Trade war: Is China better equipped to confront Trump than in 2018?

As speculation grows over the potential return of Donald Trump to the White House in 2025, questions are resurfacing about the future of U.S.–China relations, particularly in the realm of trade. During his presidency, Trump imposed hundreds of billions of dollars in tariffs on Chinese goods, sparking a protracted trade war that reshaped global supply chains and bilateral economic strategies. Now, analysts are asking: if a new trade war emerges, is China better prepared than it was in 2018?

Lessons Learned from the First Trade War

The 2018–2020 trade war forced China to recalibrate its economic priorities. Tariffs affected a wide range of sectors—from electronics to agriculture—and prompted Beijing to reduce its dependence on U.S. technology and markets. In response, China accelerated domestic innovation, invested heavily in self-reliance strategies, and diversified trade relationships with other global partners.

Economically, China absorbed the shock by shifting some exports to other countries, strengthening trade ties with Asia, Europe, and Africa, and boosting domestic consumption. These adaptations have since become central to the country’s long-term economic planning.

Stronger Technological Independence

One of the key vulnerabilities exposed during the initial trade war was China’s reliance on foreign technologies, particularly semiconductors. Since then, Beijing has ramped up investment in its tech sector through initiatives like "Made in China 2025" and support for homegrown companies in AI, 5G, and chip manufacturing.

While challenges remain, China is now less dependent on U.S. imports in several high-tech industries. The push for technological self-sufficiency has not only reduced risk in a potential future trade conflict but has also bolstered national innovation capacity.

Trade Diversification and Global Alliances

China has expanded its trade portfolio significantly since 2018. The Regional Comprehensive Economic Partnership (RCEP), which includes major economies like Japan, South Korea, and Australia, offers China a massive trade network that reduces reliance on the U.S. market. Meanwhile, China has strengthened economic ties with countries in Africa, Latin America, and the Middle East, enhancing its resilience to bilateral tensions.

At the same time, the Belt and Road Initiative continues to drive infrastructure and investment partnerships, further embedding China into the global economic fabric.

Economic Challenges Still Loom

Despite progress, China faces several internal challenges. Slowing GDP growth, a struggling property sector, and youth unemployment remain significant concerns. In a new trade war scenario, these domestic issues could constrain China’s ability to absorb external shocks.

Additionally, global scrutiny over intellectual property practices, data security, and political tensions over Taiwan could complicate trade negotiations, regardless of economic preparedness.

Trump’s Potential Strategy

If re-elected, Trump may pursue similar tactics, including tariffs, restrictions on Chinese investments, and further decoupling from Chinese technology. However, China’s improved position could make it a more formidable counterpart in negotiations, potentially altering the dynamics of future trade talks.

Conclusion

Compared to 2018, China is more strategically positioned to handle another round of trade tensions with the U.S. Through greater technological independence, diversified trade partners, and lessons learned from the past, the country has bolstered its economic defenses. Yet, both sides remain deeply intertwined, suggesting that while a trade war might be more manageable, collaboration could still offer the most sustainable path forward.