“If war is what the US wants, be it a tariff war, a trade war, or any other type of war, we’re ready to fight till the end.” These are fighting words from China, released on March 3 in response to President Donald Trump’s tariff war. It is incredibly alarming that China, a nuclear power, is saying: “I’ll see your trade war and, if you dare, raise you a hot war!”
Almost two months later, Trump blinked first.
Speaking to reporters in the Oval Office on April 23, Trump said the tariffs on China would “come down substantially, but it won’t be zero”. China called Trump’s bluff. The straw that broke the camel’s back was that the CEOs of the three major US retailers told Trump that prices would go up, and the shelves would be empty.
The numbers are readily available: in 2024, the US accounted for 14.7% of China’s total exports, a decrease from about 19% in previous years. For the Chinese, losing 14.7% of the export market will be painful, but not existential. In other words, China can grin and bear it. With a spluttering domestic economy that never did recover from the Covid pandemic, the escalated trade war provides a good excuse for the economic slump and a way to rally the population against a common enemy.
Xi Jinping didn’t sit back to twiddle his fingers. His administration had long anticipated and prepared for a US showdown – ever since Barak Obama first declared the “Pivot to Asia” in 2011, with continued adversarial trade policies by Trump 1.0 and Joe Biden’s administrations. As the show-down began, China’s commerce minister, Wang Wento, called South Africa’s minister of trade, industry and competition, Parks Tau, in the context of South Africa’s G20 presidency, to discuss strengthening China-South Africa economic and trade co-operation and leveraging multilateral platforms such as the G20 and Brics. Wang also called Malysia’s minister of investment, trade and industry in his capacity as the rotating chair of the Association of Southeast Asian Nations (Asean).
Major news outlets are portraying the US as the irrational man-child while China is the adult in the room. The tables have truly turned; China is now the one lecturing on the importance of a rules-based global order and the US is almost universally condemned.
The art of the deal
Two existential issues are driving the Trump administration’s agenda, which account for Washington’s urgency in recalibrating the US trading posture.
First, the fiscal crisis. As leading historian Niall Ferguson wrote in February 2025, the US has reached the “Debt Nexus.” Historically, when debt servicing exceeds defence spending, this indicates a great power in decline. In 2024, the US spent $870bn on interest payments, exceeding the $822bn in defence spending.
Second, despite internet memes poking fun at the US for wanting to assemble toys and sew T-shirts in the US, a hollowed-out manufacturing base is a deadly national security crisis. The US won both world wars by out-producing Germany and Japan when it came to tanks, ships and bombers. Today, the US only builds five ships a year compared to China, which has 50% of the global share of the shipbuilding market. If a major war were to break out, unlike during World War II, the US does not have Ford car factories to convert to tank factories.
If it does not wish to surrender the title of global hegemon to China, the Trump administration must act fast. It must reduce the trade deficit, bring down the national debt and reindustrialise the American rust belt. Starting a trade war with China accomplishes both.
Trump’s negotiation tactic – his art of the deal – is to start with a stupidly big ask, and once the shock subsides, the other side is more willing to concede aspects that, by comparison to the initial ask, appear not so great. Hence the stupidly huge opening gambit of 125% tariffs. Compared to 125%, 30% or 40% is not so unreasonably high after all.
A titanic battle
The twin existential crises of debt service burden and hollowed-out manufacturing base also neatly account for Trump’s foreign policy. Trump sees the folly of foreign wars. For example, the US spent $1-trillion and 20 years in Afghanistan with nothing to show for it, as the Taliban is again in control. Similarly, American participation in the war in Ukraine, even its participation in Nato, from the Trump administration’s perspective, is equally meaningless.
For Trump, China is the real peer competitor and serious adversary that can threaten the US. Ukraine and Europe are not a central security concern for the US, especially given the current circumstances of limited resources.
Given the long history of conflict between Russia and China, and the universal truth that my enemy’s enemy is my friend, it is in the US’s interest to drive a wedge between Vladimir Putin and Xi and build a new US alliance with Russia. This calculation explains why we are seeing Trump doing all that he can to cosy up to Russia, much to the chagrin of Nato allies.
Like watching a Grand Slam final between Roger Federer and Rafael Nadal, we are witnessing a titanic battle between the US and China. They are truly having a ding-dong match. On the one side, Trump is rejigging US global trading relationships and re-evaluating traditional security alliances to better arm the US against the Chinese challenge. Conversely, China is not backing off one inch and is stressing partnerships with Asean and Brics, sending signals to the EU and Canada that it, not the US, is the reliable partner.
From South Africa’s perspective, we need to follow the example of other middle powers and tread the waters carefully. We should leverage our Brics ties to the global South and G20 ties with the developed world for maximum political and trading advantage.
Dr Steven Kuo directs the Afro-Asia programme at the department of international relations, Wits University.
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