US China trade situation is a strategic game not a war. While the phrase ” trade
war ” has been used to describe imposition of import tariffs for all the
countries. Trade war is not like that of other wars that are in Ukraine, Gaza or
Sudan in which millions of people lose their lives and destruction of properties.
Trump as being the shrewdest president all over the world is playing a strategic
trade game by imposing tariffs closer to prohibitive level. Trade usually stops
completely when it reaches prohibitive level.
What’s the objective of imposing tariffs on trade. As international trade is
carried out in dollars. Trump wants to provide protection to the manufacturers
initially at the expense of consumers. Secondly, he wants to give relief to the
citizens in taxes and improve in revenue generation.
Countries will retaliate, negotiate for bringing tax to the lower level or
relaxation in tariffs. China is having economy comparable to US and is having
145% tariff on imports imposed by US which is close to prohibitive level. China
retaliated, imposed tariffs back on US. US threatened China not to impose
tariffs on US, otherwise they will impose more tariffs on China’s trade.
Will Trump achieve his target? It’s very difficult for Donald Trump to achieve
revenue generation and tax collection by imposing tariffs. Countries having
comparatively small economies than US, will not retaliate. Some of the
countries will negotiate to lower tariff at baseline 10% and some of the
countries like China, India, Brazil might start trade in local currencies instead of
dollars. Secondly, manufacturers would have to pay double amount on import
due to tariffs and it results in increase in inflation and it will reduce the
demand of imported products. China will start trading with EU and other
countries.
US can generate revenue at baseline tariff 10% from all over the world. Just
imagine for a while that if there’s increase in tariffs above 10% base line, then
they cannot achieve desired results.
WTO (World Trade Organization) has allowed to linger trade policy for years
and countries would negotiate to back the tariffs at lower rate.
International trade is peace time activity and Trump should give relaxation on
tariffs and keep it at baseline 10%.
The overemphasize on Trump’s personality as being one of the shrewdest
presidents of world today and war metaphor reduces the likelihood of
flexibility to set tariffs at moderate level. Let us see and how this game unfolds,
perhaps perpetuate the same economic order.
The writer of article is the student of International Relations in International
Islamic University Islamabad
US China Trade Game
Abstract
This article argues that the US-China trade tensions should be seen as a strategic economic game rather than a traditional “trade war.” Unlike violent conflicts causing loss of life and destruction, the US, under President Trump, strategically used high tariffs to protect domestic manufacturers and boost revenue at consumers’ initial expense. The piece explains the dynamics of retaliatory tariffs, the risk of inflation, and the possible shift of countries like China, India, and Brazil towards trading in local currencies. It suggests that maintaining a baseline tariff of 10% could achieve better outcomes without escalating tensions. The article concludes that international trade remains a peaceful activity and advocates for moderation and negotiation to sustain the global economic order.
Alishba Saleem