US-China Trade War Escalates: Who Will Blink First?

As US and China Escalate Trade War, the World Asks: Who Will Blink First?

Trump Increases Pressure with 145% Tariff as Beijing Hits Back and Global Markets Reel

The intensifying US-China trade war has become a global economic flashpoint, with escalating tariffs, retaliatory bans, and growing geopolitical stakes prompting analysts, governments, and investors alike to ask: Who will blink first — Washington or Beijing?

U.S. President Donald Trump has imposed a staggering 145% tariff on Chinese imports, while China has retaliated with 125% duties on American goods. The high-stakes standoff, already rattling global supply chains and equity markets, now threatens to decouple the world's two largest economies — a move experts warn could have seismic long-term consequences.

Critical Minerals, Boeing Bans, and More Trade Flashpoints

On Tuesday, the Trump administration escalated the confrontation further by ordering a national security review of critical mineral imports, the majority of which originate from China. This move follows reports that Beijing has suspended Boeing aircraft deliveries and halted purchases of U.S.-made parts and equipment.

In a symbolic gesture, Hong Kong’s postal service also announced it would no longer process U.S.-bound mail, intensifying the trade and diplomatic divide.

“A 145-percent tariff will make it impossible for China to sell to the US – the costs on both economies will be exceptionally high,” said Vina Nadjibulla, vice president at the Asia Pacific Foundation of Canada.
“A complete decoupling is almost impossible to contemplate.”

Miscalculations and Strategic Misunderstandings

Trump, who has long accused China of exploiting trade imbalances, maintains that Beijing must return to the negotiating table. But analysts argue that his strategy lacks clarity and risks backfiring.

“It’s unclear whether Trump wants to reduce the trade deficit or cut ties with China altogether,” said Harry Broadman, a former U.S. trade representative.

Broadman emphasized that modern global supply chains are vertically fragmented, meaning industries depend on complex, transnational sourcing that doesn’t allow for simple tit-for-tat decoupling.

“Markets are layered through stages of production. You don’t just win or lose — it’s a deeply interconnected game,” Broadman added.

China's Strategy: Play the Long Game

Despite facing domestic challenges such as high unemployment and low consumer demand, China appears poised for a long-term economic standoff. Beijing has been preparing for such a scenario since Trump’s first term, shifting trade dependencies away from the U.S. and diversifying key imports, including agricultural goods.

“This is an almost existential struggle for China,” said Dexter Tiff Roberts, senior fellow at the Atlantic Council’s Global China Hub.
“Xi Jinping can’t afford to be seen backing down — not to the U.S., and not to his own people.”

Roberts notes that Xi's strongman image makes any concessions politically costly. As evidence of its broader pivot, China has been strengthening ties with Southeast Asia, with Xi launching a five-day diplomatic tour this week to promote China as a champion of free trade.

Signs of U.S. Vulnerability

While Trump projects strength, domestic pressure is mounting. Stock markets have seen sharp declines, and major industries reliant on Chinese imports — particularly in technology and automotive manufacturing — are pushing back.

“Trump has a misguided obsession with tariffs,” said Robert Rogowsky, trade policy professor at the Middlebury Institute.
“He blinks when the wealthy elite start losing money — and that’s already happening.”

The administration has already granted exemptions for some tech and auto goods from the latest tariff round, raising questions about internal coherence and susceptibility to lobbying.

“There’s so much blinking in Washington, it’s hard to believe more won’t follow,” Rogowsky quipped.

Eroding Global Trust in U.S. Trade Leadership

Beyond the bilateral fallout, Trump’s erratic trade approach is damaging the U.S.’s global credibility, according to Wei Liang, a specialist in international trade diplomacy.

“Biden built alliances with strategic focus. Trump is alienating everyone,” Liang said.
“In the long run, countries will pursue a ‘U.S. +1’ strategy — not abandoning the U.S., but insulating themselves from its unpredictability.”

With countries increasingly viewing the U.S. as an unreliable economic and security partner, the trade war may catalyze a deeper realignment of global alliances and supply chains.

Outlook: A Mutually Painful Path Forward

For now, neither Washington nor Beijing shows signs of backing down. Trump’s inner circle insists the “ball is in China’s court”, while Chinese state media frames the struggle as a clash of rising and declining powers.

But with global markets on edge and industries warning of long-term disruption, many analysts say the eventual outcome may be a face-saving compromise that allows both sides to claim victory — without admitting defeat.

“Otherwise,” Roberts warns, “this could go nuclear — and no one really knows what that looks like.”

Follow The Horizons Times for expert analysis on the evolving US-China trade conflict, its global ramifications, and the high-stakes geopolitical chess game shaping the future of international commerce.