Now, as the second Trump administration signals a renewed reliance on tariff-driven pressure, the lessons from the first US–China trade war have once again returned to the centre of global discussion. For nearly half a decade, that earlier trade war unfolded like a costly and self-defeating drama, with neither side emerging unscathed. Commentators such as The Economist’s Robert Guest once argued that “China is winning,” but such a conclusion overlooks a more fundamental truth: in a global economy woven together by supply chains, technological collaboration, and shared markets, trade wars do not produce victors—only casualties.
From American farmers losing access to China’s billion-strong consumer base to Chinese manufacturers grappling with tariffs on key components, the damage rippled outward, destabilising global value chains and eroding the trading order that had supported decades of global growth. What the world truly needs is not a “winner” between nations, but a triumph for humanity—one where fair rules, mutual benefit, and collective development take precedence over zero-sum rivalry.
The myth of a “winning side” collapses under the weight of economic reality. When the US imposed tariffs on more than US$360bil worth of Chinese goods starting in 2018, the policy was justified as a way to protect domestic industries and reduce the trade deficit. Instead, American consumers bore the brunt. A 2022 study by the Peterson Institute for International Economics found that U.S. households paid an average of US$1,277 more per year due to
tariff-driven cost increases. SMEs dependent on Chinese inputs faced rising production costs, while American farmers—once a strong pillar of US exports—saw soybean sales to China fall sharply and required more than US$28bil in government bailouts. These are not signs of victory.
China, too, felt the strain. Tariffs on high-tech products disrupted access to US semiconductors and software, affecting portions of its technology sector. Exporters in electronics, textiles, and consumer goods absorbed losses as they faced shrinking margins or diverted orders to other countries. Yet interpreting these adjustments as evidence that China “lost” misses the broader point: the trade war was not a contest to see who outlasted whom, but a mutual drain on resources—funds and energy that could have been devoted to innovation, infrastructure, and addressing global challenges such as climate change.
These structural vulnerabilities—exposed during the first round of confrontation—are again relevant as Washington prepares for the possibility of renewed escalation. The return of tariff rhetoric under the second Trump term serves as a reminder that repeating old tools will not produce new outcomes. If anything, it underscores how deeply intertwined the United States and Chinese economies remain, despite political tensions.
The greatest casualties of the trade war were not the major powers but the global supply chains and smaller economies that rely on predictable, rules-based trade. For decades, production networks functioned through components crossing borders multiple times—a smartphone might consist of chips from Taiwan, batteries from China, and assembly in Vietnam before reaching US shelves. Tariff disruptions shattered this stability. Companies were forced to restructure their manufacturing footprints, often at high cost, resulting in layoffs, investment delays, and price increases worldwide.
Small economies were particularly vulnerable. Countries such as Malaysia—which supplies a large share of the world’s semiconductor packaging materials—saw export growth weaken as demand fluctuated between the United States and China. The International Monetary Fund estimated that the trade war reduced global GDP by 0.8% in 2020, equivalent to more than US$700bil—resources that could have supported post-pandemic recovery or lifted millions out of poverty.
These disruptions show why describing trade conflict in terms of “winning” is misleading and dangerous. Such framing reduces complex interdependence to a simplistic contest of strength and obscures the human consequences: the American factory worker laid off when a contract disappears, the Chinese farmer losing access to markets, or the entrepreneur in a developing country waiting for delayed imports. Real global stability cannot be built on policies that weaponise trade.
What the world needs instead is a renewed commitment to fair and transparent trade rules—rules that prioritise cooperation over coercion and shared development over unilateral advantage. Reforming institutions such as the World Trade Organization remains essential, not to favour one side but to ensure a level playing field for all.
Practical cooperation is not only possible but necessary. In areas such as renewable energy, both major economies bring complementary strengths: China’s manufacturing capability, America’s innovation, and developing nations’ need for affordable solutions. A prolonged trade war slows this global transition and harms everyone.
The question we face today is not “who won the trade war,” but how the global community can avoid repeating the same cycle of confrontation. When the world wins—through stability, cooperation, and fair rules—every nation benefits, from the farmer in Iowa to the entrepreneur in Shenzhen to the young graduate in Kuala Lumpur.
That is the victory the world should aim for.
Li Huailiang
Professor and Dean of the Institute for a Community with Shared Future,Communication University of China lihuailiang@cuc.edu.cn
