Trump's China trade war strategy flawed, economist Eduardo Porter says

The United States is locked in a protracted trade war with China, and President Donald Trump’s chaotic, scattershot tariff strategy is the wrong way to wage it, according to trade analyst Eduardo Porter in an analysis published Saturday by The Guardian.

Porter, a former New York Times economics writer, argued that while confronting China’s manufacturing dominance and its strategic control of critical supply chains is a legitimate battle, Trump’s approach — raising tariffs across the board with no discernible strategy and antagonizing natural allies — ensures US trade policy will remain a “hot mess” for the remainder of his term.

“The war will come at a cost to economic wellbeing,” Porter wrote. “Prices of consumer goods will rise as countries block imports from China. Manufacturers will have to cope with pricier Chinese inputs.”

Since what Porter called “Liberation Day” last year, when Trump launched a sweeping wave of tariffs on imports from virtually all trading partners, other countries have moved to insulate themselves. The European Union hurriedly signed a long-stalled trade agreement with South America’s Mercosur bloc. Canadian Prime Minister Mark Carney traveled to Beijing to pursue closer economic ties. China and Southeast Asian nations deepened their own regional trade pact.

Porter wrote that the emerging imperative driving global trade is to stop China’s export juggernaut and end its lock on strategic inputs — from pharmaceutical components and critical minerals to semiconductor chips vital for industries worldwide. But the United States, he argued, cannot do that alone effectively.

China’s economic rise has been staggering. Porter wrote that China accounts for about one-third of the world’s manufacturing output, up from about 5% in 1995. Its share of global manufacturing exports rose from 3% to 20% over the same period. It now accounts for more than 50% of global exports for hundreds of manufactured products.

“The notion that an open, rules-based trading system can be rebuilt, perhaps around China in the absence of the United States, cannot survive this strategy,” Porter wrote.

Porter reported that Beijing has demonstrated a willingness to weaponize its supply-chain dominance. In 2010, China cut exports of rare earths to Japan after a diplomatic dispute. Earlier this year, it again punished Tokyo for statements on Taiwan by curtailing supply of magnets and minerals. Last year, Beijing forced the Dutch government to walk back its takeover of a Netherlands-based chip maker by blocking chip exports from the company’s plant in Dongguan. China also tightened restrictions on rare earths and magnets — components essential for fighter jets, submarines, mobile phones and electric vehicles — to pressure the Trump administration to dial back its trade war.

Trade economist Chad Bown, co-author of the newly published book “How to Win a Trade War,” told Porter that China’s approach was never about mutual dependence. “They don’t want interdependence, they want everybody to depend on them,” Bown said. “Their goal was to acquire market power.”

Porter noted that China’s swelling current account surplus — officially 3.8% of GDP, but up to 5% by some analysts’ estimates — has become a global concern. The US net exports deficit stood at $895 billion as of June, according to Federal Reserve data, underscoring the structural imbalance that Porter said Trump’s strategy has failed to address.

The response to China’s export drive is accelerating beyond the United States. Porter reported that the European Commission has opened 50 antidumping cases against Chinese imports, up from seven in 2024. The EU has imposed duties or tariffs on Chinese electric vehicles, solar supply chains, glass fibers, steel cylinders and more. At the urging of the US, Mexico last year imposed a tariff of up to 25% on imports from countries without a trade agreement with Mexico — a move aimed directly at China. The World Trade Organization has recorded more than 300 antidumping investigations since 2020 by low- and middle-income countries against Chinese exports.

Porter described the path forward as slow and dangerous. The first order of business for the US, Europe and other major economies is to build alternative sources of critical commodities — a process the Biden administration began with subsidies for semiconductor capacity and new mineral sourcing. But he cautioned that developing alternatives to Chinese rare earth magnets will take time, and that China could retaliate by cutting supplies to any country that tries. Moreover, many potentially valuable allies, such as Indonesia with its vast nickel reserves, have close economic ties to China that they are unlikely to challenge willingly.

“There are better and worse ways to do it,” Porter wrote. “Trump’s hitting out at potential allies, protecting industries willy-nilly, with no regard to their strategic importance is obviously the wrong one.” He called for a post-Trump strategy that coordinates with allies to rebuild critical supply chains, but acknowledged that even that would carry significant economic pain.