In 2025 the U.S. imposed sweeping tariffs on Chinese goods, with baseline rates at one point reaching 145% while China retaliated with tariffs imposed on the USA up to 125%. Emergency talks were held in Geneva in May 2025. Both sides agreed to a 90-day pause which was subsequently extended. The U.S. rolled back tariffs from 145% to 30%, while China reduced its tariffs to 10%.
At the end of 2025 Beijing is describing the deal as a major win, framing the outcome as a diplomatic and economic victory. China argues that its firm stance forced Washington to retreat and emphasizes that the rollback validated their negotiating strategy. China acted to redirect goods sold to the USA through indirect channels, thus dodging the higher tariffs.
China also cushioned the tariff blow by rerouting exports. After finding new buyers in Brazil, Japan, Malaysia and Cambodia, one manufacturer said that the lesson learned was that “Nothing is more important than the markets close to us” - rather than the US market. Earlier, with the threat of tariffs looming, China accelerated exports ahead of tariff implementations ("front-loading") leading to more stability in the first half of 2025. While Chinese exports to the US dropped nearly 18% in the first 10 months of this year versus that period in 2024, they were up more than 7% to the European Union, 14% to countries in the Association of Southeast Asian Nations, and 26% to Africa. Overall, exports rose 5.3%. China had already reduced its reliance on the U.S. market from 19% of exports in 2018 to 12.8% by 2023. China simultaneously shifted focus towards bolstering domestic demand.
China also has an ace in their hand – their control over critical resources such as rare earth minerals. Their ability to impose export restrictions in this sector have given leverage in the trade conflict, complicating the U.S.'s economic strategy.
China also has strong fundamentals in various areas. Supported by reduced regulatory pressures and increased demand for AI, cloud technology, and big data services, the Chinese technology sector is robust. China's semiconductor industry is expanding rapidly, growing its global market share from 4.2% in 2017 to 6.3% in 2024. The EV sector benefits from strong government support and is gaining a competitive edge in China’s ‘green’ transition.
But all is not good news for the Chinese side. Recent events have raised fears that a deluge of Chinese goods into non-US markets will wipe out domestic industries. Countries have been hitting back with probes on Chinese goods, with the US and India, as well as Mexico and Brazil, together raising 79 anti-dumping and countervailing probes against Chinese goods in the first half of this year – a significant increase from recent years before 2024, according to World Trade Organization data. Some countries feel as if they are being swamped with a ‘tsunami of Chinese goods coming into ASEAN.’ But it is a hard choice - the same countries may also be unwilling to throw up barriers to China at a time when they are facing these same US imposed higher tariffs on their own goods into the US.
“In the longer term, the battle is less about outright victory and more about who can endure the pain longer. Right now, China is showing greater resilience. Currently, despite the tariffs, China's economy has shown ongoing growth - by 5.2% in the second quarter of 2025 - which surpassed expectations. Whether China can maintain its level of exports to the rest of the world and expand back into the US market after the recent truce, is a vital question for the world’s second-largest economy.”
Pray for the leaders of both China and America that wisdom in economic policies would guide their actions.
Pray against the danger of unemployment and subsequent hardship in the lives of ordinary people caused by these events.
Pray for leaders in the East and West to walk in the fear of God and to care for their fellow citizens.
Source: CNN and others.
