The Trade War of the Trump Administration and the Future of Global Order

Summary: Trump focused his foreign economic policies on tariffs, aiming to simultaneously increase US fiscal revenue, reduce trade deficits, and promote the return of manufacturing. However, this approach does not conform to the logic of macroeconomic operation. The fundamental reason for Trump's initiation of the global trade war was to safeguard a major pillar of the US's global hegemony - the dominance of the US dollar. Trump bypassed the World Trade Organization and attempted to change the global economic rules through the trade war. Behind this, there also lies the strategic intention of major power competition. In terms of China policy, Trump adopted a negative-sum game strategy, and the Sino-US economic struggle tests the strategic resilience of the two countries. Although the possibility of the Trump administration promoting a complete decoupling with China is unlikely, it will still strive to build "small walls" in high-tech fields to restrain China's development. Trump opposes the current global arrangement, challenges the existing international rules and multilateral system, but has no clear international strategic conception. Under Trump's governance, the United States needs to embrace the global system, and its core demand is that the future international order must operate according to the logic and rules of the United States. However, willingness does not equal ability. The future direction of the global political and economic order depends not only on the outcome of Trump's 2.0 shock but also on how countries around the world respond to this shock. After this, the global order will undergo a long period of transformation.

I.The fundamental reasons and underlying logic behind Trump's global trade war

Question: What are the main goals that Trump aims to achieve by launching the global trade war? Are there any priorities among these goals, and what is the relationship between them?

Answer: Trump focused his foreign economic policy on tariffs because he believed that tariffs could solve multiple problems. Trump launched the trade war with multiple goals: first, to increase tax revenue to make up for the fiscal gap; second, to reduce or even reverse the US trade deficit; third, to promote the repatriation of manufacturing. Trump's trade policy seemingly seemed to be driven by him alone, but in reality, there were multiple interest groups behind it who all wanted to benefit from it. For example, the white-collar working class in Trump's political base had high expectations for the manufacturing repatriation he promised. However, the promotion effect of imposing tariffs on the repatriation of manufacturing cannot be immediate. Even if tariffs can bring hundreds of billions of dollars in additional fiscal revenue each year, for the huge federal fiscal deficit of the United States, this income can at most have a marginal effect.

Trump's tariff policy is inherently contradictory. Trump attempts to solve the so-called trade deficit problem through tariff measures, but this is logically inconsistent in economics. The balance of trade of the United States is fundamentally determined by macroeconomic variables such as domestic savings, consumption, and investment. Excessive consumption while having insufficient savings and investment will directly translate into a trade deficit. In fact, the per capita GDP of the United States exceeds $80,000, which is largely due to the long-standing trade deficit. Also, because of the trade deficit, a large amount of US dollars flow overseas, enabling the US dollar to become the world currency. By providing high-quality financial assets with strong liquidity to the world, the United States is able to mobilize global resources and serve its own production, especially consumption. If the dollars that flow out never return, it would be equivalent to the United States imposing a kind of "international minting tax" on the entire world. In this sense, the trade deficit is precisely the prerequisite for the United States to enjoy the broad sense of "minting tax" benefits. Of course, the excessive increase in federal government debt and the manifestation of trade deficits ultimately erode one of the objects, which is the dominant position of the US dollar in the international monetary system.

Question: What is the relationship between Trump's initiation of the global trade war and his efforts to maintain the dominance of the US dollar?

Answer: Trump's trade policies are actually aimed at maintaining the dominance of the US dollar, which is a key component of the US's global hegemony. The US's hegemony relies on four pillars: military (soldier), culture and values (Hollywood), high technology (Apple), and finance (the US dollar). The first letters of these four pillars form the word "shad", which is also the name of a type of African fish. 

The international status of the US dollar depends on the trust of other countries in it. All countries engage in trade, investment, and asset reserves, and they all require a financial asset that is highly liquid, offers high returns, has strong security, and is abundantly supplied. For a long time, the US dollar has played this important role. Countries cannot rely solely on gold for their international economic activities because its liquidity and supply are far less than that of the US dollar. Especially after the Bretton Woods system collapsed in the early 1970s, there was intense debate within the United States, and many people were worried that if the US dollar no longer pegged to gold, its international demand would decrease. But it turned out that global demand for the US dollar actually increased. US Treasury bonds became the preferred financial asset for all countries, and I call it "fundamental collateral". Moreover, due to the lack of competitors or substitutes, the US dollar was able to dominate the global financial market. Even if a country sold all its US Treasury bonds, what it would get in return would still be US dollar cash. But holding US dollar cash not only offers no returns but also incurs a cost of approximately 0.3%. 

However, currently, there are signs of weakening trust in the US dollar among various countries. Firstly, it is due to the continuous increase in the US debt. Kenneth Rogoff, a professor of economics at Harvard University and former chief economist of the International Monetary Fund, pointed out that the proportion of the US GDP in the global GDP is slowly decreasing, but the proportion of the US debt to its GDP is increasing. This structural imbalance is gradually eroding the international credibility of the US dollar. I call this the "Rogoff Dilemma". Secondly, it is because the US has "weaponized" its monetary and financial system. After the Ukraine crisis in February 2022, the US and EU countries imposed severe financial sanctions on Russia, which made other countries start to worry about the safety of holding US dollar assets. During my recent visits and research, I found that some Central Asian and Latin American countries were also concerned about this. Finally, there have been some potential competitors to the US dollar recently. Firstly, with the enhancement of China's comprehensive strength, many countries around the world are looking forward to the acceleration of the internationalization process of the RMB and its playing a more important role in the future international monetary system. Secondly, in 2020, the EU launched the "Next Generation EU" recovery plan, which for the first time issued 750 billion euros worth of bonds in the name of the EU in the capital market. This move was regarded as an important measure to promote the fiscal integration of the EU. EU countries have a unified central bank and a single currency, but no unified finance. The euro sovereign debt crisis of individual member states once affected the entire EU. Although the signs of the accelerated process of moving away from the US dollar have increased recently, neither the euro nor the RMB is likely to replace the US dollar as the core key currency in the world within the next ten years. After all, EU bonds need to be comparable to US treasury bonds in terms of safety, liquidity, stable return rate and scale, and there is still a long way to go. And the RMB will truly achieve full internationalization and take a longer path.

Question: What kind of impact will Trump's trade war have on the United States? Is it more of an opportunity or a crisis for the United States? Will Trump's approach to some extent change the entire global trade system, as well as the global security system and supply chain system?

Answer: Tariffs are a tool of Trump's foreign economic policy. In a sense, Trump's trade war is a risky move. He wants to achieve a surprise victory. In the long run, what Trump advocates as "Making America Great Again" is essentially an effort to enhance the United States' strength relative to other countries. What he truly cares about is the United States' global hegemony. Trump's strategy is to balance "defending the country from external threats" and "stabilizing the internal situation", with "defending the country from external threats" taking priority in the short term. However, using tariffs to engage in a global trade war by Trump comes with domestic political costs. According to a joint poll conducted by ABC, The Washington Post, and Ipsos in April 2025, Trump's support rate for his administration after 100 days was 39%, down 6 percentage points from February, and it set a record low for the support rate of any US president in the past 80 years during their first 100 days in office. 72% of Americans believe that Trump's economic policies are likely to cause a short-term economic recession in the United States, 53% think that the economic situation in the United States has worsened since Trump took office, and 41% believe that their financial situation has deteriorated since Trump took office. 

For the United States, the recent effects of the Trump trade war have been mixed. Although some countries have made certain concessions and adjustments, Trump's goals have not been fully achieved yet. Moreover, the negative economic impact of tariffs is very obvious. The International Monetary Fund's "World Economic Outlook: A Critical Juncture amid Policy Shifts" report released in April 2025 predicted that the US economic growth rate in 2025 would slow down to 1.8%, 0.9 percentage points lower than the January forecast, with the largest reduction among developed economies, and even the possibility of the US entering an economic recession cannot be ruled out. The report pointed out that the intensification of policy uncertainty, trade tensions, and weakened demand momentum are the main reasons for the downward adjustment of the US economic growth forecast. The International Monetary Fund also lowered the global economic growth forecast for 2025 to 2.8%, 0.5 percentage points lower than the January forecast. Of course, the Trump administration's trade war will also have adverse effects on the Chinese economy, leading to a "double loss". 

It now seems that unless a "major overhaul" is carried out, the current world trade system may not be sustainable. Trump attempted to change the world trade system through trade wars, including altering China's status as a developing country. However, Trump's vision for the future international trade order has only shown some initial signs so far. For instance, Trump and his economic policy team emphasized resisting "overcapacity", considered establishing a tariff alliance, and even proposed issuing a $1 trillion interest-free "century bond", but these ideas have not yet been transformed into mature and clear plans.

Question: Since the Trump administration initiated the trade war, American citizens have continuously held demonstrations to express their dissatisfaction. However, there are few public opponents within the Republican Party, and what's more interesting is that even the Democratic Party members in Congress have not effectively constrained it. During the election campaign, Trump called Biden "Sleepy Joe", and now it seems that the entire Democratic Party has entered a "sleeping state". How do you view this phenomenon in American politics?

Answer: This question reminds me of a report published by The New York Times on January 18, 2025, titled "How the Left Went Astray - A Conversation between Two World-Class Thinkers" (Two of the World's Leading Thinkers on How the Left Went Astray). The participants in the conversation were Harvard University's political philosophy professor Michael Sandel and the renowned French economist Thomas Piketty. The topic was the future of the Western left. Here, we will roughly consider the Democratic Party in the United States and the social democratic parties in Europe as the left. In the view of these two scholars, the biggest political weakness of the Western left lies in the fact that they have allowed the right to monopolize some of the most powerful political emotions, namely patriotism, community, and a sense of belonging. The immigration issue forces people to question the moral significance of national borders and the moral significance of the state as a community of mutual dependence and responsibility. At the same time, the left has not addressed the issues of trade and employment. Trade competition has led to the unemployment of manufacturing workers, and these are the core issues that voters are truly concerned about. The left will not win the competition in terms of identity discourse and immigration issues because the nationalist right is always more persuasive in these areas. Their common view is that the future of left-wing politics will depend on whether they can provide more comprehensive answers to these problems. Although the above viewpoints of the two individuals cannot provide a complete and accurate answer to your question, their opinions are representative.

Question: Against the strong opposition from many economists, why did Trump still insist on launching a trade war? Why was he so determined to use tariffs as a weapon? To what extent did Trump's personal ideology play a role in the decision of the US government to launch a trade war?

Answer: If one merely uses economic logic to evaluate Trump's trade policies, the conclusion would undoubtedly be that he has no understanding of economics and his actions are contrary to the basic common sense of international trade theory. However, if one uses political economy logic to observe Trump's trade policies, one will find that his policy choices almost entirely follow the logic of geopolitical games, simply put, power precedes welfare. Given this issue, I will elaborate on it later. For now, I will not go into detail. As for the Trump administration using tariffs as a basic tool in their policy toolkit, I think there are both reasons related to the structure of the US political system and considerations regarding policy implementation strategies. The US Constitution provides institutional guarantees for the president to exercise executive power, and of course, it also sets the stage for the president to abuse executive power. This is precisely one of the main reasons why Trump has constantly been criticized. Trump himself is generally a decisive and efficient person. Trade is a field where the president can exert significant influence directly. Moreover, he needs to fulfill his campaign promises to satisfy his supporters, and there is also the constantly strengthening belief of great power geopolitical competition between him and his team members. The instrumentalization of tariffs is thus quite logical.

Question: Does Trump oppose globalization on an ideological level?

Answer: When discussing ideology, the first step is to clearly define it. In the context of Western political science, ideology essentially refers to a belief that the current state of the world is not in its most ideal condition and that there is the possibility and necessity for it to become better. According to this definition, Trump is a firm and typical ideologist. In his view, the current situation in the United States is far from optimal, and the reality is very bad. He firmly believes that he can do better and can "make America great again". Trump has publicly stated that the main reason for the current predicament of the United States is not China, but rather the foolish decisions of previous several US presidents and governments, as well as the influence of the "deep state". 

One of the major manifestations of extending ideology to the diplomatic field is the belief that one's own country's social system and values are superior to those of other countries, and that other countries need to adopt or transplant their social systems and values. From this perspective, there are obvious differences between Trump and both the liberalists including some of the Republican establishment and the conservatives. If we must describe Trump's ideology, it can be roughly described as follows: Although the United States, which was once "great", is now riddled with problems and full of crises, with the leadership of a "wise" president, it can completely achieve "greatness again" and transform the "unfair" global arrangements, especially the current international trade system, into a strong guarantee for promoting American prosperity and containing competitors. In Trump's eyes, globalization has caused great losses to the United States, and China has benefited the most from the United States. What Trump needs to do is not to promote changes within the framework of the World Trade Organization, but is likely to choose to bypass or even abandon this system to achieve the change.

Question: The Trump administration has suspended the trade war and initiated economic and trade negotiations with multiple countries. However, it still retains the 10% base tariff and the tariffs on steel and aluminum. How do you assess the intentions of the Trump administration? What changes might occur in the situation 90 days from now?

Answer: For a decision-maker who regards "transactional diplomacy" as the guiding principle, Trump must consider the costs and benefits of making a deal. Holding up the "tariff club" evokes feelings of fear and the pain of being hit by the "club", and it will have different effects at different stages of the negotiation. After demanding exorbitant prices, the "club" gently drops down. Trump, who wrote "The Art of Negotiation", naturally knows that his "bottom price" is likely to be accepted gratefully by some countries. Based on this, for different negotiating counterparts, he also retains the possibility of further raising the price. To put it another way, without much resistance, Trump completed imposing a 10% base tariff and steel and aluminum tariffs on all imported goods from the United States. In the future, this can certainly be depicted as a "great" diplomatic victory. 

As for the changes after 90 days, after multiple rounds of bilateral negotiations with several countries, the United States is likely to reach at least temporary trade agreements with a group of countries. The conditions for these agreements are that the latter either accept higher levels of tariffs, or further reduce tariffs on the United States, or make concessions in reducing non-tariff barriers. At the same time, the United States will actively negotiate with its main negotiating partners to reach a preliminary or temporary agreement. There are at least two "benefits" to doing so: Firstly, it delays time, aiming to avoid a severe price shock to the domestic market of the United States; Secondly, it consolidates the "achievements" already obtained and makes adequate preparations for the next round of negotiations.

Question: What kind of continuity can be observed in the trade war during Trump's second term compared to his first term and the economic and trade policies of the Biden administration?

Answer: The China policy during Trump's second term can be summarized in eight words - "B follows T, and becomes even more severe". "B" stands for Biden, and "T" stands for Trump. The term "becomes even more severe" means that while the Trump administration continued the basic policy towards China of the Biden administration, it would also intensify it further. From Trump's first term to the Biden administration, and then to Trump's second term, even without launching a trade war, the United States has been continuously tightening high-tech export controls and adjusting the international supply chains of key industries. Behind these actions lies the strategic intention of major power competition. With the support and reinforcement of monetary and financial hegemony, the United States can use trade as a tool, by restricting high-tech exchanges and applying high tariffs, to create obstacles for the economic development of its competitors.

In his 2023 book "No Trade Is Free: Changing Course, Taking on China, and Helping America's Workers", Robert Lighthizer judged China's strategic intention as that China aims to take revenge for the Opium War of 1840. The consequences of this statement would be extremely serious. In the United States, a group of people led by Lighthizer, Peter Navarro, and Michael Pillsbury (author of "The Hundred-year Marathon: China's Secret Strategy to Replace America as the Global Superpower") gradually formed a basic understanding of China's strategic intentions. They believed that everything China did was for revenge against the West in the future. Based on this perception of China, trade policies were regarded as a purely utilitarian tool. From this perspective, the Trump administration described the cumulative $6 trillion trade deficit of the United States with China as China's plundering of American wealth.

In theory, trade aims for mutual benefit and win-win outcomes. I and a collaborator are constructing a game theory model to analyze the trade relationship between China and the United States. When both countries open their markets and engage in trade, comparative advantages and relative benefits will arise. In the initial stage, China's GDP was only 10% of that of the United States, with a significant gap. Suppose in each trade process, the United States gains more relative benefits, for example, the United States gets 10 while China gets 8. However, as long as the trade between China and the United States lasts long enough, the GDP gap between China and the United States will continuously narrow until China's GDP reaches 80% of that of the United States. Over the past 50 years since the reform and opening up, China's economy has developed rapidly. Calculated by market exchange rates, in 1980, China's GDP was less than 7% of that of the United States, but by 2021, this ratio had increased to 77%. In recent years, due to the influence of exchange rates and price changes, this ratio has decreased, but currently, China's GDP is still about two-thirds of that of the United States.

Even though the gap in per capita GDP between China and the United States continues to widen, considering that China's population is four times that of the United States, there is still a possibility that the economic totals of the two countries will gradually converge. This trend has caused a strong shock to many Americans, and many Americans have become fearful about it. As the economic strength of China and the United States becomes increasingly similar, strategic competition and mutual dependence intertwine and coexist. Third-party countries begin to feel the pressure of "choosing a side". This means they are likely to adopt a "hedging strategy of playing both sides". If these factors are incorporated into the analytical framework, discussions about the so-called "Thucydides Trap" will arise. In this context, the difficulty of finding an effective and reasonable way for major countries to get along is likely to increase rapidly.

Professor Graham Allison, the founding dean of the Kennedy School of Government at Harvard University, pointed out in his book "Destined for War" that China's rise has caused panic among some Americans. The subtitle of the book is "Can China and the United States Avoid the Thucydides Trap?" (Can America and ChinaEscape Thucydide's Trap?) 。 Allison states in the book that China's strategic goal is to achieve "making China great again". As a civilization with a long and glorious history, China has experienced significant progress in the past. The pursuit of the rejuvenation of the Chinese nation is understandable and acceptable. However, the key issue lies in whether the impact and pressure that China's rapid rise in a short period of time exerts on other major countries can be resolved in a more gradual manner. It can be seen that the real concern of Western elites is: once China becomes the dominant force in the world, what demands will it make on the world, especially how will it treat the Western countries that once enslaved China?

Therefore, we need to analyze the trade war of the Trump administration from the perspective of the current changes in the power balance among major countries and the strategic competition between China and the United States. Former US Treasury Secretary and former Harvard University President Larry Summers once raised an intriguing question in a speech: How will historians view human history in the present era? In his view, the end of the Cold War was merely a third-rate historical event; the civilizational conflict between the Islamic world and the Christian world was also only a second-rate historical event; only the rise of China is a truly first-rate historical event. At least in Summers' eyes, one of the main variables in the century-long transformation is the rise of China.

II.Trump's Negotiation Strategies and Tools in the Trade War with China

Question: How do you evaluate Trump's policy towards China and his logic of power politics during his second term?

Answer: China and the United States are engaged in a century-long game. The game can be classified into three types: positive-sum game, zero-sum game, and negative-sum game. A positive-sum game is mutually beneficial and win-win; a zero-sum game occurs when the total gains and losses remain unchanged, and what you lose is what I gain; a negative-sum game is a double-loss game, where I can suffer losses, as long as your losses are even greater. Economics mainly studies growth or improvement in welfare levels. As long as welfare improves, it is a good thing. When the welfare of others is not affected, even if only a part of the people or even just one person's welfare improves, it can be called a "Pareto improvement". However, the logic of international political economy is different. Because the major goal of major power games is not only welfare but also power. Simply put, it is the ability to make other countries do what they do not want to do but have to do. The improvement of welfare comes from the absolute increase in wealth or products, while power mainly stems from the relative strength gap between countries, covering multiple aspects such as politics, military, economy, and security. The ways to maintain or expand the relative strength gap can be to strive to enhance one's own strength, or to cause the other side to suffer greater losses than oneself. The latter is exactly the game strategy that Trump adheres to. The basic logic of all major geopolitical competitions among countries lies in this.

Question: In your opinion, what are the conditions for the initiation of high-level economic and trade negotiations between China and the United States? How do you view the prospects of the Sino-US trade war? If the Sino-US trade war continues, will the Trump administration use other tools to exert pressure on China? How should China respond to ensure the balance between strategic interests and business development?

Answer: Both China and the United States are competing in terms of their strategic resilience. The ball is in Trump's court. The United States needs to make a choice. If the US wants to engage in negotiations with China, it needs to take the initiative and make some clear and non-offensive gestures. After all, the trade war was initiated by the US. In a sense, negotiation is the art of obtaining the maximum benefit through conditional concessions, or the art of exchanging the minimum cost for the maximum loss of the opponent. When both sides believe that there is a possibility of achieving the above outcomes, the conditions for starting negotiations are met. Here, it is particularly worth noting that whether the game between the two major powers will lead to a complete breakdown also depends on the possibility of a third party reaping benefits. In other words, the possibility of the fisherman reaping profits restricts the brutality of the sparring between the snipe and the clam. I am currently working with my collaborators on a paper titled "The Fisherman Effect" which limits the severity of the fierce competition between the snipe and the clam. The presence of the EU, Russia, Japan or India and their possible opportunistic behavior will constitute important variables in the final consensus-based economic and trade agreement reached by China and the United States.

In terms of alleviating the short-term pain caused by the trade war for domestic enterprises, the Chinese government should play an active role. The Central Committee of the Communist Party of China's Political Bureau meeting held on April 25, 2025, made relevant arrangements, proposing to provide special financing, employment and other policy support to the difficult enterprises currently affected by the Trump trade war. The governments of China and the United States have also respectively exempted "equivalent tariffs" for some key products originating from each other's countries, including some semiconductors and their manufacturing equipment. Although geopolitical games are crucial, the two fundamental elements that support national power are wealth and welfare, which cannot be ignored. Overall, I hold a relatively pessimistic view on the short-term prospects of the Sino-US trade war, because even if the two countries reach some consensus, the "reserved concessions" and excessive demands by the United States mean that the following negotiations will still be extremely difficult. Comparatively, I remain relatively optimistic about the medium- and long-term prospects of the Sino-US economic and trade competition, which is based on my confidence in China's ability to cope with the unprecedented major changes in the century. The Sino-US economic and trade competition is a test of national strategic resilience. As long as the policies are correct, time will be on our side, and this giant ship of China can withstand any shock from fierce waves. 

If the US-China trade war continues, or if the future Sino-US economic and trade negotiations fail to reach agreements that are satisfactory to both sides, the Trump administration will undoubtedly employ a variety of means to exert pressure on China, such as encouraging the Philippines to provoke China in the South China Sea sovereignty dispute, " demonizing " China's actions, exaggerating the so-called "overcapacity" issue, hyping up the origin and claim litigation of the novel coronavirus, etc.

In the face of these possible challenges, China must be well-prepared to deal with them. At the same time, we can also show the United States how to be a truly responsible and accountable major country. China is the country with the strictest drug control policies in the world, and it will continue to crack down severely on crimes involving fentanyl-like substances. China adheres to high-level opening-up, maintains the international trade system, and granting tariff exemptions to some goods from the United States is also a wise move. This is done because China has its own thinking logic and goal pursuits, rather than merely catering to the requirements of the United States. By doing so, all countries in the world will take notice and this will form a joint effort to influence the thoughts and actions of the United States.

Question: At the initiative of the US side, the high-level economic and trade talks between China and the US were held in Geneva, Switzerland from May 10th to 11th, 2025, and significant progress was achieved quickly. Did this outcome exceed your expectations? How do you evaluate the results of this negotiation?

Answer: The high-level talks between China and the United States held in Geneva and the release of the "Joint Statement of the Talks" on May 12th was an inevitable outcome. It is better to talk than not to talk, and it is even better to reach an outcome through talks. Once the outcome of the talks was announced, it triggered positive reactions in most markets around the world. This indicates that as the two largest economies in the world, the actions and choices of China and the United States have an impact on the entire world. It must be noted that although the US made commitments to tax cuts and a 90-day suspension of the tariff war, the tariff rate for Chinese goods exported to the US still rose significantly from 19% at the beginning of 2025. As of May 18th, the average tariff rate has reached as high as 49%, with additional parts including a 10% "equivalent tariff" and a 20% "fentanyl tariff". You should know that before 2018, the average tariff rate for Chinese goods exported to the US was only 3.4%; after Trump launched the trade war during his first term, this figure rose to 19%; currently it is approximately 49%. At the same time, the average tariff rate for US goods exported to China is 31%. If the two countries fail to reach an agreement within 90 days, the US will resume a 34% "equivalent tariff", that is, adding the 24% that was suspended to the 90-day suspension, and at that time, Chinese goods exported to the US will face a tariff rate as high as 73%. Clearly, this level of tariff is beyond the affordability of most enterprises. If we only look at the changes in tariff levels, Trump's trade policy towards China has a considerable degree of "decoupling" implications. We must have a clear understanding of this.

Question: Trump mentioned in the 2024 presidential election that if re-elected, he would push for a "comprehensive decoupling" between China and the United States in multiple key economic areas. Do you think that, given the current trend of interaction between China and the United States, the Trump administration can achieve a "comprehensive decoupling" with China? If the United States continues to move in this direction, will the Sino-US relationship enter a certain "new Cold War" state?

Answer: To answer this question, we first need to define what the Cold War was. The most important feature of the Cold War was that the United States implemented a containment strategy towards the Soviet Union. The containment approach was to isolate each other and not have any contact. The actual result was a "complete decoupling", leaving the targeted party to fend for itself. During the Cold War, there was almost no trade between the United States and the Soviet Union, and the same was true for the policies of the United States towards countries like Cuba and North Korea. Based on this definition, it is unlikely that the Trump administration would push for a "total decoupling" with China and bring the US and China into a "new Cold War", because the cost of such an action would be extremely high. Even if the United States could rebuild some low-end manufacturing industries domestically, it would be difficult to reverse the current global industrial division structure. In the high-tech field, the United States' advantage lies in research and development, while China's advantage lies in industrial application and market penetration. From the perspective of the industrial chain or supply chain, the United States holds the key high-tech "links", while China excels in "link segments". That is to say, China has a large production scale and participates in a longer industrial chain and supply chain. If the United States attempts to confront China, it will need to rely on its high-tech "links" to control China's "link segments" and gradually transfer at least part of the long-chain industrial system China participates in to the United States or its allied countries. It is obvious that achieving this goal would not only significantly increase the cost of the United States itself, but also require time and cooperation from other countries. 

The Trump administration attempted to build a "fortress" in the high-tech sector and push for a "decoupling" from China. But can the US's allies really achieve a complete "decoupling" from China? If third-party countries do not fully cooperate with the US, the difficulty of establishing a parallel system will increase significantly. Moreover, when formulating foreign economic policies, the Trump administration also needs to consider the demands of different interest groups within the US. Although the various political parties and interest groups within the US are relatively consistent in their stance towards China at present, their interests related to China are still diverse. Therefore, they have the motivation to influence the details of the Trump administration's economic and trade policies towards China on specific issues. It is certain that in the next few years, the US will not change the general direction of decoupling from China in high-tech fields. This is both a challenge and an opportunity for China. The most crucial thing is whether we can quickly fill and occupy the high-tech markets that have been "vacated" by the US, the EU and Japan within a short period of time.

Question: In January 2025, the US House Committee on US-China Strategic Competition proposed the "Restoring Trade Fairness Act", demanding the revocation of China's permanent normal trade relations status, and planning to gradually impose tariffs of up to 100% on "strategic goods" from China over a five-year period, and imposing a 35% tariff on "non-strategic goods". This bill has not yet entered the voting process and is facing opposition from both within the Republican Party and the Democratic Party. However, its direction aligns with the Trump administration's "strategic decoupling" strategy towards China. How do you assess the possibility of this bill being passed?

Answer: One of the main reasons why this bill has been opposed by some lawmakers is the seriousness of the legislation. That is to say, once this bill becomes law, it will be difficult to change, and the related procedures will significantly reduce the room for policy adjustments. In contrast, Trump used presidential executive orders to implement tariffs and economic policies towards China, which can retain the flexibility for policy adjustments. Revoke China's permanent normal trade relations status, which is commonly known as "most-favored-nation treatment", in a certain sense, means blocking normal trade between the US and China. Given that the Republicans currently hold a majority in both the House of Representatives and the Senate, the possibility of this bill passing cannot be completely ruled out. Although this bill is highly consistent with Trump's policy towards China in terms of direction, I still think that, in the face of such a radical proposal, even the establishment-minded Republican lawmakers would repeatedly weigh the pros and cons. A more likely scenario is to block the trade of "strategic goods" with China through high tariffs, while imposing significantly higher tariffs on about 90% of the "non-strategic goods" than those during Biden's administration.

Question: Some American scholars have suggested that the United States should establish a new type of tariff alliance, requiring its member countries to boost domestic consumption by raising wages and increase domestic investment in order to achieve overall trade balance. Each member country of this tariff alliance would uniformly impose trade barriers such as tariffs and anti-dumping investigations on non-member countries. Do you think this idea is feasible in reality?

Answer: Regarding trade with China, the United States and some other developed countries share common interests and concerns, particularly regarding the so-called "excess production capacity" issue. Therefore, these countries may be willing to actively consider taking joint actions, including establishing a tariff alliance to exclude Chinese products. However, at least theoretically, the existence of common interests is only a necessary condition for forming collective action, not a sufficient one. In many cases, it is difficult for numerous countries to achieve effective collective action. Various mechanisms can explain the collective action dilemma, such as the "free-rider" phenomenon and externalities, and the metaphor of "three monks without water to drink" is more vivid and illustrative. 

The key to the development of any country lies in adhering to the principle of openness and market economy. In a fair competitive environment, a country should not only focus on technological innovation and improving the skills of its domestic workforce, but also attach importance to the benefits brought by division of labor and specialized production, and actively engage in international trade. Although the trade theories of Adam Smith and David Ricardo did not directly address technological progress, they both emphasized that through division of labor and specialized production and conducting transactions, "trade gains" could be achieved, thereby improving the welfare of all participants. This idea was already reflected in the works of Liu An of the Western Han Dynasty and Sima Qian of the Han Dynasty, as "to exchange what one has for what one lacks, to exchange what one has in abundance for what one has in scarcity, and to exchange what one is skilled at for what one is not skilled at". I will call their viewpoints the "Liu An - Sima Qian Theorem", that is, through division of labor and trade to achieve economic growth, expressed in ancient Chinese as "commercial prosperity". Specifically for the United States, if it aims for sustained economic growth or "becoming great again", especially when it is difficult to convince the opponents in the game or when the negative-sum game strategy fails, it must change its course and return to the track of free trade. One of the basic logics of world economic growth is that each country should develop industries with absolute or relative advantages in its own country, form a reasonable division of labor globally, and ultimately reap as much trade gains as possible. However, the international industrial division structure is not fixed but is constantly evolving, and the competitive situation and relative advantages among countries also change accordingly. 

In the short term, the United States can suppress its competitors by imposing tariffs and setting up other trade barriers, thereby reducing their export earnings and international market share. However, in the long term, the United States' own interests will also be harmed. According to the aforementioned logic, a tariff alliance with a shrinking market size may not only directly reduce trade gains but also protect inefficient industries or enterprises that should have been eliminated by the market domestically, or even promote domestic oligopolies, which is not conducive to the optimization of the economic structure and the enhancement of innovation capabilities. These costs are likely to be at least not fully taken into account in the decision-making process. As for the obvious costs and their potential ripple effects or spillover effects, they may not have been fully evaluated either. The US-China Business Council's 2025 April report, "US Exports to China 2025", pointed out that in 2024, the total value of US exports to China was approximately 140.7 billion US dollars, supporting over 860,000 jobs across the United States. If the United States completely stops trade with China, then thousands of US multinational companies will have to abandon the Chinese market, and US domestic employment will undoubtedly be impacted. If considering the omissions in cost calculation and the associated spillover effects, then who will suffer more damage in the mutually destructive outcome of the trade war is a question that the initiators of the trade war need to seriously consider. From history, there are countless examples of doing something to one's own detriment.

III.Globalization and the Future of International Order

Question: If Trump is merely dissatisfied with the current global arrangements, would he support new global arrangements that are beneficial to the United States instead of adopting an absolute protectionist, economic nationalist or populist stance?

Answer: For the United States to achieve "greatness again", it must once again move towards internationalization and embrace globalization on the existing basis. The United States alone cannot achieve this goal. Only by promoting the adjustment of the entire world economic system to make it more in line with the interests of the United States can it possibly achieve true "greatness". Here, I introduce a concept - "institutional non-neutrality", or "rule non-neutrality", which means that the same system or rules have different consequences for different people, different groups, and different countries. In Chinese terms, it can roughly be compared to "the governor can set the fire, but the common people cannot light the lamp". Although the rules are formally applicable to everyone, they are not neutral: some benefit, while others suffer. Equality before the rules does not mean that the rules themselves are fair, nor does it necessarily benefit everyone.

Rules are of utmost importance. All advantages, capabilities, levels and talents lose their significance without the guarantee of rules. The post-war international system established by the United States was originally aimed at safeguarding its own interests. For instance, the pegging mechanism in the Bretton Woods system, where gold was pegged to the US dollar and all other currencies were pegged to the US dollar as well, made the US dollar the sole key currency in the world. During the operation of these rules, the United States reaped huge "rule benefits" or "system benefits". Now, the United States has less room to profit from the current international rules, and it believes that competitors who are thriving under the current rules have narrowed the overall gap with the United States. At the same time, the international community has begun to question the future leadership of the United States and express dissatisfaction with its frequent abuse of the system hegemony. Against this backdrop, the United States has to make adjustments, striving to change the current rules to protect the existing system benefits and expand future system benefits.

Although the Trump administration's policies have only been in place for a few months, we can still observe some signs of the current US government's efforts to restructure the existing international system. Trump used tariffs as a starting point and initiated bilateral trade negotiations, attempting to drive the construction process of a new international system by reshaping international trade rules. At the same time, Trump employed other methods to change the rules, such as "withdrawing from groups", disregarding the principle of national territorial sovereignty, and requiring allies to assume more responsibilities, etc. The future international rules that the US is seeking to formulate have a core goal of ensuring that the US can obtain resources at the lowest prices globally and maintain its hegemonic position in military, culture, high technology, and the dollar domain.

However, if the United States wants to re-establish international rules, it cannot do so on its own; it must unite with its allies and partner countries.When reconfiguring the international system, how to deal with China has always been a top priority. The United States has two goals that are both interrelated and contradictory.On the one hand, the United States intends to use the new international system to "contain" China. That is, the prerequisite for admitting China into the new system is that China must accept the rules set by the United States, and thereby lock China into a specific position within the envisioned future world map by the United States.On the other hand, the United States is attempting to build a "parallel system" that excludes China, a top-tier competitor, in an effort to isolate China, thereby curbing China's pace of catching up in high-tech fields and reducing the scale of China's international market and the international circulation of the RMB.Having an ideal is one thing, but whether it can be realized is another.

Question: What impact will Trump's economic and trade policies as well as other foreign policies during his second term have on international relations among major powers and the global landscape? What new alliances might emerge in the world, and what are the geopolitical and economic conflict lines?

Answer: The greatest impact of Trump's second term on international relations was that his foreign policy undermined the cornerstone of international relations since 1945, which is the United Nations Charter and the principle of territorial sovereignty established by international law. The era when the winners of wars demanded territorial claims and the losers were forced to cede territory and pay compensation, which ended with the territorial sovereignty adjustments after World War II and the conclusion of national liberation movements, has long become history. After World War II, mutual respect for the integrity of national territorial sovereignty became the basic norm and norm of international relations. However, after Trump returned to power, he repeatedly publicly expressed a strong interest in expanding American territory and explicitly stated that national territory was flexible and variable. He not only expressed territorial demands for Greenland, the Panama Canal, but also for Canada. As the world's largest power, if the United States led by disregarding the principle that national territorial sovereignty is sacred and inviolable, it would be equivalent to challenging the foundation of the existing international order. If the Trump administration really implemented these territorial claims, it would very likely directly affect the positions and methods of other countries in handling their own territorial disputes. In fact, Israel has already taken actions in this regard.

The second aspect where Trump's second term had a significant impact on the global scene is that his foreign policy returned to the true meaning of "great power politics", leading to the gradual decline of multilateral international institutions. In terms of economic and trade issues, Trump believed that the World Trade Organization not only failed to effectively safeguard the interests of the United States but also encouraged the interests and influence of competitors such as China. Therefore, the United States must abandon the WTO and adjust the bilateral economic and trade relations between the United States and other countries through unilateral measures such as imposing tariffs, in order to restructure the global economic and trade system. In the current trade war, although Trump pressured almost all countries, his core concern was only China, and he incorporated the US-China economic confrontation into the logic of great power competition. In the Ukraine conflict issue, Trump chose to bypass Ukrainian President Volodymyr Zelensky and the European Union and directly negotiate ceasefire and peace conditions with the Russian side. This also fully demonstrated his preference for the operation of great power politics. Overall, the diplomatic approach that Trump was passionate about was unilateralism and bilateral interaction between great powers, rather than relying on alliance systems or conducting operations within the multilateral rule system.

What is particularly worth noting is that during Trump's second term, his foreign policy undermined the fundamental consensus among Western countries regarding core value concepts and the construction of international systems, objectively promoting the process of world multipolarity in a way that exacerbated internal rifts within Western countries. Over the past 80 years since the end of the war, the international rule system has always been dominated by Western countries led by the United States. Although internal conflicts within Western countries occur from time to time, the main differences have been concentrated in the lower political domain. However, in terms of core value concepts, international behavioral norms, multilateral institutional arrangements, etc., they have long maintained a high degree of consensus and shared common interests in maintaining the existing international political and economic order. Nevertheless, the Trump administration challenged the existing US-EU consensus on issues such as the Ukraine crisis, NATO defense spending allocation, transatlantic economic and trade relations, territorial sovereignty, and democratic politics. These actions of the Trump administration not only deepened the rifts between the US and European countries but also reflected that the United States is no longer able to skillfully maintain the current international system to safeguard its hegemony and interests. At least during Trump's second term, the United States will find it difficult to repair the differences and rifts with European countries. 

European countries have also responded to this, beginning to deeply discuss how to rearm Europe. French President Macron stated that although Europe hopes that the United States will continue to support it as before, it must also be prepared for a situation where there is no America. In Germany, some even attempted to take advantage of the rift between the United States and Europe to enhance their own strategic autonomy and strive to become a truly "normal country". Japan has similar demands in this regard and is also exploring whether and how to develop its own strategic military power. Against this backdrop, China needs to actively think about how to grasp the actual risks and potential strategic opportunities brought about by the new trends in international relations, and accordingly adjust its policies and diplomatic strategies towards Europe and Japan.

Question: Can the United States continue to play a major role in determining the future direction of the international order?

Answer: As the world's number one power, the changes within the United States itself will affect its international behavior, and subsequently influence the entire world order. The reform promoted by the Trump administration to reduce the size of the US federal government is essentially a strategy that leverages public opinion, using "anti-establishment" political mobilization tactics to enter the system from the outside and attempt to challenge and rectify the structural flaws within the federal government, including excessive bureaucracy, excessive regulation, fiscal waste, and excessive political correctness. Trump and his political advisors are well aware that the American people have long accumulated grievances and accumulated problems regarding the country. US Defense Secretary Pete Hegseth's book "The War on Warriors: Inside the Betrayal of Those Who Keep Us Free" depicts the chaos within the US military caused by the "awakening movement" and excessive political correctness. FBI Director Kash Patel in his book "Government Gangsters: The Deep State, the Truth, and the Battle for Our Democracy" exposes the serious corruption within the US federal government and the political attacks by the "deep state" against Trump supporters, and lists the reform priorities for "cracking down on the deep forces". The first actual head of the newly established Department of Government Efficiency, Elon Musk, has also publicly criticized the serious fraud within the federal government.

Recently, I have been reading the classic work by the Spanish philosopher Jose Gasset, titled "The Revolt of the Masses", which discusses the so-called "mass man" that emerged in Europe in the 1930s and its consequences. In the author's view, these ordinary people were intellectually stubborn and hostile towards responsible elites and institutions. They claimed that mediocrity was a right and demanded to exercise this right. In the early 1930s, the world witnessed a victory of super-democracy - the masses disregarded all laws and took direct action, using voting elections to impose their desires and preferences on society, eventually leading to "tyranny of the majority". Against this backdrop, fascism and Hitler were nurtured and emerged in Germany. This scene is quite similar to that of present-day America. With rampant populism in the United States, a strong leader emerges, claiming to represent the neglected and deprived interests of the masses and leading the forgotten masses in an offensive against the establishment. After reading this book, I revisited Tocqueville's "On American Democracy". In Chapter 7, he specifically discussed "tyranny of the majority", pointing out the potential threat that democracy might pose to freedom. Looking at the United States today, the prevalence of populism is gradually making the country lose its functionality. The dysfunction within the United States not only affects national governance but also weakens its ability to maintain its leadership position in the existing international order. 

Meanwhile, the significant changes in the ethnic composition of the US population are undoubtedly going to have a serious impact on the US democratic political system. According to statistics, in 2013, more than half of the US population under the age of 20 were not white. Many people even predict that by 2030, the proportion of white people in the total US population may fall below 50%. The rise and fall of a country is closely related to changes in its ethnic composition. Professor Yang Guangbin, the dean of the School of International Relations at Renmin University of China, believes that the Western democratic system is mainly applicable to European white people. Once the ethnic composition of the US population undergoes fundamental changes, its political system will face challenges. The same is true for Europe. 

When it comes to whether the United States can continue to dominate the future direction of the international order, the answer largely depends on how we view the current era. The historical ship has entered the era of multipolarity in the world, and the "page of history" where a single major power dominated the world has already been turned. Of course, as the country with the strongest comprehensive national strength in the current world, the United States will naturally play a major role in the formation of the future world order. As for how well this role is played, it depends on the outcome of the impact of Trump 2.0. In the process of internal contradictions in the United States exploding and the continuous expansion of multipolarity in the world, Trump 2.0 has two possible scenarios: it could be the starting point of the accelerated decline of the United States, or it could be the beginning of a new cycle for the United States. A cycle usually implies fluctuations and undeniably, it does not rule out the possibility of the United States experiencing a resurgence of its national strength at some point in the future. However, to be realistic, it is too early to judge the outcome of the impact of Trump 2.0 on the international order and the overall trend of the international order in the future.

Question: Does the Trump administration have a clear view on international order? How is it different from the concept of the Biden administration? And how will the United States act after the Trump administration?

Answer: The international order perspective of the Biden administration is very clear. The core idea can be glimpsed from the paper "America's New Great-power Strategy" published by Professor Joseph Nye, a retired professor from Harvard University, in 2021. Nye pointed out: "If the United States, Japan, and Europe coordinate their policies, they will still occupy the largest share of the world economy and have the ability to build an international order based on rules that can shape China's behavior. This alliance is the strategic core for dealing with and controlling China's rise." My interpretation of this is that the Biden administration intends to unite Western countries and form a strong competitive advantage against China, making China realize that "those who cooperate will thrive, those who oppose will perish" - China must cooperate with the United States, otherwise the biggest loser will be China. Nye defined the relationship between China and the West as "both cooperation and rivalry" in the article. In the Chinese context, cooperation means mutual benefit and win-win results. However, in the English context, the meaning of cooperation is broader. In game theory, a "cooperative game" refers to that all parties in the game abide by common rules and accept the judgment of the referee. If China "does not cooperate", that is, does not accept the rule system led by the United States, it will suffer the consequences. The Biden administration released the "National Security Strategy" report in October 2022, and its perspective is basically consistent with Nye's viewpoint. By the way, this report states that the world has entered the initial stage of a decisive decade for major power geopolitical competition. What is meant by "decisive decade"? I understand it as that the outcome of major power competition will be determined in the next decade.

Currently, the Trump administration adopts a negative-sum game strategy in its grand strategy, aiming to impose greater costs on its rivals by challenging existing basic international rules and the multilateral international system. However, it has not proposed a clear and complete vision for a new international order. Trump's unilateralism has left a deep impression on the world and has become his unique diplomatic policy label. However, it should be noted that he has not completely abandoned allies and the international system. In a speech at the International Finance Association, Scott Bessent, the Treasury Secretary of the Trump administration, clearly stated, "America First" does not mean that the United States will fight alone; instead, it means that the United States will be more actively involved in the international economic system and seek to expand its leadership position in international institutions such as the International Monetary Fund and the World Bank, in order to restore the "fairness" of the international economic system. It can be seen that under Trump's governance, the United States still needs an international order and cannot completely "withdraw from the group", and its core demand is that the international system must operate according to the logic and interests of the United States.

In the latter half of Trump's second term, the Trump administration may adjust its current policies and moderately ease tensions with its allies. Even so, I am deeply skeptical about the effectiveness of its possible efforts to mend things, because at least for now, the mainstream in Europe's academia, industry, and government may not be receptive. It is more likely that the next US president, whether a Republican or a Democrat, will do their best to mend the relationship between the US and its allies and strive to jointly promote the establishment of a new international system. This new system is characterized by a "dual-track structure", namely the "regulatory lock" and the "parallel" structure I mentioned earlier. The "regulatory lock" refers to the fact that the US and its allies accept the participation of real and potential competitors in the non-neutral international rule system set by them, which better reflects and guarantees their maximum interests, and at the same time, through the rules, lock the behaviors and interests of the opponents. If the opponents refuse to be "regulated" or the "regulation" fails, then the "parallel track" is activated, that is, to establish an intersecting "parallel system" to exclude the opponents from the system and isolate them from the periphery. The real intention of the US is to build two walls: in the field of trade and investment, create an unbalanced "parallel system" (unbalanced parallel system), forming a "big courtyard high wall" aimed at isolation; in the high-tech field, create a "small courtyard high wall", ensuring that the US and its developed economy allies monopolize the results of scientific and technological innovation. Of course, the good plan also requires support from means. One important insight I got from Hans Morgenthau's "International Politics: Power Struggles and Peace" is that if there are no means to achieve the goal, it is equivalent to having no goal.

Question: In your opinion, how should China participate in future international governance?

Answer: We are currently in an era where global turmoil and transformation are intertwined. We particularly need to seriously consider what kind of international system would be more in line with China's interests. This provides us with a clear direction for contemplating the evolution of the future international order. To build a community with a shared future for mankind, a corresponding international order or rule system must be in place as a support. This requires us to conduct more comprehensive and in-depth strategic thinking and institutional design.

Facing Trump's "America First" foreign policy, China must not only firmly safeguard its own interests but also represent the common interests of the vast majority of countries in the world, especially those of the BRICS countries and the "Global South" countries. The pursuit of the great rejuvenation of the Chinese nation is about success, not victory. Victory is often relative to the opponent, and it is based on the failure of others or other countries. Success is mainly relative to oneself, meaning continuous prosperity and progress of oneself. On the Tiananmen Gate Tower in Beijing, there are two eye-catching slogans: "Long Live the People's Republic of China" and "Long Live the Great Unity of the World People". These two slogans represent the basic concepts and fundamental principles of China's domestic and foreign policies, reflecting China's demands for national development and people's well-being, as well as its understanding and aspiration for world peace and the prosperity of civilization. We are and will continue to move forward along this path. (Author: Zhang Yuyan, Member of the Chinese Academy of Social Sciences (CASS), Professor of the School of International Politics and Economics at the CASS University)