.S., it is a question of its survival as the largest economy and global super power. Outcome of this geo-trade war will decide the future course of geo-politics.