ANALYSIS: Tariff barrier on China capped at 21% — Has Beijing won the war?

ASEAN as a Bypass Route

Transshipment—the practice of routing Chinese goods through third countries to avoid U.S. tariffs—is not a marginal phenomenon. Of the $75 billion in Chinese trade redirected to seventeen third-party markets since Liberation Day, $14.4 billion exhibits statistical characteristics consistent with onward transit to the U.S. market. ASEAN is the dominant corridor: $8.8 billion transits through this region, accounting for 61% of total transshipment volume. Vietnam, Thailand, and Malaysia have seen their exports of electronics and components to the United States skyrocket—these are minimal assembly operations that transform “made in China” into “made in Vietnam” without altering the underlying value chain.

The three dominant sectors in this transshipment are computers and computer parts ($3 billion), telecommunications equipment ($2 billion), and electrical machinery ($1 billion). This accounts for 41% of the total, concentrated precisely in the strategic sectors that Washington claims to be protecting. Vietnam’s electronics exports to the United States have grown by more than 400% since the first Section 301 tariffs were imposed in 2018. This growth is not a sign of spontaneous industrial expansion in Vietnam—it reflects a superficial relocation orchestrated from Guangdong and Shenzhen.

Transshipment as a Symptom of Enforcement Failure

India and Mexico complete this picture. India has a transshipment intensity of 25% on its redirected flows from China—the highest among all individual partners covered by the analysis. Mexico, with a 23% transshipment intensity, benefits from the fact that its effective tariff rate remains 30 percentage points lower than China’s, creating an economically irresistible arbitrage opportunity. Chinese companies invested nearly $4 billion in Mexican operations in 2023 to establish a foothold in this corridor. The USMCA rule of origin, intended to protect North America, is being circumvented by operations that incorporate Chinese value-added on Mexican soil.

This phenomenon illustrates a fundamental point that hardliners on China refuse to admit: tariff barriers without strict enforcement of rules of origin and without allied cooperation serve only to redirect trade flows, not to block them. Direct customs fraud is also widespread: the Coalition notes a $112 billion discrepancy in 2025 between what China reports exporting to the United States and what U.S. customs records as imports. This discrepancy cannot be explained solely by differences in statistical methodology.

The Vietnam-ASEAN route is the geographical manifestation of a political failure. Tariffs on China were raised, and China responded by creating back doors through its neighbors. This was not unforeseeable—it was predicted by trade experts as early as 2019. What is inexcusable is that the administration did not simultaneously strengthen rules of origin and customs capabilities. The alarm was sounded without installing smoke detectors.

The Overturning of the IEEPA: A Constitutional Gift to China

On February 20, 2026, the U.S. Supreme Court handed down a landmark decision in Learning Resources, Inc. v. Trump: tariffs imposed under the IEEPA are unconstitutional. The power to levy taxes belongs to Congress, not the executive branch. This 6-3 decision had the immediate effect of nullifying the 10% fentanyl tariffs and the 10% retaliatory tariffs imposed on China—representing a sudden, non-negotiated 20-percentage-point reduction on Chinese goods. The Trump administration responded by imposing a 10% across-the-board tariff via Section 122 within 24 hours, but the message was clear: the U.S. tariff framework is legally fragile.

For Beijing, this constitutional reversal represented a strategic gain without any quid pro quo. The Carnegie Endowment for International Peace explicitly notes that “China benefited from the invalidation of the IEEPA tariffs.” ” Better yet: according to the same May 2026 analysis, Beijing calculates that Washington will have to revert to pre-IEEPA Section 301 levels—and Beijing is prepared to accept this, as these levels are comparatively favorable to it compared to the 145% announced at the height of the escalation. The Busan deal of October 2025, negotiated on the sidelines of the APEC summit between Trump and Xi, established a status quo of 30% U.S. tariffs and 10% Chinese tariffs on U.S. goods. An unequivocal balance of power.

Section 122, Section 301: A Temporary Patchwork

Section 122, used to replace the IEEPA, automatically expires on July 24, 2026, unless Congress extends it. At that point, if no replacement mechanism is in place, tariffs on China could theoretically drop to those under Section 301 alone—approximately 25% on most consumer goods. Section 301 remains the permanent pillar—it was not affected by the Supreme Court’s decision and covers the product lists established since 2018. On June 2, 2026, the USTR announced a new Section 301 investigation into forced labor, which could add 12.5% in tariffs on Chinese imports. However, this proposal is open for public comment until July 6, 2026, and a final decision is not expected until the fall.

Taken together, this constitutes what trade lawyers call a “perpetual transition regime”: tariffs that pile up, cancel each other out, and replace one another, creating constant uncertainty for U.S. importers—but also for the government itself, which does not know exactly how much revenue it will collect tomorrow. Amid this fog, Beijing is planning for the long term while Washington improvises.

There is something deeply unsettling about the image of a superpower whose trade policy depends on the lifespan of a 150-day legal provision. Xi Jinping has a ten-year planning horizon. Trump operates on a 24-hour news cycle. When these two temporal logics clash in a trade war, the outcome is predictable—and we’re seeing it unfold.

Rare Earths as an Ultimate Bargaining Chip

In April 2025, faced with escalating U.S. tariffs reaching 145%, China deployed its most formidable weapon: restrictions on exports of rare earths and critical minerals. Beijing controls between 60% and 90% of global production of many rare earth elements, as well as virtually all refining capacity. These minerals are essential for the permanent magnets used in precision missiles, F-35 radars, and the engines of military equipment. According to Josh Rogin’s analysis published on June 18, 2026, when Trump imposed his 145% tariffs, Xi Jinping responded by cutting off supplies of critical minerals to U.S. companies—particularly those in the defense sector. Shortages emerged in the U.S. military supply chain.

The result was unambiguous: Trump backed down. The Busan summit in late October 2025 resulted in an agreement that reduced U.S. tariffs from 145% to 30%, in exchange for a Chinese commitment to ease controls on exports of rare earths and critical minerals. According to terms reported by Reuters and confirmed by Skadden, Washington agreed that future tariffs would not exceed the level set in the “Busan deal.” Beijing secured a tariff cap without making any structural concessions. Investments under the CHIPS Act, subsidies for domestic manufacturing—all of this will take years, if not decades, to reduce U.S. dependence. In the meantime, China is holding Washington hostage over its own defense supply chains.

A lever the West failed to anticipate

This isn’t the first time China has used rare earths as a geopolitical lever. As early as 2010, Beijing had restricted its exports to Japan following a diplomatic incident in the East China Sea. The message was clear, and the West had fifteen years to draw the necessary conclusions. Fifteen years to diversify its supply sources, develop alternative sources, and build strategic reserves. The West failed to do so. The European Union remains 98% dependent on China for heavy rare earths. The United States, despite programs such as the Defense Production Act (DPA), has not rebuilt significant refining capacity on its own territory. When Trump launched his tariff war, he did so without first securing the raw materials essential to its own defense. This is a strategic blunder of considerable gravity.

We had the playbook. We had the Japanese example from 2010. We had dozens of government reports warning about dependence on Chinese rare earths. And yet, when the time came to confront Beijing on trade, the Trump administration had no cover for its critical vulnerabilities. I am convinced that this episode will be studied in military academies as an example of a lack of strategic preparedness—not as a trade victory.

A historic record that defies all logic of constraint

The figures released by Chinese customs in June 2026 should have triggered an urgent strategic review in Washington. China’s exports rose by 19.4% in May 2026 compared to May 2025, reaching a monthly record of approximately $377 billion. Even more troubling: shipments to the United States—the market Washington had spent years trying to “wean” off Chinese goods—surged by 35.4%, marking their fastest growth since early 2021. The total trade surplus reached approximately $105 billion, the highest level in months. China’s annual trade surplus surpassed the $1 trillion mark for the first time in history in 2025.

The dynamics speak for themselves. According to the Eastern Herald on June 9, 2026, “the assumption that the United States could simply decide to stop needing what China manufactures has been undermined. ” U.S. importers have continued to buy Chinese goods—and in increasing volumes—because alternatives are more expensive and are not yet available on the scale required. Tariff policy has effectively shifted part of the cost to U.S. consumers—an additional $1,500 per year per U.S. household, according to the Tax Foundation—without reducing dependence.

The Move Upmarket That Upsets the Equation

There is a second layer to this story that pro-Washington analysts have systematically underestimated: China is moving upmarket. Machinery and electrical products now account for more than 60% of Chinese exports, with electric vehicles and solar equipment leading the way. This is no longer the China of the 1990s, known for cheap toys and textiles. It is a first-rate industrial competitor in the sectors of the future—the very sectors on which the West claims to base its 21st-century economic sovereignty.

Worse still: as Washington raised tariffs on the Southeast Asian manufacturing hubs intended to replace China—Vietnam, Thailand, and Malaysia—the tariff competitiveness gap between those countries and China has narrowed. The Eastern Herald article puts it bluntly: Chinese exporters now face a tariff disadvantage that is smaller than that of many countries meant to supplant them—a result “almost exactly the opposite of what the policy intended to produce.”

This 35.4% increase in Chinese exports to the United States—even as Washington waged a high-profile trade war—leaves me with a single question: What does this say about the credibility of American power? If your allies see that your toughest tariffs result in a record increase in imports from the targeted country, they will draw conclusions about your true resolve. And Beijing knows this very well.

A Summit All Show, No Substance

The Trump-Xi summit in Beijing on May 14 and 15, 2026, generated a media frenzy for modest strategic results. Foreign Policy summed up the verdict most lucidly: “Beijing appears to be the biggest winner, exploiting Washington’s dependence on China to lower high U.S. tariffs.” ” Concrete commitments include an order for 200 Boeing aircraft—below pre-summit expectations, which caused Boeing’s stock price to plummet—and the purchase of $17 billion worth of U.S. agricultural products annually in 2026, 2027, and 2028. A bilateral “Board of Trade” was established to manage tariff reductions on an initial list of $30 billion worth of “non-sensitive” goods.

What Washington did not secure: no structural reform of China’s industrial policy, no lifting of subsidies for strategic industries, and no commitments regarding overcapacity in steel, aluminum, and solar panels. Treasury Secretary Scott Bessent told Reuters that the United States “is in no hurry to extend the truce,” adding that “things are stable.” ” The Carnegie Endowment notes that “stability as a substitute for strategy is either a negotiating stance or an admission that Washington has not decided what it wants from China after the November deadline.”

The November truce as a horizon of uncertainty

The trade truce resulting from the Busan summit expires on November 10, 2026. On that date, the Section 301 exclusions also expire. The USTR is currently working on two new investigations—on forced labor and industrial overcapacity—each of which could result in additional tariffs of 10%. But as the Eastern Herald noted on June 15, 2026, these investigations are “highly likely” to structurally replicate what the IEEPA imposed through a legally more robust framework—not to add new pressure that is fundamentally greater than what China has already absorbed.

The real question is this: What exactly does the United States want? To reduce the trade deficit? To bring industrial production back to U.S. soil? To clip China’s technological wings? These objectives are partially contradictory, require different tools, and entail radically distinct time horizons. The Trump administration has never clearly answered this question, wavering between the logic of short-term deals and long-term decoupling ambitions without the resources or patience to achieve them.

Greer said at a forum that the main outcome of the Beijing summit was that he could “keep tariffs on China, which is pretty awesome.” This statement epitomizes the strategic superficiality of this administration’s approach to Beijing. Maintaining tariffs on paper while the effective rate falls to 21% and Chinese exports break records—what exactly does that achieve?

Asymmetric Dependence as a Factor of Power

At the heart of the debate over who is “winning” this trade war lies a fundamental question of mutual dependence. The United States imports approximately $400 to $450 billion worth of goods from China each year—including electronic components, generic drugs, critical raw materials, and telecommunications equipment. China exports to a U.S. market that it can partially offset with other outlets—Europe, ASEAN, Africa—but which remains its largest single customer. On the surface, this co-dependence suggests symmetry. In reality, it is deeply asymmetrical in strategic sectors.

The Guardian, in its June 6, 2026, edition, notes that China now accounts for one-third of global manufacturing output, and that its share of global manufactured goods exports has risen from 3% to 20% since 1990. Xi Jinping himself, in a 2020 speech cited by The Guardian, explicitly stated that China must “tighten the dependence of international production chains on China, creating a powerful countermeasure against nations that would artificially cut off supply lines.” ” This was no secret ambition—it was a public strategic statement that the West largely ignored.

The West Confronts Its Industrial Vulnerability

Europe faces a trade deficit with China of $1.15 billion per day, according to Investment Monitor on June 19, 2026. China’s trade surplus with the EU reached $413 billion in 2025 and continues to grow. The European Commission is now pursuing 50 anti-dumping cases against Chinese importers, up from just 7 in 2024—a surge symptomatic of a belated realization. Meanwhile, Chinese controls on rare-earth exports affect more than just the United States: Europe also depends on these supplies at critical levels for its own defense industry.

The Washington Post summarized on June 16, 2026: “For eight years, the United States waged an economic war against China by imposing substantial tariffs on Chinese goods before they reached U.S. shores. But this initiative did not diminish China’s manufacturing capabilities. ” This is the provisional epitaph for a policy that correctly diagnosed the problem—China’s industrial power is a threat—but responded with the wrong tools, poorly calibrated, poorly coordinated with allies, and lacking a coherent long-term vision.

The West’s dependence on China is no accident—it is the result of thirty years of deliberate decisions made in the name of globalization and economic efficiency. Decisions that were perfectly rational in the short term, but catastrophically reckless in the long term. And now that the price to be paid for this recklessness is becoming apparent, some are looking for scapegoats. Trump finds them easily. What he cannot find is an exit strategy that causes no more damage to the U.S. economy than to the Chinese economy.

The $1 Trillion Trade Surplus and Its New Markets

While the United States was imposing record tariffs on China, Beijing was quietly rebalancing its exports geographically. China’s trade surplus exceeded $1 trillion in 2025—an all-time record. This figure includes not only the United States but also a sweeping expansion into ASEAN, Africa, the Middle East, and South America. Asian regional value chains, bolstered by trade agreements such as the RCEP, have enabled China to channel the pressure it faces from the United States into accelerating its integration with the rest of the world. U.S. and European dependence on China is increasing while their leverage is diminishing—this is the fundamental trajectory of this decade.

According to UNCTAD and the World Economic Forum, global trade is set to slow structurally in 2026—but this slowdown will affect the economies that triggered the tariff war more than those that are on the receiving end of it. China has diversified its trading partners, strengthened its agreements with Southeast Asia, and expanded its presence in Africa and Latin America. It has absorbed the U.S. shock by spreading the impact across a broader geographic base. This does not mean that U.S. tariffs have had no effect—they have reduced the U.S.-China bilateral trade deficit by about 50% since 2018. But China’s manufacturing power, for its part, has not retreated a single millimeter.

“China Shock 2.0” in Europe

The June 16, 2026, edition of The Washington Post and the G7 summit in Canadoc highlighted a phenomenon that Europeans had been fearing: “China Shock 2.0.” With U.S. markets partially closed off by tariffs, Chinese exporters have redirected a portion of their trade flows to Europe, exacerbating a trade imbalance that was already running at 1 billion euros per day. The European Union has imposed tariffs on Chinese electric vehicles since 2024—up to 45% on certain manufacturers such as BYD, SAIC, and Geely. China responded with retaliatory measures targeting European dairy products and cognac. A trade front opened up in the West while Washington focused on the Pacific front.

This strategic triangulation—Beijing maintaining pressure on Washington while opening a second trade front in Europe—reveals a level of sophistication that Trump cannot counter with tariffs alone. China is playing multiple hands simultaneously: it is negotiating bilaterally with Washington, penetrating European markets that Washington has alienated through its own tariffs, and consolidating its position in developing economies via the Belt and Road Initiative. This is a multipolar power strategy in the face of an America that is struggling to maintain coherence on even a single front.

The fact that Europe will discover in 2026 that it is flooded with Chinese goods redirected from the United States is the direct result of a lack of transatlantic coordination. If Trump had worked with his allies rather than imposing tariffs on the EU as well, a coordinated response to China’s trade power would have been possible. Instead, he fought on two fronts and gave China the leeway it had been waiting for.

Export Controls: The Only Tool That Truly Worries Beijing

While tariffs have proven to be an insufficient tool, export controls on advanced technologies are a far more serious lever—and this is where the strategic competition between Washington and Beijing is truly playing out. Restrictions on cutting-edge semiconductors, AI software, and EUV lithography equipment have effectively slowed China’s technological advancement. TSMC, ASML, and Nvidia’s high-end chips are off-limits to Chinese companies. This is a barrier that tariffs alone cannot erect. According to a June 17, 2026, report by China Briefing, the Pentagon designated 188 new Chinese companies as military entities—Alibaba and Baidu are now on the list—in response to which Beijing announced new restrictions on rare earth exports to dozens of U.S. companies.

The technological escalation is the true front line of this war. But here, too, there is a lack of consistency. The Trump administration granted massive exemptions for semiconductors in its tariffs—precisely because the U.S. chip industry itself depends on China for certain inputs and for part of its market. U.S. semiconductor companies have actively lobbied to limit export controls on their specific products. U.S. trade policy is shaped as much by industry lobbies as by a coherent strategic vision—and the Chinese have understood this perfectly.

Beijing’s Model for Long-Term Industrial Dominance

On May 27, 2026, FDD provided a precise analysis of China’s strategy: Beijing seeks to “keep foreign firms tied to China, build around U.S. technology controls, and preserve its leverage.” ” Xi Jinping framed the rivalry in terms of an “unprecedented and accelerating transformation”—signaling that Beijing believes U.S. advantages are eroding and that the world order is becoming more fluid. In this view, Trump’s tariffs are merely one phase in a long-term competition that China is approaching with five- and ten-year planning, while Washington operates on two-year election cycles.

The FDD report concludes that if the Beijing summit de-escalates tensions without addressing U.S. vulnerabilities, “Beijing will have secured the most valuable concession without making any concessions of its own.” ” That is precisely what has happened. Chinese tech companies are investing heavily in domestic alternatives to U.S. chips—SMIC, Huawei HiSilicon, and a dozen national champions backed by tens of billions in state subsidies. China’s dependence on Western technologies is steadily declining, even if there is still a long way to go. Meanwhile, U.S. and European dependence on Chinese rare earths and manufactured components is not decreasing at the same pace.

I believe that in ten years, historians of international economic relations will identify this period—2025–2026—as the moment when the West thought it was waging a trade war, while China was waging a long-term war for technological and industrial positioning. From this perspective, tariffs are a distraction. The real battle is being fought in semiconductor laboratories, lithium mines, and battery factories. And on these fronts, the West’s track record is far more mixed.

The Gap Between the Announcement and the Actual Impact

The effective rate of 20.8% according to Bloomberg, or 24% according to Penn Wharton, is not just an economic figure. It is an indicator of the Trump administration’s political credibility on trade issues. When Secretary Greer declares that maintaining tariffs on China is “pretty great,” he overlooks the fact that these same tariffs are systematically rendered toothless by exemptions, workarounds, and court rulings. The American public is footing the bill—$1,500 per household, according to the Tax Foundation—without the promised industrial protection materializing to the extent announced.

This gap between rhetoric and reality is characteristic of Trump’s approach to economic foreign policy. Bombastic announcements serve domestic political objectives—demonstrating a tough stance toward China, mobilizing a working-class electoral base—while exemptions and backroom deals serve the interests of large corporations that import Chinese components. The result is a policy that leaves everyone dissatisfied: too harsh on American importers, not effective enough to protect domestic manufacturers, and not stringent enough to truly alter China’s trade behavior.

The Hidden Costs of a Poorly Prepared Trade War

Beyond the $1,500 per household, the costs of this poorly managed trade war are manifold. U.S. companies that depend on Chinese supply chains have incurred massive costs from forced diversification—relocation, new sourcing, quality assurance—without alternatives always being available at the required scale or quality. U.S. industries that export to China—agriculture, aviation, semiconductors—have lost market share as a result of retaliatory measures, a loss partially offset by the purchase commitments made at the Beijing summit, but with no long-term certainty. And the U.S. geostrategic position in the Asia-Pacific has been weakened by allies who have witnessed Washington’s tariff flip-flops and drawn conclusions about American reliability.

What strikes me most deeply about this analysis is that the United States has inflicted economic damage on itself and its allies that China could never have inflicted on its own. It is a lesson in strategic self-mutilation. And that does not mean that the pressure on China was fundamentally misguided—China is indeed a systemic threat. It means that the chosen method was incompetently executed.

A Timeline Leading Up to a Potential Crisis

Fall 2026 is shaping up to be a moment of truth in the trade war. Three deadlines are converging: Section 122 expires on July 24, 2026; the Section 301 exclusions expire on November 10, 2026; and the trade truce resulting from the Busan deal also expires on November 10, 2026. If these three mechanisms are not renewed or replaced simultaneously and in a coherent manner, tariffs on China could either collapse due to a lack of a robust legal basis or skyrocket in a new, unplanned escalation. Neither of these scenarios constitutes trade policy; both would be accidents.

According to a June 17, 2026, report by China Briefing, the two ongoing Section 301 investigations—on forced labor and overcapacity—are expected to be concluded “before the end of summer,” i.e., before July 2026. The expected outcome is a new layer of tariffs, each at 10%, structurally replacing what the IEEPA previously imposed. If this timeline holds, Section 122 will have expired, but the strengthened Section 301 measures will take over, maintaining an effective rate within the current range. But China has warned that it “opposes all unilateral tariff measures” and that any new tariffs exceeding the levels set in the Busan deal would trigger countermeasures. The Bilateral Board of Trade—the major innovation of the Beijing summit—has yet to produce anything concrete in terms of tariff reductions on the $30 billion worth of “non-sensitive” goods.

The question no one is asking openly

The real trade policy question—the one the Trump administration refuses to state clearly—is this: what level of decoupling is American society willing to pay for? A genuine, structural decoupling of the most sensitive supply chains would require hundreds of billions of dollars in industrial investment over a decade, a complete reorganization of defense supply chains, a coherent alliance policy with Europe and Japan, and a level of political patience that U.S. election cycles do not readily allow. Without an answer to this question, tariffs are nothing more than posturing—painful for the U.S. economy, insufficiently restrictive for Beijing, and exactly what China has calculated Washington would be unable to sustain in the long term.

I am not inherently pessimistic about the West’s ability to stand up to China. I deeply believe that liberal democracies have structural advantages that the Chinese authoritarian model cannot replicate—in innovation, creativity, and the ability to attract talent. But these advantages cannot be harnessed through tweets and tariffs. They are harnessed through a serious industrial policy, genuine cooperation among allies, and a strategy that lasts longer than a news cycle. It is precisely this kind of policy that is sorely lacking.

Thirty Years of Geoeconomic Naivety

The story of the 21% effective exchange rate is in fact the epilogue to a much longer story: thirty years of blindly integrating China into the global economy in the name of a theory—which, as history has shown, was false—that China’s economic growth would lead to its democratization and integration into the liberal norms of the international order. China’s entry into the WTO in 2001 was presented as a victory for the West. In reality, it provided Beijing with the institutional framework to flood global markets with subsidized manufactured goods, destroy entire sectors of Western industry, and accumulate the reserves and technology necessary for its military and geopolitical rise.

This original “China Shock”—analyzed by economists Autor, Dorn, and Hanson—cost between 2 and 2.4 million U.S. manufacturing jobs between 1999 and 2011. It widened inequalities in industrial communities and fueled the political resentment that ultimately brought Trump to power in 2016 and 2024. In this sense, the rise of Trumpism is in part a direct consequence of the failure of liberal elites to address the China issue with the vigilance it deserved. Trump diagnosed a real problem—but his remedy remains largely symptomatic rather than curative.

The institutions that turned a blind eye

The WTO, the IMF, the World Bank—all the major multilateral economic institutions went along without batting an eye as an economy that did not play by the rules was integrated into the global system. China maintains massive non-tariff barriers, systematically subsidizes its state-owned industries, manipulates its currency markets, and engages in technology dumping through intellectual property theft. These practices are well-documented, widely known, and sanctioned by dozens of WTO rulings that Beijing methodically ignores. The West has collectively chosen short-term growth at the expense of long-term strategic resilience. And now that the bill is coming due, it realizes that its tools for retaliation—tariffs—are insufficient, and that its industrial alternatives—new supply chains—will take ten to twenty years to mature.

What outrages me most about this whole situation is not Trump. Trump is the symptom, not the disease. What outrages me is the liberal establishment that, for thirty years, has built the West’s dependence on an authoritarian, expansionist, and revisionist China—and which now presumes to criticize the imperfect solutions of those trying to correct this fundamental error. One can criticize tariffs as a tool. But one cannot absolve those who created the problem in the first place.

A definitive verdict on the effectiveness of the tariff policy

The effective rate of 20.8% that Bloomberg calculates for Chinese imports into the United States in June 2026 is not just a statistic—it is a verdict on the actual effectiveness of a policy that has plunged the global economy into its biggest trade war since the 1930s. The announced rate was 62%, rising to 145% at the height of the escalation. The rate actually collected is 20.8%. The gap—$70 billion in lost protection over thirteen months—is the concrete measure of the divide between Trumpian rhetoric and operational reality. Meanwhile, Chinese exports to the United States rose by 35.4% in May 2026. The trade war has led to more Chinese trade, not less.

This does not mean that China has suffered no damage. Its bilateral trade deficit with the United States has fallen by 50% since 2018. Some sectors have been disrupted. Companies have relocated to Vietnam, India, and Mexico. But China’s industrial power as a whole has continued to grow, move upmarket, diversify its markets, and strengthen its strategic levers—rare earths, critical minerals, and mid-tier semiconductors. This is not a victory for China in the sense of a power that has imposed its terms. It is a victory in the sense of a power that has withstood maximum pressure from its adversary and stayed the course.

A Strategic Warning for the West

The West needs a strategy for China. Not ad-hoc tariffs, not staged summits, not successive truces that resolve nothing fundamental. A strategy that coordinates allies—Europe, Japan, South Korea, Australia—around common rules on critical supply chains, technological standards, and investments in alternatives to Chinese inputs. A strategy that clearly distinguishes between what can continue to be traded freely with China and what constitutes an unacceptable strategic dependency. Neither Biden nor Trump has formulated this strategy with the consistency and sustainability it requires. And every year that passes without it is another year gained by Beijing in its race for industrial and technological dominance in the 21st century.

By Maxime Marquette, columnist