Originally published at: 关税高墙下的作茧自缚——评中美第二次贸易战 – 曙光
Self-Entrapment Under the High Tariff Wall — Analyzing the Second US-China Trade War
Editorial Department of the League of Struggle for the Emancipation of the Proletariat
February 1, 2025, before the presidential throne was even warm, US President Trump hurriedly announced a 10% tariff increase on all goods imported from China[1]. In response, China also announced on February 4 that it would start imposing tariffs of 10%-15% on a large number of US goods within a few days. Since then, both sides have continuously raised tariff barriers, expanding the scope of impact. As of May 10, both the US tariff rates on Chinese goods and China’s tariffs on US goods exceeded 125%. Moreover, under China’s countermeasures, many American companies’ operations in China have been severely affected—Google faced an "antitrust investigation" by China, PVH Group (the world's second-largest apparel group), Inmuna (a biotech giant), Leidos (a military-industrial giant), and Skydio (the largest US drone manufacturer) were all listed on China’s "Unreliable Entity List," facing fines and sanctions that prohibit them from engaging in import-export trade or investment in China.
To date, the second US-China trade war has lasted more than three months, and in both scale and intensity, it far exceeds the first trade war initiated by Trump during his first term. Why did the US rush to wield the tariff stick against China at the beginning of Trump’s presidency? Why did China respond so firmly? Behind these questions lies the escalating contradiction between the two imperialist powers, which fundamentally reflects the disintegration and impending demise of the world capitalist system. If we do not attribute the cause of this trade war to various incidental factors—such as Trump’s "personal character," differences in "political systems" between China and the US, temporary economic downturns—then we must recognize that the temporary end of the first trade war itself inevitably means that a new economic war will break out again between China and the US.
"Many believe that imperialist pacifism is a tool for peace. This is fundamentally wrong. Imperialist pacifism is a tool for preparing war, a tool that uses hypocritical words of peace to cover up preparations for war."[2]. This principle applies not only to imperialist military wars fought with guns, cannons, airplanes, and tanks but also to imperialist economic wars fought with commodities, tariffs, and currencies. The "handshake" after the first US-China trade war was not aimed at achieving permanent "open cooperation" or "mutual benefit." On the contrary, it was a compromise made under conditions where both sides (mainly China’s social imperialism) had already distinguished themselves but could not thoroughly defeat or surpass each other in the short term. It was a temporary agreement to accumulate strength and prepare for a more intense struggle to seize markets. Reviewing the history since the end of the first trade war, we can better understand the causes, nature, and future development directions of the second trade war.
Deceitful Truce and the Hidden Strategy
In 2010, China’s industrial output surpassed that of the US. China became the world’s largest industrial power, marking the beginning of its gradual overtaking of the US in economic strength and challenging its hegemonic position across various fields. After experiencing severe overproduction of steel, aluminum, and other building materials caused by declining real estate development from 2014 to 2016, China adopted the so-called "industrial transformation and upgrading" policy, focusing on "capacity reduction" and "inventory clearance" in old industrial sectors, and investing heavily in emerging industries such as new energy vehicles, lithium batteries, and photovoltaic cells ("the new three"). Between 2017 and 2018, China’s industrial added value growth rates reached 10.3% and 12.4% respectively[3]. Meanwhile, cheap Chinese goods flooded into the US. In 2018, the US trade deficit with China reached $337 billion, accounting for over 50% of its total trade deficit, far exceeding the combined deficit with Mexico, Germany, and Japan ($193 billion). To maintain its hegemonic status and break China’s rapid economic growth, the US launched its first trade war against China in the second year of Trump’s presidency, leveraging its position as China’s largest overseas market[5] and controlling Chinese chip supplies[6].
Trends in the proportion of manufacturing value-added of the major imperialist countries
On January 15, 2020, China’s Vice Premier Liu He led a delegation to the White House East Room to sign the "Economic and Trade Agreement between the Government of the People’s Republic of China and the Government of the United States of America" (referred to as the "Phase One Trade Agreement"), marking a temporary pause in the first US-China trade war. This treaty signified China’s setback—although the US reduced tariffs on some Chinese goods (shoes, hats, clothing, etc.), it still maintained high tariffs on $370 billion worth of goods (accounting for 86% of China’s total exports to the US before the first trade war in 2017); China was also prohibited from devaluing the renminbi for price competition[7], and from being forced to transfer technology to US companies (in name, both sides are not allowed to force technology transfer, but in practice, due to the US’s advanced scientific and technological level far surpassing China, it is essentially a unilateral ban on China’s theft of US technology). Additionally, China was required to purchase at least $200 billion worth of US agricultural products, energy, and other goods and services over the next two years (including transportation, insurance, and other sectors in international trade).
"Russia is not angry; she is accumulating strength." This summary of the policy of Tsarist Russia, defeated in the Crimean War in the 19th century, also applies to China, which failed in the first trade war in the 21st century. Although China’s core demands for removing tariffs and barriers were not realized, US demands for China to cancel subsidies to export-related industries and stop stealing advanced technology through cyber and trade means were also unfulfilled. Therefore, this failure did not shake China’s fundamental position. First, as a social imperialist country, China’s characteristic is highly developed state monopoly capitalism. This enables it to quickly recover strength and resume its struggle to compete with US imperialism in the global market. In China, with the usurpation of socialist state power by the bourgeoisie, the state-owned means of production in the form of public ownership have degenerated into bureaucratic monopoly bourgeoisie ownership. The original socialist state enterprises and state departments managing the national economy are controlled by a small clique of bureaucratic monopoly capitalists. Under these conditions, China’s social production and capital concentration reached a high level early on, and monopoly capital was closely integrated with state power: key sectors such as transportation, communications, and military industry are entirely controlled by a few state monopolies, which are unified under a giant conglomerate in the form of the State-owned Assets Supervision and Administration Commission (SASAC). Through monopoly organizations at all levels, the bureaucratic monopoly bourgeoisie gained control far exceeding that of other imperialist countries. Especially in exports, China can directly subsidize enterprises through national finance, enabling Chinese goods to gain a huge competitive advantage in the international market at subsidized low prices. For example, the "export tax rebate" policy[8] saw the annual rebate amount grow rapidly from 1.4 trillion yuan in 2020 to 1.9 trillion yuan in 2024[9]. In recent years, China has also provided substantial financial aid and tax reductions to emerging sectors such as new energy vehicles, lithium batteries, and photovoltaic cells. In the field of new energy vehicles, from 2018 to 2022, China’s support to top monopoly capital BYD alone amounted to as much as $3.7 billion[10].
China’s new energy vehicle production (units: ten thousand vehicles) from 2012 to 2024
Under such political and economic conditions, China’s emerging industrial sectors have rapidly accumulated capital, reaching top positions in their industries. These new enterprises, often newly established with relatively small capital and short history, do not worry about fixed capital depreciation when updating equipment. With government support, they can cooperate with monopolistic enterprises of old imperialist countries, adopting the latest scientific and technological achievements immediately after establishment, and rapidly increasing fixed capital to improve labor productivity, gaining a significant competitive edge. When the first trade war started in 2018, China’s new energy vehicle output was only 1.15 million vehicles annually; by 2024, this number had soared to 12 million—more than ten times the original[11]. In the same year, China’s photovoltaic module capacity had already occupied 77% of global capacity, establishing an undisputed monopoly position. In summary, with policies of state monopoly capitalism and advantages as a new imperialist power, China has achieved Lenin’s concept of unbalanced, leapfrogging development, quickly restoring its strength to compete anew with US imperialism. Correspondingly, China’s goods exports, after the first trade war, expanded even more rapidly. In 2024, China’s total trade surplus increased to $992.16 billion, reaching an all-time high.[12]
Meanwhile, on the other side of the globe, American capitalism’s industry is irreversibly declining. As an old imperialist power, the US once formed more than a dozen extremely large financial oligarchies over a century, controlling industries through monopolies. These monopolies control vast amounts of monetary capital, but the increasing organic composition of capital and declining average profit rates caused by struggles of the US working class made domestic investment less profitable. Therefore, these monopolies prefer to export idle capital to economically backward countries or colonies with lower land rent, raw material, and labor costs to earn high profits. Meanwhile, due to its monopoly position in the domestic market, US monopolies can plunder large monopolistic profits from US consumers through monopoly prices without risking depreciation of existing capital by updating fixed assets. As a result, the US has completely lost the ability to compete with China, which applies the latest scientific and technological advancements while suppressing wages. For this reason, recent policies like "manufacturing return" launched by both Trump and Biden governments to prepare for imperialist wars and stimulate domestic growth have failed. With slow economic growth, the share of manufacturing in US GDP continues to decline: in 2023, manufacturing accounted for just over 10%, and by November 2024, only 8.1% of the total employed population worked in manufacturing. As a key sector of US manufacturing, in 2024, US car production was only 10.56 million vehicles, only one-third of China’s production. The US mistakenly believes that relying on tariffs and traditional hegemony can always override the laws of uneven development of imperialist capitalism, suppress China’s strength, and maintain its world dominance, but this is futile.
"In the era of imperialism, when the gap between rich and poor among nations is astonishing, no tariff policy can be effective."[13]. Even if Chinese goods cross oceans and barriers, they are still much cheaper than most US-made products.[14] "Their low prices are the heavy artillery they use to destroy all the Great Walls..."[14]. After the first trade war, despite the US maintaining tariffs on Chinese goods, its trade deficit with China increased from about $316.9 billion in 2020 to about $404.1 billion in 2022[15].
The declining trend of US industry
As China and the US’s relative strength shifts, internal contradictions within China also intensify, prompting a renewed confrontation with US imperialism. After the political and economic crises during 2020–2022 caused by the COVID-19 pandemic, China’s economy is in a critical condition: domestic economic growth remains sluggish, proletarian income levels rapidly decline, small bourgeoisie and even large bourgeoisie face bankruptcy, leading to a prolonged inability to restore consumption, with large surplus of goods. According to official statistics, in 2024, China’s automobile production exceeded 31 million units, but domestic sales were only over 25 million—despite an utilization rate of only 51%[16]. China’s state monopoly capitalism has rapidly fostered a number of monopolistic enterprises in emerging sectors, but these monopolies have not eliminated competition within their industries—in fact, competition has become fiercer. These companies, adopting new production technologies, have higher capacities, but the increasingly impoverished workers find it harder to consume their own products. To compete for the domestic market, monopolistic capitalists in emerging sectors resort to price wars, even selling at a loss. As a result, almost all new emerging sectors are suffering huge losses—only BYD and Li Auto in the new energy vehicle sector are profitable in 2024. The rapid expansion of production capacity conflicts sharply with the shrinking domestic market, forcing China to increase exports to colonies and other imperialist countries, trying to transfer surplus goods abroad to ease the severe overproduction crisis. As a result, "Made in China" products are "selling well" overseas—solar panels in Middle Eastern deserts, Chinese lithium batteries in Tesla’s electric cars, and Chinese electric vehicles flooding foreign markets like a plague. For a time, Chinese capital seemed to dominate the global industrial system.
Storms Brewing — US Imperialism Strikes Back Again
However, American imperialism is ultimately a "centipede that, even when broken, does not die." As an unshakable number one imperialist power, the United States still possesses considerable strength politically and economically. Its hegemonic position as a superpower allows it to mobilize international capitalist forces to launch various forms of encirclement against China and revisionism. During the four years from 2021 to 2024, despite the ruling party changing to the Democratic Party led by Biden, the needs of the American monopolist bourgeoisie to continue the imperialist struggle against China and revisionism have not changed. Biden's policies towards China and revisionism are hardly distinguishable from those of Trump during his first term. Although a comprehensive trade war has not been reignited, tariffs and barriers still exist, and Biden has reiterated his determination to unite all allies to launch a siege against China and revisionism.
In December 2020, before taking office, Biden publicly declared he would not cancel tariffs on China, stating "we will work with our allies to contain China"; in September 2022, the U.S. extended the period for additional tariffs on Chinese goods; on May 14, 2024, the U.S. further significantly increased tariffs on China's "new three items"—raising tariffs on Chinese electric vehicles from 25% to 100%, increasing tariffs on Chinese solar cells from 25% to 50%, and planning to impose a 50% tariff on Chinese photovoltaic modules, severely complicating China's export of goods to the U.S. Biden's series of countermeasures, especially the sudden increase in tariffs during his last year in office, fully reflect the panic of the Biden administration in the face of China's heavy assault with cheap goods, continually escalating tariffs in a vain attempt to raise barriers higher and higher to block Chinese exports.
2018–2025年中美关税税率变化
Meanwhile, other imperialist countries outside of the U.S. are following in its footsteps, tightening their encirclement of China and revisionism. For several old imperialist European countries, China's cheap goods, especially new energy vehicles, have also seriously harmed their domestic industrial monopolist interests. They have long been furious about China's aggressive expansion into European markets. On September 13, 2023, the EU accused Chinese new energy vehicle companies of excessive subsidies by the Chinese government, dumping electric vehicles into Europe at extremely low prices, defeating many European automotive capitalists, which is contrary to "fairness." They launched a so-called "anti-subsidy investigation" into Chinese imports of electric vehicles. On October 4, 2024, after a year-long "anti-subsidy investigation," the EU officially announced tariffs on Chinese electric vehicles, imposing an additional 35% tariff on top of the existing 10%, making it much harder for China to export these goods to Europe. Moreover, from building materials to consumer goods, China's exports to the EU have generally faced anti-dumping investigations. Even when China waves its imperialist ancestors' old flag of "free trade" to make a loud fuss, it cannot stop the EU and the U.S. from jointly resisting Chinese goods in order to protect their own markets. China's dream of dominating the European market has finally been shattered helplessly.
The obstacles faced by Europe have also extended to China's exports to its colonies, where Western imperialist puppets have also launched resistance. Mexico, from August 2023 to April 2024, repeatedly imposed tariffs ranging from 15% to 80% on Chinese steel, textiles, and other goods, and announced that starting January 2025, it would impose a 16% "value-added tax" on all goods sold on foreign e-commerce platforms, striking a blow to China's monopolist commercial capital, Pinduoduo's overseas brand TEMU. On June 8, 2024, Turkey announced a 40% tariff on Chinese electric vehicles; Saudi Arabia later announced on December 3, 2024, anti-dumping duties of 18.12% to 34% on imported sulfonated naphthalene formaldehyde (a concrete additive); on November 29, 2024, Vietnam announced the abolition of duty-free policies for low-cost imported goods and implemented a "value-added tax" from July 1, 2025, raising the rate from 8% to 10%, with overseas e-commerce platforms required to withhold taxes for sellers.
All these previous series of measures made it unsurprising that the Trump administration, upon taking office, launched a heavy crackdown on China's exports. This merely revealed that the fangs exposed by the Biden administration were actually turned into bloody jaws after Trump took office, and that China's attempt to export surplus goods to overseas markets was met with a heavy blow from U.S. imperialism and its allies. This is an inevitable trend of escalating conflicts within imperialist countries, each fighting to maintain its own rule. Since China's domestic economy remains sluggish, increasing exports abroad to ease overproduction contradictions is unavoidable. And since U.S. imperialism resolutely refuses to abandon its own domestic and overseas colonial markets, its pursuit of encirclement and blockade of China is also inevitable. This series of imperialist economic struggles ruthlessly exposes the falsehoods of China's so-called "community with a shared future for mankind" and "China-U.S. couple theory," dividing the world into two major imperialist blocs, with imperialist rivalry becoming increasingly intense and evident. As long as one has at least a basic understanding of the international situation, it is clear that a larger and more destructive trade war between China and the U.S. is imminent.
It is a pause, not an end — the "unfinished" second trade war
If one were to summarize the purpose of Trump's second trade war in one sentence, his own words would suffice: "If you want your tariffs to go down to zero, then produce your products in the U.S." After the first trade war ended, the U.S. not only failed to reduce its trade deficit with China but also saw its deficits with other countries grow larger. By 2020, the U.S. had a trade deficit of about $680 billion; after four years, this figure not only did not decrease but soared to $1.2 trillion, nearly doubling. U.S. industrial monopolist capital could not compete with China's emerging industrial products, nor with Southeast Asian textiles, and even machinery and equipment had to be imported in large quantities from the EU. The domestic market was flooded with cheap goods from around the world, severely damaging the interests of U.S. industrial monopolists. Therefore, the Trump administration did not only target Chinese exports but also quickly produced a detailed "tariff increase list" shortly after taking office. This list, from U.S. imperialist "allies" to remote islands inhabited only by penguins, imposed a 10% tariff increase on regions with trade surpluses with the U.S., using a crude "reciprocal formula"—dividing the U.S. trade deficit with a country by its total exports to the U.S., then halving the result to determine the "reciprocal" tariff rate (see footnote 19).
Trade war has emptied the shelves
However, the "equal treatment" imposition of high tariffs was not the true goal of the Trump administration. Most of the industrial monopolist capital within U.S. imperialism is multinational corporations that export large amounts of capital to neighboring countries, especially Latin American colonies, to exploit cheap labor. Many products, such as auto parts, are often produced in colonies and then transported back to the U.S. for further processing. Imposing high tariffs on these countries would only raise production costs to even more abnormal levels, harming industrial monopolist interests. Moreover, as imperialist parasitism intensifies, the U.S. cannot sustain itself without cheap raw materials from colonies, making it impossible to arbitrarily impose tariffs on colonies. Therefore, most of this large tariff plan was unlikely to be implemented from the start. Even the tariffs faced by Latin American countries like Brazil, Argentina, Chile, Colombia, and Peru (10%) are far lower than those of the U.S.'s main "trade partners" in Europe and Asia (20% or 30%). As Trump himself admitted earlier, the "Day of Liberation tariffs" only target imperialist countries capable of capital export. The reason why U.S. imperialism wildly brandishes tariffs after Trump took office is to coerce other imperialist countries within its bloc to increase their investments in the U.S., aiming for so-called "manufacturing return." Major U.S. sectors—Ford and General Motors in industry, Walmart and Amazon in commerce—are firmly controlled by domestic monopolist capital. Foreign capital inflows, while sharing some surplus value, cannot shake the dominance of existing monopolies, let alone control vital sectors under U.S. monopolist obstruction. Overall, with U.S. imperialism's industrial production in deep decline, markets flooded with foreign goods, and long-term high unemployment, attracting foreign investment to restore U.S. industry benefits the monopolist bourgeoisie. The year-long acquisition drama of U.S. steel by Nippon Steel proves this well. U.S. steel production has long been in decline; by 2023, crude steel output was only 80.7 million tons, less than one-twelfth of China's, with one-sixth controlled by U.S. Steel (see footnote 20). At the end of 2023, Nippon Steel attempted to acquire U.S. Steel with a massive $14 billion investment but was quickly halted by the Biden government citing "national security and supply chain concerns," with Trump also stating he would block the deal if elected. After Trump took office, facing near-unanimous rejection from U.S. monopolist capital, Nippon Steel had to change its plan from a $14 billion acquisition to a large investment in U.S. steel. In the short term, U.S. Steel maintained independent operations, production was restored and expanded, and new jobs temporarily eased class tensions caused by high unemployment. Japan's monopolist capital's efforts to control U.S. steel industry were thus severely frustrated. These policies since Trump’s rise show that U.S. monopolist capital is quite receptive to foreign investments that help restore industry but do not threaten its monopoly position.
However, "Beginning with harm to others, ending in harm to oneself. This is the development law of all reactionary policies." (see footnote 21). Trump’s government boasted arrogantly, thinking that waving tariffs would immediately force other imperialist countries to accept favorable U.S. tariff policies, expand U.S. exports, and promise more investments. But just seven days after announcing the so-called "Day of Liberation tariffs," the U.S. was forced to suspend all additional tariffs beyond the 10% base tariff on April 9. In these seven days, the U.S. did not sign any clear, beneficial formal agreements with any other imperialist countries, nor did it receive significant large-scale investment commitments. As Lenin said: "Economically, imperialism is monopoly capitalism. To monopolize everything, it must exclude competitors not only from the domestic market but also from foreign markets and the entire world." (see footnote 22). As long as imperialism exists, contradictions among imperialist countries are irreconcilable, and the struggle for division and conquest of the world market is unavoidable, even within the U.S. imperialist bloc. The old imperialist European countries colluding with U.S. imperialism and erecting tariffs against Chinese goods do so because they face similar predicaments—massive capital exports, declining domestic industries, and market share being squeezed by China's cheap industrial products. These factors temporarily unite them against China, but not out of any "defense of human rights." After Trump announced tariffs of up to 25% on EU steel, aluminum, and automobiles, and 20% on other goods, the EU immediately negotiated with the U.S., but did not give up core interests. They only agreed to mutual tariff exemptions for industrial products, mainly benefiting themselves, with little mention of expanding investments in the U.S. Meanwhile, China, seeing the EU and U.S. clash, tried to join the EU to open European markets, quickly restarting negotiations on electric vehicle anti-subsidy price commitments. To avoid complete isolation, U.S. imperialism temporarily postponed tariffs on other countries besides China, focusing on its main enemy.
The rapid development of the situation far exceeded expectations. On April 7, before ending its dispute with the EU, the Trump government dropped a heavy bomb—if China did not cancel about 34% of its retaliatory tariffs by April 9, the U.S. would further impose a 50% tariff on China. China did not respond to this unconditional surrender demand. On the evening of April 8, the U.S. announced an 84% tariff on China due to China's refusal to lift retaliatory measures. Adding to the earlier 20% base tariff, the combined tariff on all goods between China and the U.S. soared to 104%! Compared to the first trade war, where high tariffs were only on a few Chinese industrial parts, the current situation is catastrophic for both sides' trade. The reckless actions of the two imperialist giants have not stopped; just two days later, they raised tariffs to 145% and 125%, reaching the highest levels in history. Since then, all tariff hikes became meaningless numbers game—most industrial and commercial capitalists could not profit, and trade between China and the U.S. nearly ceased. The entire Pacific coast was stunned; shipping giants canceled orders, ships and cargoes stranded at ports, even ships already at sea could only remain there. Stock market speculators panicked, selling stocks massively as political tensions intensified, causing crashes in Chinese and U.S. stock markets. On the day Trump announced a 50% tariff increase on China, the Shanghai Composite Index plummeted over 7%, and U.S. markets, still shaken by conflicts with the EU, suffered further declines. Ordinary people in both countries were bewildered by the sudden rupture between the U.S. and the EU, and now they are panicking, wondering: Is Trump crazy?
Of course, Trump is not crazy. Any explanation that attributes major policy shifts of contemporary imperialist countries to the ruler's momentary whim or mental disorder is purely a dogmatic idealist fallacy. U.S. monopolist capital is not so foolish as to accept a mentally deficient person as its representative. Since Trump’s second term, U.S. imperialism has frequently used blackmail tactics to achieve its goals. Regarding the Russia-Ukraine war, global tariffs, and other issues, Trump’s government often issued outrageous diktats—such as cutting off all aid to Ukraine or imposing tariffs worldwide—trying to rely on U.S. imperial power to force concessions. The same applies to the renewed trade war against China. For China, the U.S. remains an irreplaceable important market. Even after the first trade war, as of 2024, exports to the U.S. still accounted for 14.7% of China's total exports (see footnote 23). Meanwhile, due to its still significant lag in semiconductor technology, China annually imports hundreds of billions of dollars worth of chips and electronic products from the U.S. The U.S. also recognizes its importance to China and resorted to blackmail again, aiming to force China to accept "losing the U.S. market and electronic component imports"—similar to the first trade war—by signing unfavorable terms.
But things did not go as smoothly as U.S. imperialism expected. Trump’s government awkwardly found that China did not panic because of the temporary trade disruption. Since April 7, whenever the U.S. announced new high tariffs on China, China immediately retaliated with equivalent tariffs. Even after tariffs rose to 145% and bilateral trade nearly ceased, China did not initiate trade negotiations but rather declared it would "no longer respond" to U.S. tariff tricks. Due to the weakening of U.S. industrial capacity, after nearly cutting off imports from China, the U.S. proved to be the weaker side. Most electronic products circulating in the U.S. market are produced in China; as of 2024, over 95% of Apple’s products are still made in China (see footnote 24). Just two days after the trade cutoff, the U.S. had to exempt tariffs on Chinese smartphones, laptops, hard drives, processors, and other electronics, exposing its weakness. Meanwhile, the sudden halt in trade caused chaos in U.S. markets, as American businesses could not quickly find substitutes for cheap Chinese goods.
On the other side of the ocean, China’s revisionism appears to be more “at ease” on the surface. For China’s revisionism, its biggest problem in the trade war lies in its internal economic situation. China’s severe overproduction forces it to maintain relative stability in international trade; once exports are significantly impacted, many domestic enterprises already on the brink of bankruptcy will collapse in large numbers, and the resulting rise in unemployment will further intensify the already sharp contradictions, driving more workers to oppose China’s reactionary rule. Therefore, in the long run, China’s revisionism cannot accept losing the U.S., its crucial market. But the uniqueness of this trade war lies in the fact that, because prior to this, imperialist countries within the group such as the U.S. and the EU also experienced trade conflicts, they could not quickly unite internally, so China’s revisionism did not fall into diplomatic isolation. More importantly, China’s revisionism does not have many goods that can only be imported from the U.S., unlike the U.S. which imports large quantities of electronic products and cheap consumer goods from China. The main categories of goods China imports from the U.S. are machinery and electronic products, followed by agricultural products. Because the U.S. failed to isolate China diplomatically, China can still import important industrial components, chips, and other products from many second-world countries in Europe and East Asia that are wavering in the trade war, and agricultural products can be expanded from Russia, Brazil, and other countries within the imperialist group. Therefore, the deadly situation of being “choked” by chip bans, as in the first trade war, has not occurred. Although China’s revisionism was also caught off guard by the sudden attack of American imperialism, repeatedly claiming “we do not want to fight,” the brief trade stagnation has not yet caused a catastrophic blow to China’s economy, and there is still room for continued trade war with U.S. imperialism in the short term.
Protests of “Stop!” Sweeping all fifty states of the United States
Ultimately, domestic pressure in the U.S. forced American imperialism to make the first compromise in this trade conflict. Such a crazy tariff policy combined with rampant domestic avian flu resulted in a series of adverse consequences that ultimately fell on the American people: as early as March, prices in the U.S. began to soar, with a dozen eggs in the New York area rising from $3.99 a year and a half ago to $9 or even $12[25]; giants like Walmart and Procter & Gamble announced that retail prices would rise due to increased costs from tariffs. Even Trump himself openly admitted: “Some say shelves will be empty. Maybe children will only have 2 dolls instead of 30, and these 2 dolls might also be a few dollars more expensive than before.” Meanwhile, unemployment issues have flared up again; according to U.S. government statistics, the number of new jobs added in the private sector in April was only 62,000, the smallest increase since July 2024, far below the expected 115,000[26]. The American people, already dissatisfied with Trump’s reactionary policies that destroyed political freedoms and harmed workers’ rights, have since April 5th taken to the streets in protests, chanting “Stop!” and demanding Trump’s government cease its backward actions, with over 1,400 protests nationwide. Helplessly, in the face of internal and external difficulties, Trump’s government had to proactively “send goodwill” to China. On April 22nd, Trump announced that the U.S. would negotiate with China in a “very friendly” manner and significantly cut the high tariffs on Chinese goods. Seeing the situation develop in their favor and eager to restore exports to the U.S., China’s revisionists hastily accepted the olive branch extended by U.S. imperialism. After six days of negotiations, on the afternoon of May 12th, U.S. imperialism finally “shook hands and made peace” with China in Geneva, signing the “Joint Declaration on Geneva Trade Talks.” In essence, this declaration boils down to two points: (1) China and the U.S. cancel all additional tariffs, only retaining the 34% tariffs that were mutually increased, with 24% of these suspended for 90 days. In other words, they only impose an additional 10% tariff on top of the original; (2) China and the U.S. will establish a “mechanism for negotiating economic and trade relations.” No expansion of market access, no commitments to reduce government subsidies—compared to the agreement signed after the first trade war, there isn’t even a clause that is clearly unfavorable to China. The unprecedented scale of the second China-U.S. trade war seems to have ended in a whimper, leaving only a trail of chaos.
When disaster strikes, what is the way out?
Is it really over? Perhaps even the bourgeoisie of China and the U.S. do not think so. The U.S. merely announced a 90-day suspension of the additional 24% tariffs on the 10% base tariffs, but after this “ceasefire” period ends, whether China-U.S. trade relations will ease or escalate again, China’s major industrial and commercial capitalists have already expressed their views through actions. After the release of the “Joint Declaration,” China’s largest trade port, Ningbo-Zhoushan Port, quickly became “sold out.” By the end of May, all shipping slots were sold out within days, and freight rates increased by over 40%.[27] Both the bourgeoisie of China and the U.S. see these 90 days as a “getaway opportunity” for the trade war’s overall trend to remain unchanged, disregarding the sharp rise in shipping costs and choosing to “sell everything they can.” After the pause of the second China-U.S. trade war, China’s revisionists aim to escape the severe overproduction crisis, trying to shift the crisis outward and seize foreign markets, but the situation of competing for sales remains unchanged. The U.S. still seeks to maintain its global hegemony and protect its vast colonies. The so-called “Joint Declaration” failed to ease any contradictions between the two imperialist powers and instead intensified them. Just six days after its release, the U.S. announced tariffs of up to 100% on Chinese cargo handling equipment; just a week later, China announced a 74.9% anti-dumping duty on U.S.-produced copolymerized formaldehyde; and before May ended, the U.S. announced a ban on providing China with chip design EDA software, again trying to “choke” China. Less than a month after the joint declaration, both countries have already begun to continue their covert and overt struggles in various fields. So, a larger and more destructive trade war is inevitable—can anyone doubt that?
For the peoples of China and the U.S., the second trade war is not just a bourgeois dogfight, but also profoundly affects their lives. Trump boasted that he would make Chinese companies bear the tariffs on Chinese goods—this is a complete lie! After tariffs increased, China’s industrial capitalists had to pay the U.S. customs a portion of the extra surplus value realized from their goods. To compensate for the losses caused by high tariffs, Chinese industrial capitalists inevitably raised the prices of goods sold to U.S. commercial capitalists. There is no doubt that U.S. commercial capitalists will also raise prices when selling these goods, otherwise they cannot maintain current profit margins. Ultimately, all burdens are shamelessly shifted onto the people—according to estimates by the Yale Budget Laboratory, Trump’s tariffs will cause clothing prices to rise by up to 32.7%, car prices by 15.8%, equivalent to an increase of $7,600 in the average price of cars in 2024, and fresh agricultural product prices by 6.2%[28]. Even though the trade war has paused, the main trade goods between China and the U.S. have essentially returned to pre-war tariffs, and U.S. monopolies like Walmart still announced price hikes in early June citing shortages caused by the trade war. These tariffs ultimately translate into higher prices, and the collected tariffs all go into the pockets of domestic monopolist bourgeoisie. Trump repeatedly claims that his tariff increases are to protect American manufacturing, create more jobs for Americans, and “for the benefit of American workers”—but reality has proven that everything he does is solely for the needs of American monopolist imperialism, only causing American workers’ real wages to decline and their lives to become more difficult. On the other side of the Pacific, the Chinese people are the same. When the trade war intensifies, many workers lose their jobs; when the situation eases, they have to work overtime to produce foreign trade goods. The huge taxes looted from workers by the Chinese revisionist government are mostly handed over to monopolist capitalists as subsidies, just so their products can be sold at lower prices abroad and serve imperialist competition.
Lenin pointed out: “‘World hegemony’ is the content of imperialist policy, and the continuation of this policy is imperialist war.”[29] China’s emerging imperialist state demands more colonies; otherwise, it cannot shift the crisis of overproduction. However, there are no unclaimed lands left in the world, only the spoils to be seized from declining imperialist countries. China has always tried to dominate the world market with cheap goods, but whether it is U.S. imperialism or the EU, the tariff barriers are rising higher and higher, and no one is willing to surrender. Politics is the concentrated expression of the economy, and the struggle for hegemony in the economic field inevitably leads to political struggles. Since the first trade war in 2018, seven years of mutual accusations and attacks between Chinese and U.S. imperialism in the political arena have indisputably proven this. “In a capitalist society, what other way is there to eliminate the contradiction between the development of productive forces and the division of colonies and ‘spheres of influence’ by financial capital, besides war?”[30] As the balance of power between China and the U.S. further shifts, conflicts among imperialist countries will certainly no longer remain at the current indirect and localized stage. The increasingly aggressive U.S. imperialism under Trump, revealing its fangs, will inevitably push the “trade war” beyond tariff “numbers,” using its far superior military strength to pressure China step by step; China will also inevitably tear off its current mask of “impartiality” and “building a community with a shared future for mankind,” using a more vicious face to accelerate the formation of an imperialist bloc to counter the U.S. imperialist group, ultimately leading to a bloody world war.
However, “all so-called powerful reactionaries are nothing but paper tigers. The reason is that they are detached from the people.”[31] The intensifying struggle for economic and political dominance between the two imperialist powers does not prove their strength, but rather their weakness. It is precisely because both countries have deep internal contradictions that they cannot solve on their own that they attempt to seize global hegemony at all costs, shifting crises onto newly seized colonies. This rule, maintained only through brutal exploitation of domestic workers and plundering global resources and surplus value, is inherently unstable. Larger and more destructive imperialist struggles will inevitably weaken both imperialist powers, creating weak links in the imperialist chain. Meanwhile, the misery, hunger, and even wars brought about by this struggle will serve as a反面教育 for the workers of both countries, gradually leading them to realize that “the main enemy is at home”[32] and to use political struggle to oppose their own oppressors. “Imperialism is the prelude to proletarian socialist revolution.”[33] The capitalist crisis intensified by imperialist rivalry and the coming socialist revolution are not far off.
- The bourgeoisie countries with relatively backward industrial production capacity and falling behind in international trade competition often adopt protective tariff policies, mainly referring to import tariffs. Its role is to: increase the cost of imported goods, thereby weakening their competitiveness in the domestic market of the importing country. ↑
- Stalin: "Summary of the July Plenum of the Central Committee of the Communist Party (Bolsheviks)." ↑
- Ministry of Commerce Policy Research Office: "Research Report on Global Value Chains and China's Trade Value-Added Accounting." ↑
- A country's trade deficit occurs when its import volume exceeds its export volume. ↑
- In 2018, China's exports to the U.S. accounted for nearly one-fifth of China's total merchandise exports. ↑
- Chips are an important component of electronic products, automobiles, industrial equipment, aerospace, and military products. However, China's chip productivity, especially high-end chips, is extremely low. Chips have long been the largest imported commodity in China, with about 80% still needing to be imported from foreign countries, mainly the U.S. and its allies or subordinate countries. ↑
- Nominally, both China and the U.S. are not allowed to devalue their currencies for the purpose of price competition. However, during the first trade war, to counteract the high tariffs imposed by the U.S. and enhance the competitiveness of Chinese goods, China implemented a renminbi devaluation policy. From March to October 2018, the renminbi's exchange rate against the U.S. dollar decreased by more than 10%. ↑
- Export tax rebates refer to the policy of refunding the value-added tax paid during the circulation of exported goods to enterprises after export, essentially a subsidy policy to reduce the cost of export goods and enhance international trade competitiveness. ↑
- Ministry of Commerce: "Foreign Economic and Trade Statistics Issue 2, 2024," https://images.mofcom.gov.cn/tjxh/202405/20240528153833749.pdf. ↑
- Selected News: "China Subsidizes Billions of Dollars for Local Electric Vehicles, BYD is the Biggest Beneficiary," https://finance.sina.cn/2024-04-16/detail-inarzchs5846138.d.html. ↑
- Zhang Xinxin, Zhang Xiaojie: "China's New Energy Vehicle Production and Sales Have Ranked First in the World for 10 Consecutive Years," https://www.gov.cn/lianbo/bumen/202501/content_7000306.htm. ↑
- Ministry of Commerce: "Trade Briefing between China and ASEAN in 2024," https://asean.mofcom.gov.cn/zgdmjm/tj/art/2025/art_73f18532c7e6423a98b900453511f46d.html. ↑
- Levi P. Krasin: "Vladimir Ilyich and Foreign Trade." ↑
- Same as above. ↑
- "Tariff Increases Cannot Solve the US Trade Imbalance," Economic Daily, http://www.ce.cn/xwzx/gnsz/gdxw/202502/24/t20250224_39300114.shtml. ↑
- Xiang Xiufang: "Overcapacity in the Automotive Industry: 'Bright Future' or 'Dark Moment'? | Please Answer 2024," https://auto.gasgoo.com/news/202402/27I70383134C108.shtml. ↑
- Cheng Zixin: "31 Photovoltaic Companies Lose Over 50 Billion Yuan in Total! 'Light Chasers' About to End the Darkest Hour," https://news.10jqka.com.cn/20250211/c665953365.shtml. ↑
- Nikkei Chinese Edition: "U.S. Trade Deficit Hits Record High in 2024, Largest Deficit with China," https://cn.nikkei.com/politicsaeconomy/investtrade/57941-2025-02-06-09-18-27.html. ↑
- Fan Xiaoqi: "U.S. Tariff Algorithm is Simple and Rough, Experts Say Unfounded," https://www.zaobao.com/news/world/story20250403-6114445. ↑
- World Metals Guide: "U.S. Scrap Steel Consumption Reached 50 Million Tons in 2023," http://www.worldmetals.com.cn/viscms/xingyeyaowen3686/264027.jhtml. ↑
- Mao Zedong: "Talks with Xinhua Daily Reporter on New International Situation (September 1, 1939)." ↑
- Lenin: "On the Satire of Marxism and 'Imperialist Economism'," "Collected Works of Lenin," Volume 23, People's Publishing House, 1958. ↑
- State Council Information Office: "China's Position on Some Issues in China-U.S. Economic and Trade Relations," http://www.scio.gov.cn/zfbps/zfbps_2279/202504/t20250409_889794_m.html. ↑
- Yahoo Finance: "Apple CEO: Over 95% of Products Still Made in China," https://hk.finance.yahoo.com/news/%E8%98%8B%E6%9E%9Cceo-95-%E4%BB%A5%E4%B8%8A%E7%94%A2%E5%93%81%E4%BB%8D%E6%98%AF%E4%B8%AD%E5%9C%8B%E8%A3%BD%E9%80%A0-095005384.html. ↑
- Lianhe Zaobao: "Avian Influenza Causes U.S. Egg Shortage, Egg Prices Soar," https://www.zaobao.com/news/world/story20250207-5847616. ↑
- Eastmoney: "U.S. April ADP Employment Increased by 62,000, Significantly Below Expectations," https://finance.eastmoney.com/a/202504303394810725.html. ↑
- Xinde Marine News: "Cabin Space Sold Out!," https://www.xindemarinenews.com/world/59639.html. ↑
- Mohamed Sannajira: "Main Goods Expected to Rise in Price in the U.S. Due to Trump's Tariffs," https://chinese.aljazeera.net/economy/2025/4/12/%e7%be%8e%e5%9b%bd%e5%a2%83%e5%86%85%e5%b0%86%e5%9b%a0%e7%89%b9%e6%9c%97%e6%99%ae%e5%85%b3%e7%a8%8e%e5%bd%b1%e5%93%8d%e8%80%8c%e6%b6%a8%e4%bb%b7%e7%9a%84%e4%b8%bb%e8%a6%81%e5%95%86%e5%93%81. ↑
- Lenin, quoted in Fan Xiujun: "Hegemonism or Internationalism?" May 9, 1969, People's Daily. ↑
- Lenin: "Imperialism is the Highest Stage of Capitalism," "Selected Works of Lenin," Volume 2, People's Publishing House, 1972. ↑
- Mao Zedong: "Talks with American journalist Anna Louise Strong," "Selected Works of Mao Zedong," Volume 1, People's Publishing House, 1967. ↑
- Karl Liebknecht: "Main Enemy at Home!" ↑
- Lenin: "Imperialism is the Highest Stage of Capitalism," "Selected Works of Lenin," Volume 2, People's Publishing House, 1972. ↑