Upheaval in the World Trading System: The Roots Go Deeper Than Trump
Udumbara
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Depending on who is speaking, President Donald Trump gets most of the credit/blame for all the current upheaval in the global trading system. He certainly has contributed, with shifting tariffs, port fees, and a succession of trade deals with America’s trading partners.
A broader analysis, however, reveals that much of today’s tension and upheaval stems from Beijing’s insistence on pursuing unfair trade policies and its unwillingness to compromise despite complaints and pleas from its trading partners. And since Beijing seems unlikely to change any time soon, the pattern of upheaval and tension will likely persist for some time to come.
None of this is to say that the United States and the West generally were not complicit in creating today’s problems. For years, Washington and other Western capitals pursued policies to give room for Chinese economic and financial development. The general feeling was that the richer and more advanced China became, the less authoritarian its government would become, and the more of a stake China had in the world trading system, the less disruptive and dangerous the country would be.
Businesses in the United States, Europe, and Japan complained about these Chinese practices, but their governments, for a long time, held onto their dreams of Chinese liberalization and largely ignored their business communities. As China grew, however, and its trade surpluses with America and Europe widened, these complaints redoubled.
Since at the same time Beijing increasingly challenged the West on the geopolitical stage and poured money into its military, it became increasingly clear even to Western politicians that the dream of a more liberal, less challenging China was just that, a dream. Attitudes began to change.
The first clear signs of this Western awakening emerged during Trump’s first term in the White House. In 2018 and 2019, he imposed higher tariffs on goods coming into the United States from China. His initial effort was not a general opposition to Beijing. He made it plain at the time that he embraced the trading relationship between the two nations.
His objective was simply to get the Chinese Communist Party (CCP) to ease the restrictive and otherwise unfair trade practices mentioned above. “From now on,” he said on May 29, 2018, “we expect trading relationships to be fair and reciprocal.”
Europe and Japan were less strident and even criticized Trump’s rhetoric, but their business communities were happy to let the White House do the work of changing Chinese policies.
Under President Joe Biden, the American effort seemed to shift from pressuring Beijing on its policies to a broad-based effort to limit China’s economic power. Biden added more tariffs on Chinese goods, offered subsidies to companies to produce domestically, and limited Chinese access to advanced semiconductors as well as semiconductor manufacturing machinery. Talk in Washington became increasingly centered on decoupling from China.
It was then an easy step to Trump’s open belligerence toward China trade when he returned to office in 2025. Trump extended all that Biden had done and, it seemed, did all he could to disadvantage China economically and in trade. Though he has become the lightning rod in this contest with Beijing, the rest of the world has joined in, if not on America’s side, then in parallel ways to protect themselves from what they see as predatory Chinese practice.
The European Union has launched anti-subsidy probes against Chinese companies. German manufacturers want to abandon their once-close trade ties with China. The EU Chamber of Commerce urges companies to “eliminate single-source dependences,” singling out China. Mexico has imposed high tariffs on Chinese products. Japan has actively challenged China’s economic influence in East Asia. Thailand, Indonesia, and Malaysia seem increasingly dissatisfied with China’s trade practices.
Given the media attention Trump commands, trade matters resemble a bilateral contest between the United States and China rather than a global contest between China and the rest of the world. Because Beijing is convinced it will prevail in this contest and China, for all its economic troubles, appears to remain resilient, the contest seems destined to persist for some time to come. And given the breadth of this contest, it seems likely to go on long after Trump has left the geopolitical scene.
