High import duties on Chinese goods have become the new normal for the United States. While there’s lots of talk about renewed stability with China after the presidents met in South Korea, but the world’s two largest economies appear to be learning how to live apart.
For decades following the start of China’s reform and opening-up in 1978, Washington operated on the belief that economic interdependence with Beijing would foster mutual prosperity and global stability. U.S. leaders, including former Deputy Secretary of State Robert Zoellick, argued that a wealthier, more integrated China would inevitably become a “responsible stakeholder” in the U.S.-led global system.
That belief has since collapsed. Washington now views deep economic ties with China as a strategic liability — one that grants Beijing access to U.S. sensitive technology and erodes America’s edge in innovation. Both the Trump and Biden administrations moved to scale back engagement, reversing decades of faith in interdependence as a stabilizing force.
During his first term, Donald Trump imposed additional tariffs on roughly $370 billion of Chinese imports — a policy that was largely sustained by the subsequent Biden administration. Now, in Trump 2.0, Washington has doubled down, raising import duties on Chinese goods to as high as 145 percent at one point. It has also levied punitive tariffs on specific products, from bathroom cabinets and port cranes to drones and electric vehicles, citing national security reasons. In addition, the administration is working to build supply chains that exclude China in sectors such as rare earths and other critical minerals.
Washington’s export controls amount to a Cold War-style technology blockade, designed to cut China off from U.S. advanced technologies. In semiconductors, the restrictions cover not only finished chips but also manufacturing capacity, design tools and equipment. Items made outside the United States using U.S. technology or software also fall under these controls, significantly extending Washington’s reach.
On the investment front, the U.S. has tightened outbound investment restrictions in strategic sectors such as semiconductors, artificial intelligence and quantum computing while blocking Chinese investment in U.S. industries including high-tech, energy, critical minerals and data infrastructure. These steps are intended to halt the flow of capital, technology and strategic assets between the two economies — furthering the decoupling process.
Yet out of necessity Trump has kept America’s door partially open to non-sensitive Chinese goods, acknowledging the difficulty of quickly replacing many low-cost imports. Like Biden, he has come to realize that the U.S. cannot easily wean itself from products that lack viable alternatives.
The Trump administration has pushed to expand U.S. exports to China in areas such as agriculture, fossil fuels and Boeing aircraft. In an effort to keep Chinese people hooked on U.S. technology, Washington lifted restrictions on Nvidia chip sales, and has pressed Beijing to further open its financial markets to American companies. These measures only partially offset the chilling effect of Washington’s broader restrictive policies.
As a result, the U.S. share of China’s global exports has dropped sharply — from 19 percent in 2017 to 14.7 percent in 2024, and to around 10 percent in the first nine months of 2025 —underscoring the reduced interdependence between the two markets. Meanwhile, what was once a torrent of high-tech investment in both directions has slowed to a trickle.
China has sought to preserve and expand trade ties with the United States, hoping that economic cooperation will remain a stabilizing pillar of bilateral relations. Yet Beijing has learned some hard lessons: U.S. sanctions on Huawei and sweeping export controls on advanced semiconductors have underscored the urgency of building supply chain resilience and becoming technologically self-reliant. And China has diversified its export markets and reduced dependence on U.S. technologies.
In the wake of Washington’s latest tariffs and sanctions, Beijing suspended soybean purchases, tightened export controls on rare earths and critical minerals and launched antitrust probes into Nvidia while urging domestic companies to minimize their reliance on U.S. chips.
The recent agreement between the two presidents in South Korea has brought a momentary de-escalation, but it is unlikely to halt the underlying economic drift. As part of his “America first” agenda, Trump remains intent on decoupling — albeit more gradually than he once promised. Treasury Secretary Scott Bessent has already threatened to reinstate steep tariffs should China fail to meet its trade commitments.
With the U.S. Trade Representive’s Phase One agreement review nearing its conclusion, another flare-up is possible as soon as December. Washington continues to justify its actions with what Beijing calls “unfounded accusations,” while new restrictions loom over sectors deemed “critical.” The once “small yard, high fence” approach is expanding into a vast field with an ever-higher fence.
What is more, tariffs averaging around 45 percent on Chinese goods now appear permanent, if not subject to increases. U.S. Trade Representative Jamieson Greer described a “fallback tariff rate” of roughly 55 percent as “a good status quo.” In effect, high duties have become the new normal in U.S. trade policy toward China.
Apparently, for all the rhetoric about dialogue and stability, economic interdependence between the United States and China seems to be entering a rough phase. The world’s two largest economies are learning — cautiously, and perhaps permanently — to live apart.
