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The trade war between the United States and China is far from over: While Donald Trump threatens 100% tariffs, China offers zero tariffs to less developed countries and strengthens international influence.
The trade war between the United States and China is far from over, and recent moves by both countries show that the dispute is heating up even more. On one side, Donald Trump, the US president-elect, is stepping up his aggressive stance, threatening BRICS countries with 100% import tariffs on their products. On the other, China is responding with diplomatic and trade strategies, approaching emerging and less developed nations, offering trade advantages that could change the game.
Trump and the protection of the US dollar
Since his campaign, Trump has promised to protect the US dollar from potential threats, especially those coming from the brics group — formed by Brazil, Russia, India, China and South Africa. In one of his posts on the Truth network, Trump made it clear that he will not accept any attempt at de-dollarization. The idea of a common currency for the BRICS, discussed in October during the group's summit in Kazan, Russia, raised alarm bells in Washington.
Trump has threatened to impose 100% tariffs on goods from BRICS countries if they move forward with plans for an alternative currency. “The idea that the BRICS countries are trying to move away from the dollar while we sit back and watch is OVER,” Trump said. He stressed that the United States will not allow the dollar to lose its status as the world’s reserve currency.
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In addition to tariffs, Trump and his advisers are considering other measures to maintain the dollar's dominance, including export controls and taxes on trade with nations that adopt alternative currencies.
China's response
While Trump toughens his rhetoric, China is moving in the opposite direction, opting to build alliances with emerging countries and least developed countries. As of the 1st of this month, Beijing has adopted a new trade policy that exempts all products from countries classified as “least developed” by the UN from tariffs. This includes nations with a gross per capita income of less than US$1.018, most of which are located in Africa.
This measure makes China the first major global economic player to adopt such a broad tariff policy for less favored countries. The expectation is to create new export opportunities for these nations in the vast Chinese market. According to the Chinese Ministry of Commerce, the goal is to strengthen partnerships and help these countries integrate into global trade.
China’s advance in Africa, for example, is nothing new. Over the past 20 years, Chinese investment in the region has jumped from a modest $74,8 billion in 2003 to an impressive $4,23 billion in 2020. And the future promises even more: President Xi Jinping has announced that China will provide $50 billion in financing to Africa over the next ten years.
Technology in the crosshairs of the trade war
Tensions between the United States and China are also reflected in the technology sector. The US Department of Commerce recently imposed new restrictions on China's access to advanced technologies to semiconductor production. Beijing reacted quickly, announcing export restrictions on key materials such as gallium and germanium, used in both civilian and military technologies.
These mutual embargoes show that the trade war goes beyond tariffs and economic partnerships. The dispute is now deeply rooted in the control of strategic technologies that are essential to the future of innovation and national security.
The impact of China's zero tariff
China’s decision to impose zero tariffs on less developed countries goes far beyond an economic measure. It is a strategic move to expand its global influence, especially in regions where the United States has limited presence. In practice, this creates a network of economic dependence, strengthening trade and diplomatic ties with countries that have few resources to negotiate on an equal footing with major powers.
This policy aligns with China’s narrative of being a reliable and supportive partner, as opposed to the more authoritarian stance adopted by the United States under Trump. It reinforces Beijing’s view as an alternative leader in the global economic order.
What to expect from this trade war?
The trade war between the United States and China is far from being just a dispute over tariffs. It is a battle for global economic and technological leadership, with each side using its best weapons. Trump is betting on protectionism and defending the dollar as the central currency of global trade, while China is expanding its partnerships and seeking to reduce its dependence on the US currency in international transactions.
What is clear is that neither side is willing to back down. Trump’s tough stance could cause tensions with traditional allies such as Brazil, while China’s strategy of offering trade advantages to less developed countries increases its influence in strategic regions. At the heart of this dispute is the future of the global economy, which will be shaped by the decisions and alliances made today. It remains to be seen how far these two giants are willing to go to achieve their goals.
We know the intentions of the United States, that is, to subject the poorest and most vulnerable nations to accept and be held hostage by its expansionist policy. China and the BRICS, together with friendly countries, have a fundamental and very important mission: to unite and confront Trump's threatening intentions.