Donald Trump entered office with a combative stance against China, promising to bring the world’s second-largest economy to its knees through tariffs and tough negotiations. At first, his actions matched his rhetoric. In April, tariffs on Chinese goods soared as high as 145%, sparking an intense trade battle that saw Beijing retaliate with levies of up to 125%. For a brief moment, it appeared that Trump was willing to go all-in to prove American dominance. Yet, just months later, his tone and tactics shifted noticeably. Instead of escalating the conflict further, Trump began to exercise selective leniency, choosing to ease the pressure on China while continuing to apply a heavy hand against traditional allies such as India.
Part of this sudden shift can be explained by the practical realities of U.S.–China economic interdependence. While Trump boasted publicly about holding “incredible cards” that could supposedly “destroy China,” he was also aware of the leverage Beijing possesses. China not only remains America’s largest supplier of manufactured goods but also controls near-monopolistic access to rare earth minerals that are indispensable for U.S. industries ranging from defense to renewable energy. The threat of a 200% tariff on rare-earth magnets may have made for strong headlines, but in reality, Washington cannot afford to jeopardize access to those critical resources without severely damaging its own production capacity.
Over the past year, a string of policy concessions has underscored Trump’s evolving approach. He permitted U.S. tech giant Nvidia to continue selling advanced chips to China, despite earlier restrictions. He quietly shelved a proposed ban on TikTok, a platform owned by Beijing-based ByteDance. In a striking diplomatic move, he even declined Taiwan’s request for a stopover in the U.S., a decision widely seen as a nod to Chinese sensitivities. Meanwhile, Trump has been more than willing to extend educational opportunities to Chinese nationals, greenlighting visas for 600,000 students despite earlier rhetoric about curbing their numbers. These steps suggest that while Trump relishes in his “bully” persona, his administration has avoided pushing China to the breaking point.
In contrast, India—a long-standing U.S. partner often portrayed as a counterbalance to Beijing—has faced far harsher treatment. Washington has penalized New Delhi over its imports of Russian oil, slapping a 25% additional tariff on Indian goods while overlooking China’s far larger purchases of the same commodity. Calls from Trump’s political allies to curb H-1B visas for Indian professionals have further strained ties. These double standards highlight a paradox in Trump’s foreign policy: he berates allies but spares adversaries when structural dependencies tie America’s hands.
The trade data lay bare why Trump cannot strong-arm China as easily as other nations. In 2024, the U.S. goods trade deficit with China ballooned to $295.5 billion, with imports totaling $438.7 billion compared to just $143.2 billion in exports. Early 2025 figures indicate little change, underscoring the depth of American reliance on Chinese supply chains. Even attempts to redirect imports through Vietnam or Mexico have made little difference, since high-value manufacturing remains firmly anchored in Chinese factories. On the flip side, U.S. exports—particularly agricultural goods like soybeans—have suffered under Beijing’s retaliatory tariffs.
The economic consequences of Trump’s tariff strategy have also been felt domestically. Studies by The Budget Lab at Yale estimate that American households lost an average of $3,800 in purchasing power due to tariff-driven price hikes, while inflation rose by nearly half a percentage point. The Congressional Budget Office projects that tariffs will continue to slow GDP growth in the coming years. In practice, rather than forcing China to yield, tariffs have encouraged Chinese companies to relocate production inside the U.S., paradoxically deepening America’s reliance on them.
All of this illustrates why Trump’s aggressive posturing often gives way to pragmatism when dealing with Beijing. While tariffs and threats may have intimidated smaller economies, China’s economic clout and strategic resources make it a uniquely resilient opponent. Trump’s softened stance is less a sign of changing principles than of cold reality: China cannot be bullied into submission without inflicting collateral damage on America itself. For now, this uneasy balance has left the trade war in a stalemate—one where Trump’s fiery rhetoric masks the limits of his leverage.
