The Logic, Features and Layout of Trump 2.0 \"Tariff War\"

Ae ahostofmeasuresof“tariffwars\". In addition to announcing tariffs on goodsimportedtotheUnitedStates from Canada，Mexico and China， thegovernment also imposed trade restrictions on specific industries including steel，aluminum and copper，aswellasadvancedplan for \"reciprocal tariffs\".Donald Trump claimedthata“tariffwar”would correcttradeimbalances，boost government revenue and promote thereshoringofmanufacturing tothe United States.By leveraging tariffs， theU.S.also attempts to achieve goals in border security，illegal immigration andfentanyl control.Undoubtedlyat acentral positionin Trump'ssecond terminoffice，the“tariffwar”will exertimpactsfarbeyondeconomic andtradepolicies and upon the directionofChina-U.S.relations.

THEDEEP-SEATEDLOGIC OFTRUMP 2.0 ‘TARIFFWAR'

DonaldTrump ismoreobsessed with“tariffwar”inhissecond term than his first term. On many occasions，hecalledtariff“themost beautifulword\"，whichcouldmake Americaricherandstronger.Basedon the views of Donald Trump，senior U.S. governmentofficialsand their core think tanks，the strategic significance oftariffsfortheUnitedStatescanbe mainly summarized in the following three aspects.

First， tariffs can bring huge revenue to the U.S. government to help address the increasingly aggravating public debt crisis in the country. Tariffs played an important rolein the process of the United States becoming a world power. Between1789and1939， 90% of the U.S. federal government's revenue came from tariffs.In Trump's view， tariff reductions and exemptions，as “subsidies” from the U.S.government toother countries，are the culprit for the U.S. government's growing reliance on domesticincome taxes and a public debt crisis. Trump said thatbeing not richand with a federal government debt ofup to USD 36 trillion，increasing tariff revenue would help improve the U.S. government's financial situation. In his inauguration speech in January 2025，Trump announced that he would overhaul the trade systemand impose tariffs on foreign countries toenrichAmericancitizens.Tothis end，Trumpdecidedto establish the External Revenue Service to“generate wealth for the American people\".The newly-establishedagency，headed byCommerce Secretary Howard Lutnickand TreasurySecretary Scott Bessent，aims to manage tariffsand other trade-related incomecollected from foreign countries.Kevin Hassett，directorof theWhiteHouse NationalEconomicCouncil，said that byimposing a 10% tariff on Chinese importsandeliminatingthe“de minimisexemption\"forgoodsvalued belowUSD80O，theUnitedStates wouldreceiveUSD 5oobillion to USD1trillionintariffrevenuefrom China over the next decade.Trump believes that the U.S.government urgently needs to “reduce spending andincrease revenue”and that theincreaseoftariffrevenuewill createfavorableconditionsfor implementing large-scale tax cuts in his second term.The Trump administration is also attempting to make use of the tariff revenue to support the United States Sovereign Wealth Fund，the establishment ofwhich was announced in early February 2025.

Second，tariffs area means of restricting foreign goods and boosting the revitalization of the U.S. manufacturing： With special attention to trade balance，Trump aspires to reducetheU.S.tradedeficitbymeans of tariffs. Setting the goal of making the U.S.the top global superpower in manufacturing，Trump strives to protect domestic industries with the “tariff walls”and boost the prosperity of“Main Street”（which is the traditional real economy）.In March 2025，Trumpdeliveredaspeech to the U.S.Congress to advertise hisachievements in protecting the U.S. steel industry，claiming that “tariffs are not just about protecting American jobs，they're about protecting the soul of our country\". Trump aims to consolidate the voter base by“protecting”such traditional industries as steel，aluminum and copper，which isan act with evident political intention. Moreover， Trump also attaches so great importance to high value-added manufacturing， supporting chip manufacturers like Intel and automobile manufacturers. He proposed that the supply chains of critical products should be 100% located within the United States and those companies producing in the United Stateswould enjoy a 15% corporate tax rate.For the Trump administration，tariffs are essentially anindustrial policy，whichrepresents an attempt to reverse the subsidybased industrial policyof the Biden administration and instead leverage tariffs to force the reshoring of critical product production to the United States.U.S.Treasury Secretary Scott Bessent stated that tariffswere just a means and the ultimate goal was to push for the return of manufacturing totheUnitedStatesandensureU.S. economic security.

Third，tariffsare employed to pressure other countries into making concessions to the United States，in ordertoachieve“reciprocity”and other policy goals.Trump complained that many countries，including the U.S.allies，have long“taken advantage of'theUnited States，leading theU.S. being“treatedunfairly\".On February 13，2025，the WhiteHouseissued aPresidential Memorandum on “Reciprocal Tradeand Tariffs\"，stating thattheUnitedStatesisoneofthe mostopeneconomiesintheworld， has the lowest weighted average tariff rate in the world and imposes fewer barriers to imports.The United Stateshas long been“treated unfairly”by trading partners，leading to itslarge trade deficit in goods， which undermines theinterestsof Americanworkersandindustriesand threatensU.S.economicand national security.In pursuit of the“reciprocal tariffs”plan，Trumpwill pressure its trading partners into lowering their tariffsontheUnitedStates，overhaul the so-called“discriminatory tax arrangements”（suchasvalue-added taxanddigital service tax），weaken non-tariff barriersasaresultofother governments'subsidies，regulations， exchangeratesandotherpolicies and openup broadermarket space forAmerican businesses.In addition， bywieldingthebigstickoftariffs， Trump pushesrelevant countries intomeetinghisdemandsforborder security，illegal immigration and drug control.By “linking” tariffs with otherpolicyissues，tariff threatsare usedasnegotiation leverage.Itis alsoaprioritized issue for Trump to maintainthestatusof theU.S. dollar. HethreatenedBRICSnationswith 100% tariffs if they continued to underminetheU.S.dollar.

THEMAINFEATURESOFTRUMP2.0 \"TARIFFWAR\"

Trump'sobsessiveenthusiasm for“tariff war”during his second termdemonstrateshisdeep-seated economicnationalism，whichitself could inflictnegative impactson the UnitedStates.Inviewofthis，while wagingthe“tariffwar”，Trumpalso displays the so-called“art of the deal\" bymeans of postponing tariffs and offering conditional exemptions to lessenthelosssufferedbytheUnited"States. The “tariff war” strategy pursued by the Trump administration mainly exhibits the following features.

TISt， 11um uvanitstain measures in a high-profile manner to project his image as a “strongman\" who immediately fulfills campaign pledges. On the very first day of his presidency on January 20，2025， Trump issued the Memorandum on America First Trade Policy，in which he proposed such measures as a global supplemental tariff and the establishment of External Revenue Service.Later， the United States announced 25% tariffs on imports from Canada and Mexico and a 10% additional tariff on imports from China. On February 10， Trump further announced imposing 25% tariffs on all steel and aluminum imports to the U.S. from all trading partners. On February 13， Trump announced the“reciprocal tariffs” plan.His administration also seeks tariff actions targeting specific industries such as automobiles， chips， timber and pharmaceuticals.In early March， Trump directed the U.S. Secretary of Commerce to initiate a“Section 232 investigation”under the Trade Expansion Act of 1962 to evaluate the impact of imports of timber，lumberand their derivative products on America's national security， in preparation for relevant trade restriction actions.On March 26， Trump signed a proclamation at the White House to impose a 25% tariff on imports of automobiles. He invoked the International Emergency Economic Powers Act to quickly advance a series of tariff actions. This move is considered unfounded and undermines the capacity of the U.S. Congress to counterbalance the president on tariff issues， but Trump tried to leverage this move to shape the American public's perception of his strong political dominance. OnFebruary9， theresultofaCBSNews poll showed that Trumphadstarted his term with net positive marks from Americans overall.Mostrespondents descriedhimas“tough\"，“energetic”， \"focused\"and\"effective\"，and 70% of respondents saw him as doing what he had promised during his campaign.

Second， although Trump wields the big tariff stick，he also leaves room for maneuver，so that he can pressure trading partners into making concessions and transfer benefits to the United States.After Trump's tariff threat， the Mexican president immediately declared the deploymentof1o，ooo national guard troops to its border with the United States and other measures， causing the United States to postpone its tariff actions against Mexico. To avoid tariff pressure from the United States， Japanese Prime Minister Shigeru Ishiba announced a significant increase in investment into the United Statesand beefed up efforts to purchase American products such as liquefied natural gas during his visit to the U.S. In February， Indian Prime MinisterNarendraModi visitedthe White House and agreed to conduct negotiations on addressing the longstanding trade imbalance between the two countries， pledging to increase its procurement of energy products and advanced weapons from the United States. While announcing an assessment of U.S. trading partners on“reciprocal tariffs\"，Trump emphasized that some “reciprocal tariffs”might not be implemented if trading partners agreed to correct their policies before officially enacting tariff policies. Even after the implementation of the policy，if some trading partners believed that the U.S. tariffs on them were too high， they could take the initiative to reduce oreliminate the tariffs on the U.S. And zero tariff was to be paid if the caused long-term damage to the U.S. automotive industry and resulted in significantjoblosses.Milleralso suggested that besides expecting Europe to adjust its tariffson the United States， the country would also pressure Europe into addressing the value-added taxes，reducing digital taxesaswell asreviewsand fines on largeAmerican techcompaniesand relaxing conditionsfor imports of American agricultural productsand automobiles.In addition，Trumpalso attempts to leverage the“tariff war” toforceJapan，SouthKorea，Australia and its NATOallies to raise military spending，so as to share more security costs for the United States.

products were manufactured within theUnited States.

Third， tariff actions focus on the goal of“anti-circumvention”， especially strengthening the control overthe NorthAmerican economic area.While working on antidumping and anti-subsidy measures， the economic and trade policies adopted by the Trumpadministration attach great importance to“anticircumvention\"，whichaimstocrack down on the practice of Chinese， Russian and other foreign companies evading U.S.tariffs through trade in third countries.The Memorandum on America First Trade Policy directs U.S. government agencies to conduct in-depth investigations into theissue of evading tariffsthrough third countries.North America takes up the most critical position in the layoutof the Trump administration. During his first term，the United States transformed the North American Free TradeAgreement into theUnited States-Mexico-Canada Agreement （USMCA）.In hissecond term，Trumpattempted torenegotiate the terms of the USMCA to adopt newprotective measures for transit trade，preventing other countries from dumping their products into theUnited States through Canada and Mexico.Scott Bessent even envisioned the buildingofa“discriminatory tariff zone”anda“NorthAmerican fortress”to strengthen control over othercountries'economic and trade policies.Trump hasrepeatedly said Canada should considerto become the“51ststate”oftheUnitedStates if the countrywants to avoid tariff pressure.

Fourth，Trumpuses tariff threats asaleverage to achievepolicygoals inmultiplefields.The“tariffwars” against CanadaandMexicoare，to a large extent，an extension of its domestic policies.Everyyear，a huge amountoffentanylflowsinto the UnitedStatesfromitsborderwith Canada and Mexico， the Trump administration attempts to push ahead theresolution of the fentanyl issue through tariffs.With Europe， the Trumpadministrationalso hopes to achieve multiple policy goals through tariff threats.Stephen Miller， Trump's top aide，stated that the U.S.' automobile exports to Europe faced value-added tax and tariffsup to 30% as well as many non-tariff barriers. However， the Europeanautomobile exportsto theUnited States only needed topaya 2.5% tariff，which

THELAYOUTOFTHETRUMP2.0 “TARIFF WAR\"AGAINST CHINA

Trumphasrepeatedlyclaimed that theUnited Statesmustwinthe socalled“competitionwith China”and manyofhiscoreadviserssee China as theprimaryrival.RobertLighthizer， former U.S.trade representative， proposed that theUnited Statesand relevant countries should come togetherand createanewtrade system，which could enforce balance byhaving“two tiersoftariffs\"：A higherleveloftariffswould be applied to“non-democratic\"countries as well as those adopting predatory industrial policies so as to reduce their surpluses.Andthecountrieswithin thenewtrade systemwould paylower tariffs and they could be adjusted over time to allow developing countries to runtemporarysurplusesin order to achieve industrialization.This vision isobviouslyintended to isolate China in the global economy.

In the meantime，some U.S. congressmen are pushing for revoking China'sPermanentNormal TradeRelations（PNTR）status.On January23，2025，Republicanand Democratic lawmakers for the first timejointlyproposeda bill in the House ofRepresentatives to end China's PNTR status， demanding the U.S. government to set separate tariff standards for Chinese goods， with 100% minimal duty rates for \"strategicproducts”imported from Chinaandaminimum 35% tariff for \"non-strategic products\". In the past six years，although the proportion of Chinese goods in U.S.imports declinedfrom 20% to 13% ，their proportion in global exportsrose to 17% ，higher than the 12% during Trump's firstterm.Bessentand others hyped up the so-called “China shock\" onaglobal scale，accusingChina ofposing challengesto the United Statesandother countrieswith its \"overcapacity\".

In this context， tariff pressure on China takesup an important position inTrumpadministration's“tariff war”andmanyofthetariffactionsit hastakenare essentiallyrelevant to China. The profound impacts of the \"strategicdecoupling\"with China advocated by Lighthizer should not beunderestimated.TheU.S.still strivestoreduce itsdependenceon China in terms of critical products and undermine China's position in theinternationalindustrialchains throughtariffmeasures.TheU.S. “tariff war”against China is taking placeboth at“thedirect front”and at “the indirect front\". Its strategy exhibitsthe strategic featuresof \"coercion first，maximal blackmail， externaldeploymentandintegrated pressure\".

At“the direct front”， reducing thetradedeficitandachieving the so-called“reciprocal”and“fair” traderelationswithChinaarethe prioritized goals of the Trump administration.Accordingto data fromtheOfficeoftheUnitedStates TradeRepresentative， theU.S.trade deficitingoodswith China in2024 wasUSD 295.4 billion， accounting for nearly 25% ofUS'total trade deficit ingoods. AsoflateApril 2025， the Trump administration hasannounced rounds of tariffhikeson Chinese goods，with the accumulation of various tariffsimposedbytheUnited States as high as 245% on certain Chinese exports. Trump instructed theU.S.Departmentof Commerce， theOfficeoftheUnitedStatesTrade Representative and other agencies toinvestigatetraderelationswith China， includingtheimplementation ofChina-U.S. phase-one economic and trade agreement as well as China's“non-market behaviorand unfairpractices”inareasoutside of technology transfer and intellectual property. Undoubtedly， Trump's \"tariff war” against China during his second term shows strong gestures of bullying and blackmail.He attempted to resortto tariff threats to demonstrate a tough stance towards ChinaandforceChinatotakethe initiative to engage with the United States and make concessions to the U.S.on such issues as the acquisition of TikTok by American companies. The Trump administration has instrumentalized and weaponized tariffstosuchanextentthattheir application approaches irrationality.

At“the indirect front\"，Trump's tariffthreatsagainstCanada andMexico，impositionof steel， aluminum，and copper tariffs， eliminationof“deminimis exemption”and the“reciprocal tariff” planare also stronglyintended to target China.

Firstly，under the U.S.'pressure， Mexico and Canada may impose morerestrictionson the commercial andinvestmentactivitiesthat Chinese companies carry out locally. The Trump administration expects Mexico's consistency with the U.S. in termsof tariffson China.In late February，U.S. Commerce Secretary HowardLutnickheldtalkswith Mexican EconomyMinisterMarcelo Ebrard，reaching the agreement to establish a joint working group to address this issue.To support domestic industries and appease theTrumpadministration，Mexican PresidentClaudiaSheinbaumhas taken actions to tighten restrictions on cheap Chinese imports.The"Mexican government has pushed foramendmentof relevant laws to expand local production of componentsand reduce imports from China.Chinese companiesalso face obstacles in investing and building factories in Mexico.Canada has reinforced itsnational securityreview on Chinese companies in critical mineralsand imposed high tariffs on permanent magnets，natural graphite and other Chinese imports. Inaddition，Canadahasfollowedthe United States to hype up the market distortioninNorthAmericacaused by China’s \"overcapacity\".

Secondly， theTrumpadministration's tariff on such specific industries as steel， aluminum， copper， automobiles，chipsand pharmaceuticalswill have impacts on China. With great importance attached to maintaining the support of voters in the“rust belt\" and “swing states\"， Donald Trump raised tariffs on steel， aluminum and copper and emphasized that the only wayfor exemption of such tariffs is local production. The direct imports ofsteel andaluminum from China made up only 2% of the U.S' total， while China's exports of relevant products to the United States are mainlydone through transit trade. Therefore， this round of tariff hikes on steel， aluminum and copper tarifs intentionally targets China. Peter Navarro，aseniorWhiteHouseadviser on trade and manufacturing，stated that China’s copper smelting capacity accounted for over 50% of the world's totaland thatChina'scontrol ofthe global copper supply chain through government subsidies and overcapacity posed a direct threat to the national security and economic stability of the United States. The Trump administration is also considering imposing tariffs on industries such as maturenodechipsand pharmaceuticals，in an attempt to push American companiesto reduce theirdependence onChina's supply chains.

Thirdly， the Trumpadministration announcedtheeliminationof the“de minimis exemption\"，posing challengesto China'sindustrialchainsof cross-border e-commerce. According totheTradeFacilitationandTrade Enforcement Act， imported goods under the value of USD 8OO are eligible for duty-free treatment upon entry into the United States， also known as “de minimis exemption\". The Trump administrationbelievesthatthe“de minimis exemption”opens up a loophole for Chinese goods to flood into theUnited States and exacerbates the smuggling of fentanyl and its precursorsto theUnited States. Ending the“de minimis exemption”will deal a direct blow to Chinese sellers， withsomecross-bordere-commerce platforms and logistics service providers suffering losses.In addition，the Trump administration is also consideringaddingTemuandSheintothe “forced labor” list of the U.S.Department ofHomeland Security.This indicatesthattheU.S.'economicand tradepressure imposed on China is further targeting China's cross-border e-commerce and consumer goods industries.

Fourthly，the impactoftheU.S.“reciprocaltariffs\"onChina'stransittrade shouldnotbeunderestimated.The \"reciprocal tariffs”plan is the main leverage of Trump's economic and tradepolicyin hissecond term.When setting“reciprocal tariffs\"，the Trump administrationtookintoconsideration notonlythetariffratesofrelevant countries on American products，but also their domestic taxes （such asvalue-added taxanddigital servicetax）， exchange rate manipulation and wage suppression，amongother factors.If the Trump administration presses on the“reciprocal tariffs”plan，the rising pressureexerted bytheU.S.tariffson countriessuchasVietnam，Indiaand Brazilwillextendtotheirtraderelationswith China，affecting such indus triesas electrical machinery，plastic products， furniture and toys.

CONCLUSION

The“tariff war”waged by the Trump administration violates World TradeOrganizationrulesand posesa serious challenge to the multilateral trading system， standing as a wrong practice“doing benefitsto no one\". Theroot cause of the U.S'enormous tradedeficitisthelowdomestic savingsrate，ratherthanthelackof so-called “reciprocity”with its trading partners.The“tariffwar”launched eversince Trump'sfirsttermfailed to bringaboutthedeclineoftradedeficit ingoods，but rather continued rise. Inaddition，becauseofitsinherent contradictions， the economic policies adoptedbythe Trumpadministration will lead to negative consequences fortheUnitedStates，suchasinflation hikes，stock market volatilityand a decline in actual exports.

In the past few years，China hasstayed steadyand determined in thefaceofthecoercive“tariff war”waged bytheUnited States， demonstrating strong resilience in its foreign trade exports.Now and in the upcoming period， China needs to continuously reinforce its policy toolkitand properlytake“asymmetric countermeasures”against theUnited States.Asplanned，China should continuouslyacceleratereformsat multiple fronts，promote diversified foreign trade， createanewpattern of openingup and buildamoresolid foundation for effectively responding to the U.S. containment strategy against China.