HOW TRUMP'S TRADE WAR BENEFITS CHINA

'Might Makes Right' is Failing

by Bill Paton, Xishuangbanna, 31 March 2025

China's new maglev train in Shandong has a top speed of 600 kph, the fastest train in the world.

An old German military quote holds that no plan survives the beginning of battle. While it is not evident the Trump administration has any clear plans, a growing body of evidence suggests the U.S. Trade War is producing unintended consequences.

Far from crippling China's economy, as both Trump and Biden intended, US trade wars have especially accelerated China's technological independence and innovation. They have also diversified its trade relationships, forced beneficial structural reforms that make its economy more resilient, demonstrated superior Chinese crisis management, forged strategic counter-measure capability, and—perhaps once and for all—shattered any lingering belief around the world in the USA's 'moral superiority'.

1. Accelerating China's Technological Independence

One of Trump‘s primary objectives, copied by Biden, has been to stifle China's technological advancement through export controls and sanctions, particularly targeting semiconductors and advanced computing. These measures have instead galvanized China's push for technological self-sufficiency and leadership. As noted by Chinese scholar Wang Wen, "It wasn't until events like the 2018 arrest of Huawei Chief Financial Officer Meng Wanzhou and the crackdown on Chinese tech firms [notably, Tik Tok], that the country fully committed to innovation" . By 2024, China had achieved remarkable progress in semiconductor manufacturing, with chip exports reaching $159 billion—nearly double 2018 figures and surpassing even smartphone exports.

China's research and development spending tells a similar story. During Trump's first administration, China raised its R&D spending dramatically, now an impressive 2.7% of GDP. Top centres of innovation such as Shenzhen can reach 6.5%. Past investments, as part of China's industrial strategy, brought success in many new industries such as electric vehicles, lithium battery technology, and solar panels—where China is now the global leader.

The scope and scale of Chinese innovation today is soaring. Today's investments are in future science and cutting edge technology, including on neutrinos, robotics, AI and fusion power. The world's first commercial fusion/fission power generation plant is now being built in China and will go online in 2031-33. Countless other advances include new photonic micro-chips, using light instead of electricity, that may one day replace conventional microchips, and the most advanced gallium chips.

Another startling area of innovation is quantum computing and communication, where China has the first functional quantum communication links, by satellite, most recently with South Africa. There are also important new cures for cancer coming out, including a new drug that showed 100％ survival after four year for patients with advanced lung cancer, an often fatal disease. Chinese treatments are expected to be more than ten times cheaper than their Western equivalents. Xpeng, meanwhile, has begun building a factory in Guangdong that will manufacture flying cars, an industry they now expect will become much bigger than EVs. Food delivery by flying drone is already a part of daily life in Shenzhen where Meituan made 100,000 flying deliveries of takeout food last year. Shenzhen-based DJI is the world leader in drone technology, with 70% of the market.

China has also successfully tested a jet engine capable of flying 20 times faster than a passenger airliner (Mach 16). 'Space Technology' has successfully tested its prototype airplane, and will test fly a first edition of its full-scale passenger airliner in 2027, that can fly a 10-hour flight in just 2 hours. It will begin commercial operation in 2030 (in China, such things are almost always completed on schedule). Flying at Mach 4, the plane produces almost no 'sonic boom', and so can use any airport or route used by conventional airliners. COMAC, maker of China's C919 and C929 airliners, has designed a supersonic passenger plane, the C949, that flies at Concorde speeds (Mach 1.6), but much further, without the sonic boom, and carrying all passengers in business-class style seats. It will fly from Shanghai to Los Angeles in 5 hours and compete with Space Technology.

I doubt many readers in the West will have heard about these spectacular advances, for their corporate press know they don't want to. This is despite the fact that leading figures such as Singaporean diplomat, Kishore Mahbubane, or American economist, Jeffrey Sachs, have been pointing out for years that the U.S.A. can't stop China's rise. The Western corporate media's reaction to such thinkers is, for example, to stop publishing Sach's work, even as bodies such as the European Parliament invite him to speak.

While the technological deceleration Trump sought to impose instead became an accelerant for Chinese innovation, politicians like himself can still bluff for now, adequately mollifying their constituencies with frequent, loud bursts of braggadoccio. However, over the next decade it will become increasingly difficult to avoid confronting reality, all too apparent that in many new fields, China is taking the lead.

2. Diversifying China's Global Trade Relationships

Trump's tariffs have compelled China to reduce its reliance on the U.S. market and cultivate alternative trade partnerships, particularly with the Global South. This strategic diversification has made China's trade profile more resilient and balanced, a key stroke that countered Trump and Biden.

Between 2018 and 2024, China's trade with non-Western nations grew by over 40%, while its dependence on U.S. trade declined from 17% to just 11% of its total trade. Trade during those years also grew steadily. The Belt and Road Initiative has been particularly successful in deepening these relationships, with annual trade growth exceeding 10% with most of China's Global South partners, and that rate holding steady.

Both ASEAN (16%) and the EU (15%), have become more important markets for Chinese exports than the U.S.A. This geographic diversification has insulated China from overexposure to any single market, including America's, and poised it as perhaps the most resilient power in any trade war. The maximum impact Trump's new tariffs could have on China is a 0.48% reduction in GDP in 2025 compared to its target of 5% growth. Additionally, any such impact is likely to be easily offset by increased trade with other countries, both the current steady growth and also additional growth as other countries also diversify their trade and engage with China more in reaction to Trump's tariffs.

3. Strengthening Domestic Economic Foundations

The trade war has prompted China to undertake structural economic reforms that have strengthened its domestic foundations. Facing external pressure, China is making more progress re-balancing toward domestic consumption and innovation-led growth.

China's persistent trade surpluses were actually sub-optimal, representing capital that could have been better invested domestically to raise productivity and living standards. The trade war has helped China to address this imbalance, focusing more on domestic development, something Beijing had as a goal for years but struggled to accomplish.

Recent policy shifts reflect this re-balancing. China's 2025 economic priorities emphasize maintaining stable growth through higher deficit-to-GDP ratios, rate cuts, and ultra-long-term special treasury bonds. The Politburo has also committed to more active counter-cyclical adjustments, representing the greatest policy shift since 2008.

These reforms have made China's economy less dependent on exports, with the total exports-to-GDP ratio falling to 18%—still higher than the U.S. and Japan, but moving in the right direction. Trump's trade war gave Beijing's long sought economic re-balancing a new sense of urgency.

4. Demonstrating China's Crisis Management Superiority

The trade war has provided opportunities for China to showcase its effective governance model in contrast to America's political dysfunction.

A striking example occurred in January 2025 when both countries faced natural disasters simultaneously. A 6.8 magnitude earthquake in Tibet saw Chinese authorities swiftly transition from emergency response to recovery, relocating 50,000 residents within a day. Meanwhile, wildfires in Los Angeles raged for over 10 days amid political infighting, causing unnecessary damage surpassing the 9/11 attacks. Such demonstrations of effective governance during the trade war period have bolstered China's international image and domestic confidence.

5. Forging Strategic Countermeasures Capability

China has developed sophisticated tools to respond to U.S. trade actions, turning tariff battles into opportunities to assert economic sovereignty. Recent moves demonstrate China's growing confidence in these asymmetric responses.

When the U.S. added Chinese companies to restricted trade lists in December 2024, China retaliated by banning exports of rare minerals like gallium and germanium—with estimated costs to U.S. industries exceeding $3 billion for that one restriction alone. China also launched an antitrust investigation into Nvidia, targeting America's AI chip dominance, a muscular monopoly backed openly by Washington.

In early 2025, as Trump threatened new tariffs, China prepared countermeasures including tariffs on U.S. agricultural products. It also filed a WTO complaint and expanded export controls on strategic minerals. These calibrated responses show China's ability to identify and exploit U.S. vulnerabilities, a strategic approach contrasting with Trump's blunter threats.

6. Shattering any Lingering Belief in U.S. 'Moral Superiority'

For decades, the U.S. has trumpeted democracy and human rights while simultaneously overthrowing elected governments, torturing prisoners and holding them for 20 years without trial in Guantanamo Bay, supporting genocide in Gaza, hogging Covid-19 vaccines until they expired, and on and on. Despite such outlandish hypocrisy, there still persisted an irrational belief in 'U.S.A. the saviour' among some in the West.

Trump, thankfully, has delivered the coup de grace to that illusion. Finally we have a U.S. President who openly admits he feels no moral obligations whatsoever, nor any allegiance to longtime allies, nor any particular preference for countries governed through multi-party elections, nor any concern for human rights, including in many cases, the rights of Americans.

Trump's hatcheting of aid is predicted to cause nearly three million extra deaths of people living with HIV/AIDS, for lack of treatment, this despite the fact that the U.S.A. commitment to fighting AIDS was launched under Pres. George Bush Jr. and has created the very dependency on funding drug supply which may now kill so many.

" 'America' (since we're renaming the world map), is all of North, Central and South America. It is not just one country, any more than Germany is 'Europe'."

Trump's withdrawal from the Paris Agreement for the second time, and utter denial of climate change, stands in stark contrast to China whose non-fossil-fuel power capacity has just topped 59% of its total installed power capacity, and is expected to meet China's declared target of 60% non-fossil fuel power generation (green plus nuclear), by the end of 2025. This is a truly amazing feat by 1.4 billion people.

Most revealingly, Trump has openly stated that he would invade Greenland if that is the only way the U.S.A. could take possession of the island, invade Panama if necessary, take Gaza, and force Canada to submit to annexation, through economic coercion. Trump's threats are serious and should not be dismissed, as he does not have a record of giving up on his mad causes. The U.S.A.'s open betrayal of the most basic rule of the post-WW II international order—respect for the sovereignty of other states—has shocked the entire world.

Domestically, the turmoil of America's dysfunctional politics had entered a new era, one in which it is attacking itself and its own supposedly cherished values, including separation of powers among the executive, judiciary and congress, freedom of speech and rule of law in general. Amazingly, Trump has made it clear that he is "not joking" that he intends to accost the constitution somehow, in order to remain in power after his second term, possibly leading the U.S.A. into a post-democratic era.

China, in contrast, looks reassuringly stable and sensible, not given to invading other countries, nor given to starting wars. China does not fester in endless domestic political turmoil, and remains committed to keeping its—well—commitments (such as Paris), including its trade agreements, its promise to promote free trade, to support (not suppress), the development of the Global South, and to respect all other international accords it has signed.

It is impossible to overestimate the damage to any future prospect of U.S. leadership that has been done already this year by Trump's 'my might makes right' mantra. No significant remnant of U.S. 'moral leadership' will remain. Without that respect, not even begrudgingly as before from its former allies, U.S. leadership will in future be based on fear and force alone, entering the next phase of 'America's' long decline. By the way, 'America'—since we're renaming the world map—is all of North, Central and South America, not just one country, any more than Germany is 'Europe' or China is 'Asia'."

Conclusion: The Unintended Consequences of Economic Conflict

Donald Trump's trade wars have produced outcomes diametrically opposed to their intended effects. Rather than weakening China, they have:

1. Accelerated China's technological independence through forced innovation

2. Diversified China's trade relationships away from U.S. dependence

3. Strengthened domestic economic foundations through necessary reforms

4. Showcased China's governance advantages during parallel crises

5. Developed sophisticated asymmetric response capabilities, and

6. Demonstrated U.S. moral bankruptcy.

By 2028, Chinese citizens may indeed look back at this period and say, as Wang suggested, "thank you, Trump"—not for his intentions, which were highly dishonourable, but for the unintended competitive advantages his policies created. The ultimate irony of Trump's trade wars may be that in seeking to make America great again, he will have inadvertently helped make China greater—more innovative, more self-sufficient, more strategically positioned in the global economy, and more appreciated. As China continues to turn challenges into opportunities, the long-term beneficiaries of Trump's trade policies will not likely be American workers; there is little chance of that. They will most likely be Chinese scientists, workers and professionals.

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