Three days after President Trump imposed a 25% tariff on Canadian goods and a 10% tariff on Chinese goods, Canada capitulated. The country agreed to Trump’s demands for a temporary one-month suspension of the tariffs. China, however, reacted differently, countering with a series of precise and calculated measures designed to show its resolve.

Beijing introduced four key responses. First, it imposed a 15% tariff on U.S. coal and liquefied natural gas and a 10% tariff on crude oil, agricultural machinery, and large-displacement vehicles. Next, China enacted export controls on rare earth elements, such as tungsten and tellurium. Companies like PVH Group and Innolux also found themselves on China’s list of unreliable entities. Finally, an antitrust investigation was launched against Google.

While Canada folded under pressure, China’s response was to dig deeper. It implemented tougher, more diverse countermeasures that reflected its evolving confidence and strategic readiness. After nearly eight years of trade conflict, China has emerged stronger, more resilient, and better prepared to counter U.S. tactics.

Trump’s initial trade war, launched in 2018, burdened Chinese exports to the U.S. with average tariffs of around 19%. However, over time, China’s population has grown accustomed to such economic pressures. At this stage, a fresh 10% tariff feels more like a nuisance than a genuine threat.

Trump’s core objectives, meanwhile, remain unfulfilled. The trade war has only entrenched China’s advantages. Since 2018, China’s total trade volume has risen by 44%, with an 8% increase in trade with the U.S. Its trade surplus with the U.S. has expanded by 13%. Far from disentangling the two economies, Trump’s efforts have deepened China’s dominance.

Moreover, the share of U.S.-China trade in China’s overall trade volume fell from 14% in 2018 to 11% in 2024. This shrinking percentage underscores the diminishing role of the U.S. in China’s trade priorities.

Rather than weakening China, U.S. tariffs have galvanized the country’s focus on economic self-reliance. The U.S. technology restrictions have accelerated China’s ambitions for domestic innovation. By 2024, domestically produced chips supplied 30% of China’s technology sector, twice the share from 2018. Huawei has rebounded, achieving full self-sufficiency in chip production and surpassing its pre-trade war revenue. At the same time, new tech giants like TikTok and DeepSeek have risen to prominence.

Trump’s first attempt to subdue China through trade has failed. Eight years later, China is in an even stronger position, and a second trade war is unlikely to end differently. While Trump’s tariff threats might intimidate countries like Canada or Mexico, they barely register with a China seasoned in economic brinkmanship.

China’s confidence is underpinned by its unparalleled industrial capacity. For 15 consecutive years, it has held the title of the world’s largest manufacturer. In 2024, China accounted for 31% of global manufacturing output—nearly twice the share of the U.S. and five times that of Japan. Chinese manufacturers dominate industries, commanding over 50% of the global market, including steel, cement, textiles, consumer electronics, 5G infrastructure, and drones.

These capabilities translate into a vast export portfolio of essential goods for the American market. Products like electrical machinery, furniture, toys, and textiles are integral to everyday life in the U.S. A staggering 70% of mobile phones sold in America are manufactured in China, as are 95% of the nation’s best-selling toys. Imposing tariffs on these goods will ultimately hike prices for American consumers as costs ripple through supply chains.

An even starker contrast can be seen in the composition of U.S. exports. In 2024, America’s top three exports—refined petroleum ($133 billion), crude oil ($115 billion), and natural gas ($95 billion)—accounted for a quarter of its total exports, valued at $1.44 trillion. In contrast, U.S. exports of automobiles ($57 billion) and integrated circuits ($50 billion) were less than half of China’s output in these categories. China exported $117 billion in automobiles and $159 billion in chips in 2024.

These figures illustrate a troubling shift. The U.S., increasingly reliant on natural resource exports, is losing ground in global manufacturing competitiveness. Tariffs, touted initially as a means to revive American industry, have weakened it. They have driven up consumer prices and failed to deliver the promised results.

For Trump, tariffs serve primarily as a political tool, bolstering his image as tough on China in the eyes of voters. But this is largely symbolic. By blaming foreign competition, he diverts attention from deeper structural problems in American manufacturing. The real consequence of these policies is economic harm to American businesses and households.

If major trading partners like Canada, Mexico, and the European Union retaliate with their own tariffs, the effects could be severe. Declines in U.S. resource exports and rising inflation could plunge the economy into instability. Trump’s trade strategy reflects a broader shift in America’s role on the global stage: from an economic leader to a regional power caught in the throes of trade conflicts. Far from making America great again, these policies risk hastening the nation’s economic decline.