Global Tariff War Hits Pause: Why Is China Still in a Chokehold?

A Sudden U-Turn: Trump's Global Tariff "Relief"and the China "Siege"

As the world braced for another trade storm, Trump dropped a bombshell on Wednesday: a 90-day suspension of punitive tariffs on nearly 60 countries, slashing reciprocal duties from 25% to 10%. Yet conspicuously absent from this "truce list" was China. Instead, U.S. tariffs on Chinese goods surged to 125%, a record high since the trade war began.

The move's drama lies in its "dual narrative": extending an olive branch to allies while raising walls against China. White House insiders revealed the decision followed just 48 hours of urgent debate, reflecting a "retreat to advance"logic—easing tensions with partners to focus pressure on Beijing while rescuing crumbling domestic market confidence.

—————————————————————————————————————————————————————————————

Market Rollercoaster: A Policy-Driven Capital Frenzy

Markets erupted immediately. The S&P 500 skyrocketed 7.2%, its biggest single-day jump since the 2008 financial crisis, while the Dow Jones breached historic levels, led by tech and manufacturing stocks. Analysts dubbed this the "tariff relief dividend,"as capital flooded back into equities after months of trade uncertainty. The volatility index (VIX) plunged 30%.

But beneath the euphoria lurked unease. Goldman Sachs noted the rally was more a "policy-driven correction"than a fundamental recovery. In reality, it was triggered by panic over a three-week U.S. Treasury selloff (10-year yields spiking past 4.5%) and a 3% dollar index crash—signs of deepening fears about a U.S. recession that forced Trump's hand.

—————————————————————————————————————————————————————————————

Behind the Pivot: Recession Alarms and Political Calculus

Trump admitted at a press conference: "Market pain made recalibration necessary."This confession unveiled the policy shift's roots:

Economic Cliff: Fed models warned of a 1.2% Q4 GDP contraction if tariffs persisted.

Midterm Election Risks: Democrats weaponized market turmoil, branding a "Trump recession"as swing-state polls dipped 5%.

Dollar Dominance Erosion: Accelerating de-dollarization drove foreign U.S. debt holdings to a 15-year low.

Yet controversies flared. House Speaker Pelosi slammed it as "stock market manipulation through trade policy,"while U.S. Trade Representative Tai framed it as "resetting the global trade system"—a face-saving spin for tactical retreat.

—————————————————————————————————————————————————————————————

Global Fallout: Diplomatic Maneuvers Unveiled

-Allies' Pragmatism: Vietnam pledged cuts on U.S. farm tariffs; EU delegates proposed auto parts duty exemptions; Japan and South Korea reworked chip supply chains overnight.

-China's Counterstrike: Beijing fired back within 12 hours—hiking U.S. goods tariffs to 84%, blacklisting 12 U.S. firms, and adding Tesla and a Boeing subsidiary to its "Unreliable Entity List."

-Emerging Markets' Dilemma: India and Brazil balanced short-term export gains against long-term risks of "choosing sides"in the U.S.-China rivalry.

—————————————————————————————————————————————————————————————

U.S.-China Standoff: A War of Attrition with No Winners

Trump's tariff escalation reveals strategic vulnerabilities:

Supply Chain Backfire: Apple's production costs rose 18% post-relocation; North American automakers halted operations due to rare earth shortages.

Inflation Spiral: With China supplying 42% of U.S. consumer imports, tariffs could spike CPI by 2-3 percentage points.

Tech Cold War Stalemate: Huawei's breakthrough in 5nm chips weakens U.S. tech blockade efficacy.

China's retaliatory strikes target U.S. pain points: LNG tariffs hit midterm election battleground states, rare earth controls cripple defense contractors, and corporate blacklists intimidate U.S. firms in China. This mutually destructive clash edges the global economy toward stagflation.

—————————————————————————————————————————————————————————————

What's Next? Three Uncertainties in the 90-Day Truce

Alliance Realignments: Will the EU leverage the window to finalize a China investment pact? Can ASEAN build a "U.S.-China neutral"supply chain?

U.S. Internal Rifts: Trump's vow to exempt select firms may ignite lobbying wars among corporate giants.

China's Counterplay: With RCEP taking effect and CIPS expanding to 180 countries, can multilateralism offset U.S. pressure?

————————————————————————————————————————————————————————————

Conclusion: Trade Wars Enter a "New Normal of Uncertainty"

Trump's tariff pivot is ultimately a political gambit—applying short-term painkillers to long-term structural crises. As globalization collides with populism and economic logic clashes with geopolitical ambition, the world witnesses a tectonic shift in global order. The 90-day truce may offer markets temporary relief, but the sword of Damocles—U.S.-China strategic rivalry—still hangs over the global economy.