The United States and China are on the brink of a full-blown trade war once again—and this time, things might get messier than ever. With former President Donald Trump threatening to slap tariffs of over 100% on Chinese imports starting April 9, and China vowing to “fight to the end,” the world is watching as the two largest economies gear up for a high-stakes showdown.
But what does this all mean for everyday people, businesses, and countries around the globe? Let’s break it all down in a way that actually makes sense—no jargon, no charts—just straight talk.
Trade Between the Giants: A Massive Flow of Goods
When we talk about trade between the US and China, we’re talking about hundreds of billions of dollars. In 2024 alone, the two countries exchanged goods worth around $585 billion.
But here’s the catch: the US bought way more from China than it sold back. China sent about $440 billion worth of goods to the US, while the US only exported $145 billion back to China. That left the US with a trade deficit of $295 billion—basically, the US spent a lot more on Chinese goods than China did on American ones.
That trade imbalance has long been a sore spot, especially for Trump, who claims it’s hurting American jobs and industry. While the deficit is huge, it’s nowhere near the $1 trillion figure he’s been throwing around. Still, it’s a big deal in terms of economic politics.
Tariffs, Trade Barriers, and Sneaky Workarounds
Trump first hit China with tariffs during his earlier presidency, and surprisingly, Biden didn’t reverse them. In fact, he added even more. These actions helped shrink the share of US imports from China from 21% in 2016 to just 13% last year.
But here’s where it gets tricky.
Chinese manufacturers have been clever. Rather than shipping products directly from China, they’ve been setting up shop in countries like Malaysia, Thailand, Vietnam, and Cambodia. They build the goods there and then ship them to the US, dodging some of the heavy-duty tariffs.
Take solar panels, for instance. The US slapped a 30% tariff on Chinese-made panels back in 2018. But by 2023, the Commerce Department found that Chinese companies had just shifted their final assembly to nearby Southeast Asian countries. The goods were still mostly Chinese but came through different routes. This kind of maneuvering has made it harder for tariffs to really “bite.”
So now, the US is threatening to place reciprocal tariffs on those middleman countries too. The result? A rise in prices across the board, especially for everyday products that trace their roots back to China.
What They Trade: From Smartphones to Soybeans
It’s fascinating to see what exactly moves between these two nations.
What the US Sends to China
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Soybeans: One of the top US exports to China, mainly used to feed China’s 440 million pigs.
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Petroleum and pharmaceuticals also make the list, showing how broad the US’s exports really are.
What China Sends to the US
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Electronics, computers, and toys are shipped in massive volumes.
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Smartphones top the chart—9% of all Chinese imports to the US fall under this category.
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Many of these phones are made for American giants like Apple, which relies heavily on Chinese manufacturing.
Now here’s the kicker—if tariffs shoot up to 100%, the prices for these products could skyrocket, not just by a little, but potentially five times more than the current levels.
And let’s not forget that China has its own tariffs on American products. This means American goods will also become more expensive in China, hurting not just businesses but everyday Chinese consumers.
A War Beyond Tariffs: The Battle for Resources and Technology
Tariffs are just one way these two countries can go head-to-head. There are other, subtler strategies that could turn up the heat.
For instance, China plays a critical role in processing vital metals—think copper, lithium, and rare earth elements. These materials are essential for building everything from smartphones to electric cars.
In a power move, China could restrict exports of these metals, especially to the US. It’s already taken steps like this with germanium and gallium, metals used in military tech.
On the flip side, the US could tighten its grip on advanced technology, especially semiconductors. These microchips are crucial for artificial intelligence and cutting-edge electronics—and China still relies on outside help to get them. The Biden administration had already started restricting access, and Trump’s team seems keen to go even further.
In fact, Peter Navarro, Trump’s former trade advisor, even suggested the US might pressure other countries like Mexico and Vietnam to stop trading with China if they want to stay in America’s good books.
Why This Fight Isn’t Just About the US and China
Now here’s where it gets really important.
Together, the US and China make up around 43% of the global economy. If both economies slow down or hit a recession because of this trade war, the effects could ripple across the world.
Other countries could see:
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Slower economic growth
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Lower investment
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Rising unemployment
And there’s more.
China, being the world’s biggest manufacturing powerhouse, exports more than it consumes. It’s sitting on a goods surplus of nearly $1 trillion, and a lot of those products are priced below production cost because of government support.
If Chinese companies suddenly can’t sell to the US, where do you think they’ll go? They’ll look elsewhere—Europe, South America, even the UK. That means cheap products could flood other markets, which sounds great for consumers… but terrible for local industries.
For example, the UK Steel industry is already warning that excess Chinese steel could be dumped in the UK, leading to job losses and wage cuts.
The Bigger Picture: What’s at Stake for Everyone
An all-out trade war between the US and China wouldn’t just be a political clash—it would be a global economic earthquake. Prices for goods could soar, supply chains might crumble, and everyday people could feel the squeeze no matter where they live.
Whether you’re in New York or New Delhi, the choices these two countries make could hit your wallet, your job, and your access to everyday goods.
So while the headlines focus on Trump, tariffs, and trade deficits, the real story is this: when the world’s two biggest economies go to war—everyone feels the shockwaves.
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