No single country can respond to the fentanyl challenge alone. What’s needed is joint effort and sustained cooperation – not economic coercion.

China has taken a tough stance against US President Donald Trump, matching the last two rounds of US tariffs with tariffs of its own. The US tariff on goods from China is now 145%, while China’s is 125%. Why does China take such a position, and are there any off-ramps that would allow it to mitigate the costs of a prolonged trade war?

There are signs that the Chinese economy has been improving, owing to the government’s September 2024 stimulus package. Year-on-year GDP growth in the first quarter of this year reached 5.4% – continuing the marked acceleration from the third quarter of last year.

For many nations, a highly profitable trade relationship with the United States is now no longer a given. With President Trump’s tariff agenda looming over the world, how is Asia planning for a future where the U.S. may not be so open for business?

The recent tariff episode shook global economic confidence in a way that’s only been seen in the aftermath of major catastrophes, despite relief coming in the short-term. Has the damage been done to America’s trade hegemony?

America needs to come to peace with itself before it can come to peace with the rest of the world. Negotiating an economic detente that contributes to American national healing is, arguably, a question of global interest. But there won’t be any free lunches for the Americans.

An estimate of the impact of the tariff war between China and the U.S. on the Chinese GDP in 2025 is presented. The dependence of the Chinese economy on its exports and, in particular, on its exports to the U.S. has been declining significantly over time. At the current tariff rates, a total cessation of bilateral trade is a real possibility. Under the assumption, the reduction in the rate of growth of Chinese GDP may be estimated to be 1.2%, other things being equal. Even though the announced target rate of Chinese growth is around 5%, the weighted average of the target rates of growth of the provincial-level units is 5.26%, indicating room for further increase. In addition, China is expected to launch additional domestic economic stimulus measures in response to the new tariffs, which should result in an additional growth of 0.5%. For 2025 as a whole, a rate of growth of around 4.5% (5.26 – 1.2 + 0.5) may be predicted.

The effect on history of the last one — the Trump populist revolution — remains to be seen. What is certain, however, is that the Trump phenomenon, its support base and the logic of reform it represents, will not simply vanish.

His poorly conceived global tariff war will severely affect U.S. consumers, increase inflation, damage America’s reputation as a reliable partner and put the entire global trade system and practices that the U.S. once championed at risk.

Thanks to President Trump’s new round of international tariffs, the global economy is now at the risk of unraveling. This is not just the result of plunging world trade and investment, but of soaring U.S. military expenditures.