US‑China trade tensions deepen: New threats and strategies emerge
As trade relations between the US and China deteriorate, the risk of an economic conflict marked by escalating retaliatory measures and a shift to asymmetric tactics is rising, according to China analyst Sari Arho Havren.
After the White House again increased tariffs on imports from China to 145%, Beijing responded with a tariff increase on US products from 84% to 125%. At the same time, China's Ministry of Finance assured on Friday that further hikes from Washington would be "ignored," nonetheless, China would "fight to the end."
US-China trade war: Beijing has more options
Sari Arho Havren, an expert from the Royal United Services Institute (RUSI), a British think tank focused on defence and security, was asked about potential further reactions from China to US tariffs. She noted that Beijing has a wide range of available options beyond retaliatory tariffs. She mentioned, among other things, placing American companies on export control lists, restricting qualifications for certain US goods, or announcing restrictions on Hollywood films.
The expert emphasised that China could target the service trade sector, where the US has long maintained a surplus. China could also initiate investigations into intellectual property and cybersecurity aimed at American companies in China.
The China expert expects that China will increasingly adopt asymmetric measures outside of trade. She also anticipates further investment restrictions, stricter enforcement of environmental protection protocols, and compliance with labour regulations by American companies in China.
Scenarios for future US-China relations
Regarding the future of US-China trade relations, Havren outlined three potential scenarios. The most likely scenario she sees is a prolonged economic war with continuous escalation. The expert believes neither side seems ready for compromise, and both governments prioritise national resilience and financial sovereignty.
The second scenario involves "targeted negotiations on overlapping sectors," such as agriculture and technology. Havren claims this is a less likely development. "Both economies rely on certain overlapping sectors, such as agriculture and technology. Through mediation, a sectoral agreement is possible," she stated.
In the final scenario, Havren describes the so-called "decoupling," or disconnection of the world's two largest economies, which could take at least a decade. It reflects ideological disagreements, erosion of trust, and a focus on "national resilience." It would impact global trade systems' long-term and massive realignment, higher costs, polarisation between the US and China trade blocs, and international tensions. The expert assesses local opportunities and reindustrialisation in many areas.
