Trump’s tariff threat on China: The news that President Trump is proposing to double tariffs on Chinese imports has unleashed alarm across global markets and trade halls. Such a move, were it to be implemented in full, would mark a dramatic escalation in US–China economic confrontation. Yet it is unlikely to be more than a negotiating gambit — a high-stakes tariff threat designed to extract concessions — for the simple reason that the US cannot afford a full-scale trade war with China. The deeper dynamics of the global economy, the fragility of US politics, and the entangled nature of supply chains all counsel restraint.
Trump’s 100 per cent tariff threat must be viewed in the familiar category of “tariffs as bargaining chips,” rather than the launch of a sustained economic war. The administration has already walked back, partially, the immediacy of implementation, injecting just enough uncertainty to keep China off balance. Analysts see the 100 percent tariff threat as a maximalist opening salvo, not a committed end state.
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Tariffs can backfire on domestic economy
Tariffs are inherently blunt instruments. Once imposed across a wide base of trade, they inflict damage not just on the target country, but on domestic consumers, manufacturers relying on inputs, and financial markets. The US has been here before: scholars estimate that between 2018 and 2019, tariffs directed at China shaved around 0.25 per cent off US growth.
A renewed, wholesale doubling would risk hurting US growth, aggravating inflation, and triggering global backlash. Thus the 100 per cent tariff threat is better understood as an effort to reset the bargaining envelope: to pressure China into concessions on semiconductors, rare-earths, investment restrictions or currency. Once negotiations advance, the threat can be scaled back — or postponed.
Supply chain disruption and spillovers
A full-blown trade war with China would disrupt the delicate global supply chains that bind the US economy to China and its neighbours. In recent years the US has shifted some sourcing (the China + 1 strategy), but China remains deeply embedded, especially in advanced manufacturing and intermediate goods. Any sudden doubling of tariffs would force firms to scramble for alternative suppliers — a costly, slow process.
China has already countered with export controls in strategic sectors. In a sweeping new regulation, China requires exporters of goods containing even trace amounts of Chinese rare earth inputs or technologies to obtain export licences. That regulation is designed precisely as leverage in a trade standoff. By constraining critical inputs (rare earths, semiconductor materials, lithium battery components), China raises the stakes of escalation — and increases its negotiating position.
Thus, while the US can threaten tariffs, China retains asymmetric tools of its own — export control, licensing restrictions, and regulatory pressure — that are harder to retaliate against via simple tit-for-tat tariffs.
US tariff threat, inflation, and consumer burden
Tariffs are essentially a tax on consumption. While importers and retailers may absorb a part of the cost, much of it eventually passes to American consumers. Recent daily pricing data suggest that import prices have already risen about 5 per cent in response to tariffs, and domestic prices are also trending upward. That is inflationary at a time when the US Federal Reserve is constrained in its capacity to ease rates or cushion the blow.
Empirical studies of earlier Trump‐era tariffs show that much of the burden was borne by US firms and consumers. A Brookings analysis found that US companies absorbed losses, employment dipped, and gains in trade balance were offset by lower domestic investment. Additional estimates suggest that the Trump‐era tariff burden could amount to more than $1,300 per US household by 2025.
Politically, such pressures matter. Farmers, manufacturers, and consumers would push back — and during an election season, the political cost of a protracted trade war could prove intolerable even for a determined president.
China’s export resilience and market diversification
China has already demonstrated that its exports beyond the US are resilient — even in the face of American tariff pressure. In September, China’s exports surged 8.3 per cent year-on-year globally, though exports to the US dropped 27 per cent. Meanwhile, shipments to Southeast Asia, Latin America and Africa are rising robustly — helping offset US losses.
China’s deeper integration in global value chains, its large domestic market, and its ability to pivot trade routes make it far more resilient to US tariff escalation than Washington might hope. Even as US demand for Chinese goods falls, China can lean on other markets or reroute exports. Thus any trade war would likely inflict more pain on the US side, while China can absorb the shock — at least temporarily — and continue to press bargaining demands.
Strategic imperative: Bargaining, not burning the house
The Trump administration’s negotiating playbook calls for dramatic tariff threats (100 per cent tariffs), simultaneous softer signals, and retention of exit options. In practice, the US would likely settle for interim tariffs, industry carveouts, or gradual phase-in — not the sheer doubling across the board. As Trump’s recent backpedalling of immediacy suggests, the “double tariffs” mantra is at once alarming and negotiable.
China’s own measures — the new rare earth export curbs, artificial diamond restrictions, control over recycling technologies — build bargaining chips, not irreversible barriers. The timing, just days before a scheduled Trump–Xi meeting, reinforces the notion of brinkmanship. If the US truly sought to wage an all-out economic war, it would have to commit to massive industrial subsidies, protection of entire sectors, and cross-border capital controls — a path fraught with domestic economic and constitutional risks.
In short, doubling tariffs is a threat designed to coerce, not to commence perpetual war.
Trump’s tariff threat on Chinese imports commands attention and fear. Yet for all its bluster, it is more likely a negotiating gambit than a blueprint for sustained economic warfare. The complex interdependence of supply chains, the inflationary and competitive damage to the US, and China’s ability to deploy export controls and alternative markets all weigh heavily against a full-scale tariff escalation. The safety valve lies in de-escalation through negotiation — once the initial shock rattles Beijing’s resolve. Absent that, both sides risk unintended damage.
If history is any guide, Washington knows it cannot fully afford to burn the economic house to win the bargaining match.