The impact of the tariff war on global industrial dynamics

Undoubtedly, one cannot explain the nature and function of a phenomenon without considering its consequences and implications! This overarching principle also applies to the recent economic war between the United States and other countries.

It is evident that the all-out tariff war, initiated after Donald Trump’s arrival in the White House, could adversely affect global industrial dynamics and the transactions within this domain.

Many industrial exchanges are governed by the rules and constants of the World Trade Organization and international markets. However, when these constants are challenged—due to reasons such as a chronic and far-reaching tariff war—the repercussions will not be limited to short-term, minor commercial relations.

In this regard, it is essential to stay informed about the latest developments in the economic and tariff war between the United States, China, and other actors. The scope and depth of the U.S.-China tariff war are expanding daily. This expansion is such that it is no longer possible to describe the current economic conflict as a bilateral and limited dispute!

Both Washington and Beijing are actively seeking to involve other international actors in this conflict, either negatively or positively. More importantly, there are no signs of de-escalation in this conflict, at least in the current period. The White House shows no intention of backing down from its trade war against China, while Beijing, in response to the Trump administration’s restrictive policies, has adopted a more pragmatic approach than before and is issuing clearer warnings to other countries about aligning with Washington.

Recently, Donald Trump imposed 145% tariffs on a wide range of products imported from China. In a retaliatory move, the Chinese government increased tariffs on certain American products imported to China by up to 125%. Some countries are negotiating with the United States to reduce or eliminate tariffs before a 90-day deadline. Reports suggest that Trump also plans to leverage these negotiations to further his trade war with China.

The issue is clear: the intensity and scope of the current tariff war surpass what we witnessed between 2017 and 2020, during Trump’s first term. In this equation, intermediary actors such as India, South Africa, Brazil, and Japan have become subject to the current war, losing their ability to mediate this conflict.

The United States is pressuring countries worldwide to limit their trade with China in exchange for tariff exemptions. On the other hand, China has emphasized that any country or company conceding to Washington in this conflict will face negative repercussions from Beijing, likely in the form of economic sanctions or exclusion from the Chinese market.

Thus, in analyzing or, more precisely, redefining the U.S.-China economic war, we are confronted with a wide range of variables that distinguish it from the previous conflict between Washington and Beijing during Trump’s first presidency. In this equation, it is unclear which actor will hold the upper hand, but what is certain is that the international system is being reluctantly drawn into a conflict it initially had no desire to engage in!