Published on: April 24, 2025 / Updated on: April 24, 2025 – Author: Konrad Wolfenstein
Has the US lost the trade war with China? Trump's trade policy: Between defeat and unpredictable strategy – Image: Xpert.Digital
Politics of unpredictability: Trump remains a factor
Strategic Dynamics: Why Trump Is Not Yet Written Off
The latest developments in the US-China trade war represent a clear defeat for the Trump administration. Nevertheless, it would be premature to write Trump off politically, as his unpredictability and penchant for sudden strategy shifts remain defining characteristics of his presidency. The current reversal on tariffs could simply be a tactical retreat before he goes on the offensive again elsewhere.
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The defeat in the trade war with China
Donald Trump's attempt to cripple China economically through massive tariffs has spectacularly failed. After imposing punitive tariffs of up to 145 percent on Chinese goods, the US government was forced to drastically reverse course within a few weeks. The US president, who initially launched the trade war with great confidence, now faces the ruins of his strategy and is considering reducing the tariffs to around 50 to 65 percent.
The economic consequences of this misguided policy were devastating. Within just four days of the tariffs being imposed, some $9.6 trillion was wiped out on the stock markets . The Dow Jones Industrial Average lost a staggering 4,000 points in 48 hours, marking the first time in its history that it had suffered a loss of more than 1,500 points. This negative development forced Trump to quickly reverse course to prevent further damage to the US economy.
China's strategic superiority
A decisive factor in Trump's defeat was China's skillful counterattack. Beijing strategically leveraged its control over rare earth elements, which are essential for the production of high-tech products and the defense industry. Since China dominates the global market in this sector, it held the upper hand and was able to inflict significant damage on the United States. The People's Republic also imposed retaliatory tariffs of up to 84 percent on US goods and threatened further "decisive and far-reaching" measures.
The economic consequences for American consumers were immediately noticeable: products ranging from vacuum cleaners to food processors became almost 2.5 times more expensive than in March 2025. Many Chinese companies completely halted their shipments to the US, and American firms could not fill this gap quickly enough, leading to empty shelves in US stores.
Project 2025: The blueprint for Trump's radical agenda
Despite this apparent defeat in the trade war, it would be a mistake to write Trump off politically. The so-called “Project 2025” offers insights into his long-term strategy and shows that he continues to pursue far-reaching plans. This comprehensive program, developed by the right-wing Heritage Foundation, aims for a radical restructuring of the US government apparatus and the concentration of power in the hands of the president.
Nearly two-thirds of Trump's executive orders since taking office are said to stem directly or indirectly from this plan. The project envisions sweeping changes across the entire US government, particularly in economic and social policy, as well as the roles of the federal government and federal agencies. This includes, among other things, a plan to replace approximately 50,000 federal employees with politically loyal supporters—a drastic departure from the previous practice of replacing only about 4,000 political appointees during a change of administration.
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Trump's unpredictable negotiating style
Another reason for caution is Trump's unpredictable negotiating style. He relies on quick deals and minimal US commitments to establish himself as an effective negotiator. His strategy is based on a form of realpolitik that abandons idealistic principles and instead focuses on pragmatic solutions. He pursues three main objectives:
- Cost minimization: Reducing the military and financial commitments of the USA in international conflicts
- Quick results: Preference for short-term “deals” over lengthy negotiations
- Domestic political success: staging himself as a capable negotiator and dealmaker to strengthen his political position
The economic risks of Trump's policies
The stock market turmoil initiated by Trump in April 2025 is already being referred to as the “2025 Stock Market Crash” and is currently considered the biggest collapse of the global stock market since the 2020 stock market crash during the COVID-19 pandemic. This development has triggered concerns among economic experts about a “Trumpcession”—a recession caused by Trump’s policies.
The dynamism of the US labor market has slowed considerably. In February 2025, only 151,000 new jobs were created, compared to just 125,000 in January – a sharp decline compared to the 323,000 new jobs in December 2024. Even Trump no longer rules out a recession and speaks of a “transition phase” for the US economy.
The danger of sudden strategy changes
Trump has repeatedly demonstrated his willingness to abruptly change his strategy when under pressure. After imposing high tariffs on April 2, 2025, which he dubbed "Liberation Day," he was forced to quickly backtrack due to negative market reactions. Initially, he suspended the tariffs for the entire world except China, but less than three weeks later, the China tariffs were also practically "history and in the trash.".
This willingness to suddenly change course makes him unpredictable. If his retreat on the China tariffs is interpreted as a sign of weakness, he might be tempted to take a particularly aggressive stance in other areas of foreign or economic policy in order to restore his image as a strong negotiator.
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Trump's foreign policy: Between "peace through strength" and confrontation
In his foreign policy, Trump pursues the motto “Peace through strength.” This strategy could lead to unexpected confrontations, especially if, after his defeat in the trade war with China, he seeks successes in other areas. Trump has already announced that he will meet “very soon” with Russian President Vladimir Putin, whom he accuses of “destroying” Russia by refusing a ceasefire with Ukraine.
His statements on international conflicts are often contradictory and change frequently. For example, he described a ceasefire between Israel and Hamas, which he himself had strongly advocated, as unstable shortly afterward. This inconsistency makes his future actions difficult to predict.
Caution is advised despite current setbacks
Despite his apparent defeat in the trade war with China, Donald Trump remains an unpredictable player on the world political stage. His willingness to make radical policy shifts, his fixation on quick wins, and his personal negotiating style make him a risk factor in international politics.
The current developments in the trade conflict should not be seen as a final failure of his strategy, but rather as a tactical retreat. With “Project 2025” as its ideological foundation and his propensity for unexpected measures, Trump could seek new confrontations at any time – be it in the area of trade, foreign policy, or security policy.
History has shown that Trump often reacts with particular force after setbacks to demonstrate his perceived strength. Therefore, caution is advised: the current defeat in the trade war with China could be just the prelude to new, possibly even more drastic measures with which Trump intends to restore his position as a determined negotiator.
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