China, without a doubt, manufactures everything from needles to cars and exports them across the world. But there is one thing it lacks—something that only the United States has.
On April 2, 2025, American President Donald Trump appeared in the White House holding a large red card in front of the media. This red card contained the names of several countries and their tariff rates written next to them.
President Trump read out the tariff rates of different countries one by one, and a wave of fear spread across the world. Stock markets in the US and globally crashed because this was a signal of a major war—a war where the weapon would be power and the ammunition would be money. Yes, this is what we call a trade war or tariff war.
Donald Trump made a strategic move that, according to some, could bring the world’s strongest trading nation, China, to its knees. If this trade war happens, who would have the upper hand—China or the United States?
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To understand this properly, first let’s understand tariffs. Most people think tariffs are just taxes on other countries, but in reality, it is an import duty applied on products entering a country.
For example, if the US imposes a 26% tariff on India, it means products coming from India will have a 26% tax in the US. Similarly, according to Trump’s list, Pakistan faced a 29% tariff, and China was at the top with a 34% tariff.
Imposing tariffs is not unusual. In fact, India already imposes 52% on the US, Pakistan 58%, and China 67%.
The purpose of tariffs is not just to earn money but to protect local industries. For example, Harley-Davidson motorcycles face 100% tax in India. Without this tax, foreign bikes would become as cheap as local Royal Enfield bikes, damaging the local industry.
So tariffs are used to make imported goods expensive, encouraging people to buy local products. This helps local industries survive and also saves foreign exchange reserves.
Since the US imposes tariffs, products coming into America become expensive, reducing their sales and encouraging people to buy locally made goods. For example, textiles from India and Pakistan sell in the US, but they could also be produced locally there.
However, China is the most affected by Trump’s tariffs. Some even say China was the main target.
Until 2000, the US dominated global exports. But over time, China took over global manufacturing. Today, even the smallest items are made in China and exported worldwide due to cheap labor.
Looking at US-China trade, in 2000 the US imported $80 billion worth of goods from China. By 2025, the US imports around $440 billion worth of goods from China, while China imports only about $145 billion from the US.
Trump argues this trade should be equal. The difference of about $295 billion is called the trade deficit.
To reduce this deficit, Trump targeted China, aiming to make Chinese goods more expensive in the US. This especially affects smartphones and products like the iPhone, which are American brands but manufactured in China.
If these products become expensive, companies may shift production back to the US. However, production costs in the US are higher, so products would become more expensive.
Many American companies depend on China for manufacturing, including Apple, Tesla, Dell, HP, Nike, Skechers, LEGO, Black & Decker, and others.
If these companies moved production back to the US, imports from China could drop by $200 billion annually, reducing the trade deficit significantly. But again, costs would rise, and companies might suffer losses.
It appears Trump aims to break China’s monopoly, even if it causes some damage to the US itself.
On the other hand, China is also responding by increasing tariffs on American goods, turning the situation into a full trade war.
Both countries are refusing to back down. As tariffs rise, goods become twice as expensive on both sides.
Now the question is: who will win this trade war?
The side that survives longer will win.
The US mainly imports electronics, toys, smartphones, and laptops from China. If these are not imported for some time, the US will not be heavily affected and can source them from elsewhere, though at slightly higher prices.
But China imports something from the US that it cannot easily replace: soybeans.
China has a population of 1.41 billion—315% more than the US. Feeding this population requires massive food production, especially wheat and rice.
However, China only has about 13% arable land. Each citizen effectively has only 0.23 acres of farmland.
China also consumes huge amounts of pork—over 400 million pigs, more than the US human population.
These pigs require feed: corn and soybeans. About 60% of feed is corn and 40% soybeans.
While China produces most of its corn domestically, it imports soybeans mainly from the US and Brazil—around 50 million tons annually from the US alone.
Soybean farming is highly efficient in the US due to abundant land and low population density. The US can easily export soybeans, unlike China.
China has tried alternatives like canola seeds, peanuts, and sunflower meal, but none match soybeans in nutrition efficiency and cost-effectiveness.
They are also experimenting with insect farming to feed livestock, but it is still in the testing phase.
China is a trade surplus country—it produces more than it consumes and must export heavily to survive economically.
The US, on the other hand, is a consumer-driven market with many import options.
In Trump’s previous term, tariffs against China were also imposed, and China was seen as losing the trade battle.
Recently, reports suggest Trump has paused tariffs on other countries for 90 days but increased tariffs on China to 125%, clearly targeting China.
What do you think about this situation? Share your thoughts in the comments.
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