The tariffs adopted by the U.S. to meet Trump’s August 1 deadline fully confirm just how dangerous the new trade system Trump is attempting to impose on the world is for all countries, both in the Global South and the Global North.
China has a won clear victory in the first battle of the US “trade war”. But the U.S. will not abandon its economic struggle against China. This article analyses the forces that will determine the outcome of this “protracted” economic war.
Trump’s “tariff war” is an attempt to bring the entire world trading system under unilateral US control, removing any minimal element of multilateral negotiation from it.
If the U.S. cannot succeed in slowing China’s economy, then it can only decrease China’s lead in growth rate by increasing the percentage of net fixed capital formation in the U.S. economy.
China’s GDP growth rate in 2024 of 5.0% compares to the U.S.’s of 2.8%. China’s was therefore 80% higher than the U.S.
There are measures that would increase U.S. economic growth rates and competivity, but the U.S. is unwilling or unable to take them.
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