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Home World News Asia

Trump’s China rant can’t hide his trade war retreat

June 2, 2025
in Asia
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“China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”

That’s how US President Donald Trump exploded on Truth Social on May 30, accusing China of breaching a trade agreement. But the all-caps fury betrays something deeper: an American leader who’s cornered, not commanding.

Trump’s tantrum was triggered by China’s accelerating export push, particularly in green technologies. Yet the timing is revealing.

His administration had just postponed key tariff hikes it had loudly threatened for months. Behind the social media outrage is a man who blinked first and who, many investors now believe, will have to do so again.

Despite a barrage of promises to hammer China with sweeping new levies, Trump pulled back in May from a threatened 145%, which was trimmed to 30% after talks in Geneva. Planned hikes on Chinese electric vehicles, solar equipment and critical minerals were softened or delayed.

The explanation from US officials has been bureaucratic: more time is needed to “consult stakeholders” and “ensure compliance.” But the reality is starker: Washington flinched while Beijing stood firm. (China’s retaliatory tariffs on US goods dropped from 125% to 10% after the Geneva talks).

The president’s own trade team sees the danger. American businesses are still deeply entangled in Chinese supply chains. Retaliatory tariffs would drive up costs at a time when consumers are already weary from inflation.

Global investors, spooked by any whiff of trade uncertainty, would punish US and dollar-denominated assets fast and hard. Markets are already muttering warnings. US bond yields are inching upward again, and not because of surging demand or economic heat. 

This is no longer theoretical. Trump’s campaign promised tax cuts, big-ticket infrastructure and more military spending, all meaning selling more debt—and quickly. 

But foreign buyers, already skittish, won’t keep showing up if Washington looks like it’s charging headlong into a new trade war with the world’s second-largest economy. China knows it; and Trump’s team knows it, too.

This is why, despite the headline and social media threats, his administration has quietly eased off. They know that Chinese EVs, batteries and solar modules aren’t flooding the US directly as they’re being rerouted through Mexico and Southeast Asia via subsidiaries set up to insulate parent firms from direct exposure. 

Slapping tariffs on imports from China doesn’t catch the web of new intermediaries that have been built precisely to dodge blunt-force trade barriers.

As such, almost whatever the tariff threat, the punch won’t land. Yet Trump—desperate to look like he’s swinging—finds himself shouting on social media instead of delivering results.

Beijing, by contrast, is playing the long game. While Trump fumes, China is making strategic gains. In 2024, its trade surplus with the US surged again, reaching nearly US$280 billion. 

Its companies are dominating the global EV supply chain. Its solar firms are undercutting Western competitors on price. It’s not just about scale, it’s about speed and focus. China can deploy industrial policy in weeks; the US takes years and so far its not clear it even works.

The cold truth is that the US can’t tariff its way out of this. The 2018–2020 trade war proved it. Trump’s previous tariffs cost US households billions. 

According to the New York Federal Reserve, by 2020, they were imposing an annual cost of $830 per household. Jobs didn’t flood back to America from overseas, manufacturing didn’t boom, prices rose and China adjusted.

Now, with US bond markets tightening, fiscal space shrinking and supply chains even more complex, doubling down on tariffs would be economic self-sabotage. Trump can bark, but another tariff climbdown is already priced in the market.

Even among Republican lawmakers and donors, there’s rising discomfort. They signed on for deregulation, for tax cuts, for “America First” energy. But tanking the bond market and stoking inflation with a tariff binge? Not so much.  

This is not what they backed, and, it can be reasonably assumed, that they’re letting Trump’s advisors know.

Trump’s “Mr Nice Guy” line wasn’t just bluster, it was projection. He’s trying to paint himself as betrayed and angry to cover the fact that he’s the one who backed down first. It’s a classic move. Frame your weakness as someone else’s fault. Lash out. Distract.

But markets aren’t fooled, and China certainly isn’t either. Beijing sees the fissures, senses the panic behind the posts and understands that Trump doesn’t have many cards left to play. His hardline tariff threats are slogans, not strategy.

What’s next? Expect another Trumpian climbdown, now widely derided by the “TACO” acronym for “Trump always chickens out.”

Trump’s team may repackage it again—more consultation, more review, a desire to avoid “unintended consequences.” But the direction is clear. The US bond market is telegraphing it. The policy machinery is slowing it, and Trump’s own inability to dictate the terms of global trade is exposing it.

His Truth Social feed might rage louder and louder. But this time, the more he raises his online voice, the clearer for all to see that he’s losing the fight to China.

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