The U.S.-China trade war, which began in 2018, remains a key factor in shaping the global economic landscape in 2025. This prolonged conflict, characterized by tariffs, trade restrictions, and technology disputes, has had far-reaching consequences for both nations and the world economy. Despite multiple negotiation rounds and partial agreements, the core issues remain unresolved.
The trade war officially started under the administration of President Donald Trump, who imposed tariffs on steel and aluminum imports, citing national security concerns. These measures quickly escalated into a series of tit-for-tat tariffs, with the United States targeting over $360 billion worth of Chinese goods and China responding with tariffs on more than $110 billion in U.S. exports. The initial justification focused on reducing the large U.S. trade deficit with China, but the conflict soon expanded to include deeper concerns such as intellectual property theft, forced technology transfers, and state subsidies.
In early 2020, the two sides signed a Phase One trade agreement. Under this deal, China pledged to purchase an additional $200 billion in U.S. goods and services over two years, while the United States agreed to reduce some tariffs. However, the onset of the COVID-19 pandemic disrupted the global economy and limited the agreement’s impact. Trade volumes fell, and mutual distrust between the two superpowers deepened as the pandemic unfolded.
When President Joe Biden took office in 2021, many hoped for a reset in U.S.-China relations. However, the Biden administration chose to maintain most of the Trump-era tariffs while shifting focus to strategic competition in high-tech sectors such as semiconductors, artificial intelligence, and green technology. Export controls were tightened, especially for advanced chip technology, limiting China’s access to critical U.S. innovations.
In response, China has pushed for greater self-reliance through major investments in domestic innovation, aiming to reduce its dependence on American technology. Meanwhile, the United States is working with allies to “de-risk” global supply chains, encouraging production in countries like Vietnam, India, and Mexico. This approach has led to a partial decoupling of the two economies, particularly in sensitive industries.
Key issues fueling the trade war remain unresolved. The United States continues to accuse China of unfair trade practices, including subsidies to state-owned enterprises and lack of transparency in regulatory enforcement. Additionally, the U.S. claims that Chinese companies benefit from intellectual property violations and cyber-espionage. On the other hand, China argues that U.S. actions are aimed at suppressing its economic rise and maintaining technological dominance.
The global impact of the U.S.-China trade war has been significant. Supply chain disruptions, higher consumer prices, and reduced trade flows have affected countries worldwide. Multinational companies have had to adjust sourcing strategies and relocate production to mitigate risks. Developing economies, particularly in Southeast Asia, have benefited as businesses diversify away from China. However, the uncertainty continues to weigh on investment and economic planning across the globe.
The current state of the trade war involves continued tariffs and selective cooperation. While some exemptions have been granted to ease pressures on specific industries, the broader strategic rivalry shows no signs of ending. Periodic talks are held between high-level officials, but expectations remain low due to deep-rooted differences. In recent months, there has been renewed interest in holding dialogue, particularly in neutral locations like Switzerland, but progress has been slow.
Technology remains the most contentious area of the conflict. U.S. efforts to block China’s access to key semiconductor equipment have led to countermeasures from Beijing, including export restrictions on critical minerals used in chipmaking. This tit-for-tat dynamic has added complexity to an already strained relationship. At the same time, both nations are investing heavily in domestic research and manufacturing to gain an edge in the global tech race.
With no formal resolution in sight, the U.S.-China trade war continues to evolve, influencing economic decisions, government policies, and corporate strategies worldwide. The lasting effects of this dispute will likely shape international trade and geopolitical relations for years to come.