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US president Donald Trump’s reciprocal tariff shocker  unleashed on April 2 has spiralled into a “Clash of the Titans” between the US and China, sparking a full-blown trade war.
Trump declared economic war on the rest of the world, imposing a universal 10% duty on all imported goods, and topping it up with additional tariffs on some 90 countries, including Malaysia.
Trump’s grand plan was to use high tariffs to punish countries having a trade surplus with the US and imposed unfair trade barriers on US goods, in the hope it will catalyse the reindustrialisation of the US.
He warned the affected countries not to retaliate, threatening even higher tariffs if they did. Most countries fell in line and opted to negotiate.
However, Trump’s threat of escalation fell on deaf ears when it came to China, which responded with a 34% counter tariff on US goods.
In a series of tit-for-tat moves, Trump slapped China with even higher tariffs and China responded in kind. When the dust finally settled, the US had hit China with a mind-blowing 145% tariff in total while China’s tariff on US goods touched 125%.
This clash of the two biggest superpowers is more than just a trade war. It is a battle for world dominance in the 21st century, with the US desperate to keep its No. 1 position even as China seeks to dethrone it.
Interestingly, this contest can be framed as a battle of two philosophies — Trump’s art of the deal and China’s art of war.
The “Art of the Deal” is Trump’s 1987 ghostwritten bestseller in which the former real estate mogul lays out his dealmaking strategies that transformed him into the “King of Dealmakers”.
As highlighted in the book, Trump’s deal-making thrives on chaos, intimidation, and theatrics.
The “Liberation Day” tariff mayhem he unleashed on both friend and foe has all these elements, sparking chaos and grabbing the world’s attention.
His tactic of intimidating countries which contemplated retaliation worked a treat except with China.
Led by President Xi Jinping, China’s response to Trump is founded on the military strategies expounded in a 2,500-year-old treatise on war by Sun Tzu, a brilliant Chinese general and strategist during the Warring States period (475–221 BCE).
His timeless strategies have formed the basis of advanced military training around the world. Even the US Military Academy at West Point utilises “The Art of War” in its courses on military strategy.
No backing down
Sun Tzu emphasises strategic planning, knowing oneself and one’s opponent, picking the right battles, preparation before war, deception and misdirection, leveraging one’s strengths, and adapting to changing circumstances.
Over two millennia ago, Sun Tzu said: “He will win who knows when to fight and when not to fight.”
It is clear China has decided this is one battle that needs to be fought to the very end. In fact, it has been preparing meticulously for this economic decoupling for close to a decade.
Nobel Prize-winning American economist Joseph Stiglizt said China has not been taken by surprise by Trump’s tariff war. Instead, it is “well prepared” to deal with it.
“During the first Trump administration, they began the process (of preparation), and have anticipated what the US is now doing,” the former World Bank chief economist said in a recent interview.
Asked if Trump’s tariff war was vintage Art of the Deal, he said: “No, this is vintage chaos. That is the trademark of Donald Trump, and it is very dangerous.”
Trump blinks
In a high stakes poker game like this, the party that blinks first will likely be shown to have a losing hand.
Crucially, Trump has already blinked twice. The first instance was when he announced the 90-day pause in rolling out the tariffs, a week after unveiling it.
His climbdown came on the heels of global equity markets plunging, erasing over US$6 trillion in value from US markets, and its bond market blowing up.
The White House was quick to frame Trump’s tariff pause as a shrewd Art of the Deal tactic, which saw markets rebounding strongly.
Two days later, Trump blinked again when he exempted smartphones, computers and other consumer electronics from his tariffs.
This was another big win for China as that means its high-tech products exported to the US, worth US$127 billion in 2024, will be exempted from the tariffs.
In 2024, US imports from China totalled US$439 billion while exports to China amounted to US$143.5 billion. This means the US’ reciprocal tariffs is applicable to only US$312 billion of Chinese exports, based on 2024 figures, or 8.7% of China’s total exports, a hit it can quite easily absorb.
China’s counterstrikes
In this confrontation, Trump believes he holds more winning cards than China. However, he may well be mistaken given that China has multiple weapons in its arsenal. It has since launched surgical counterstrikes targeting the US’ Achilles heels.
China, which has a virtual monopoly on extracting and refining rare earths, has imposed export controls on a range of these critical minerals, and magnets.
These are crucial to a wide range of high-tech goods manufactured by the US, from batteries, electric vehicles, renewables to weapons systems and medical devices.
By restricting access to these minerals, China can potentially do serious damage to the US defence industry and undermine Trump’s reindustrialisation plans.
China gave another slap to Washington when it ordered its airlines not to take further deliveries of Boeing commercial planes last week. Its top three airlines are due to take delivery of 179 Boeing planes between 2025 and 2027.
The move will have a devastating impact on Boeing, which counts China as its biggest market. The company contributes about US$79 billion to the US economy annually, supporting 1.6 million jobs both directly and indirectly.
However, the biggest weapon China has is its US$3.24 trillion in US dollar assets including US$785 billion worth of US treasuries or bonds.
Trump was spooked by the selloff in treasuries following his tariff announcement, spiking up the yield or interest rate on 10-year treasuries and forcing him to pause the tariffs.
There was speculation that Japan, which owns some US$1.13 trillion of US bonds, and China were selling their treasuries.
For China, ramping up selling of its US treasuries would be the nuclear option in its economic war against the US.
With the US national debt at US$36.2 trillion, and due to refinance about US$9 trillion this year, higher interest rates would inflict huge pain on the US economy.
Irreparable damage to US soft power
In “The Art of War”, Sun Tzu highlights the importance of exploiting the enemy’s mistakes and weaknesses and deftly taking advantage of those errors.
That is exactly what China has done — letting Trump show to the world the pompous bully that he is and positioning itself as the defender of free trade by standing up to the US.
Trump has arguably done irreparable damage to US soft power by imposing tariffs on the whole world, insulting Canada and Mexico, claiming the European Union exists to “screw” America, and threatening to annex Greenland and Panama.
Canadians are outraged that Trump wants to make their country America’s 51st state and are now boycotting its products and travel to the US. Protests and consumer boycotts on US products are also growing in various European countries including France, Germany, Denmark and Greenland.
“Boycott USA” messages and searches have been trending on social media and search engines, with citizens globally angered by American arrogance, epitomised by its “America First” policy.
The height of Trump’s arrogance was seen in his bragging that over 70 countries were begging the US to relent on its tariffs.
“I’m telling you, these countries are calling us up and kissing my ass. They are dying to make a deal,” he said during a dinner for Republicans recently.
Not to be left out of this widening PR fiasco, Vice-President JD Vance revealed his ignorance by calling Chinese people “peasants”.
With Trump and Vance making such insulting comments, China doesn’t need to do much other than just take the win handed to them on a silver platter.
In a stinging assessment, Stiglizt said Trump had “shot the US in the foot”, and described the tariff moves by his administration as “amateur hour”.
It is patently clear that much of the world has lost patience and trust in the US and no longer sees it as a reliable partner.
While the world was greatly influenced by American political, economic, and cultural value systems in the past, it may now take years for the US to regain its soft power and prestige.
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The views expressed are those of the writer and do not necessarily reflect those of FMT.

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