Does The US Have A ‘Sharp’ Strategy Against China On Tariffs? – OpEd
The “Liberation Day” tariffs that were announced in April 2025 resulted in reciprocal tariffs on imports from China that escalated to 125%, which was in addition to an existing 20% baseline tariff. This resulted in an effective tariff rate of 145% on Chinese goods. These rates were simply unsustainable because they would have hurt manufacturers who relied on Chinese inputs, not to mention the American consumers who depended so much on goods from that country. American companies in the distributive trade sector, Walmart included, would have been badly hit.
China responded as aggressively as the US did, retaliating with matching tariffs on US imports that went as high as 125% on certain products. Agriculture products from the US took a deep hit. The products that the Chinese targeted included agricultural products such as chicken, wheat, corn, cotton, soybeans, sorghum, pork, beef, seafood, fruit, vegetables, and dairy-covering over 700 tariff lines.
The logic is apparent: China wants the agriculture sector to experience the intensity of the retaliation. The target group are farmers who most likely are from Trump’s constituency. Many of these goods are not of deep strategic interest and could as easily be produced in China. There is a greater cost that China can impose on the US than they have to absorb from this round of tariffs.
The Chinese also imposed tariffs on energy products like coal and liquefied natural gas (LNG), which faced additional duties of 15%. This was a direct hit on the energy sector. The export restrictions on rater earth elements and other critical minerals would have a negative impact on hight-tech manufacturing.
The US did have high duties on Chinese products, but they were not targeted to have a direct impact on specific sectors. Rather, they were more broad-based, though undeniably higher. The US had directed tariffs at semiconductors and integrated circuits, pharmaceuticals, automobiles and parts and electronics and technology products. A broad sweep approach was applied, though largely at manufacturing. The weakness of the American approach lay in the fact that it was a broad sweep scheme that would impede US manufacturing whilst affecting the Chinese too.
The costs that the US will have to bear if they charge high tariffs on Chinese imports in E&E, automotive parts and pharmaceutical products would make American products too expensive for domestic consumers as well as for export. That explains why the US has been reluctant to proceed with the April 2025 scheme of retaliatory tariffs.
After much drama the US and China met in Geneva in May to negotiate the tariffs. China stood its ground because it was happy to call Trump’s bluff on the 145% rate. Trump for his part had to play the winner, the compassionate negotiator, who though tough had a heart. He confessed that, “We’re not looking to hurt China” and he added thoughtfully, that China was “being hurt very badly”. So badly, as he claimed, that “they are closing up factories. They are having a lot of unrest, and they were very happy to be able to do something with us.”
The U.S. and China held their key trade talks in Geneva, Switzerland, over the weekend of May 10–11, 2025. These discussions resulted in a major breakthrough agreement announced on May 12, 2025, where both sides agreed to a 90-day pause and substantial reduction of their reciprocal tariffs. The U.S. agreed to reduce its additional tariffs on Chinese goods from 145% to 30%, while China agreed to cut its tariffs on U.S. imports from 125% to 10% for the duration of the truce. This agreement effectively suspended the highest tariff rates imposed during the April escalation. It provides temporary relief and offers a pathway for further negotiations
China clearly wanted to cooperate with the US, but not entirely on Trump’s terms. Surely decoupling is not on the agenda for China. A country run by the communist party would not have taken the trouble to join the World Trade Organisation if it wanted to isolate itself. Neither is it now possible for the US to decouple from China or to isolate China. China is too deeply integrated into the global system to be uprooted from global supply chains, so isolation in that sense must be ruled out.
Treasury Secretary Scott Bessent, if his views do count, has reaffirmed the position that the US does not wants to be decoupled. He has affirmed that “the consensus from both delegations is neither side wants to be decoupled.” Bessent suggested that he wanted the talks to move towards “de-escalation” rather than a “big trade deal”. He has made it clear that they want trade, but they “want more balance in trade,” which perhaps is a euphemism for more trade, with the US having a trade surplus always.
But it is not clear how the reciprocal tariffs are expected to work against China (if that is the intended aim), without self-inflicting the US and the rest of the world. Or if the reciprocal tariff strategy will be scaled down and supplemented with other plans. It seems as if the US does not have a clear gameplan, neither are there well-defined outcomes that the US wants to pursue, except the loose objective of “making America great again.”
And as Trump sees it, China stands in the way of MAGA. As for China, they are single-mindedly bent on achieving economic and technological superiority. They do not operate on the same time scale as the US: they will, through tough and easy times, find a way of soldering ahead, making deep and meaningful strikes rather than broad and poorly considered measures.
