Trump’s 2.0 America Is All About Closed Borders And High Tariffs. But Why Is China Taking The Opposite Route?
While the United States under Trump is looking inward, tightening its borders and escalating trade wars, China is doing the exact opposite – it is opening its doors, expanding global trade, and cementing its status as the world’s manufacturing and technological hub.
But why is there a sharp contrast in economic policies between the two nations, and is the United States turning away from globalization at the worst possible time?
The American Fortress
In his second term, Donald Trump’s approach to global trade has been crystal clear – tariffs, tariffs, and more tariffs. His administration believes that by making foreign goods more expensive, the US can force companies to bring back manufacturing jobs, reduce trade deficits, and protect domestic industries. But does this strategy really work?
In his first term, Trump imposed tariffs on steel, aluminum, and Chinese goods, claiming it would benefit American workers. Fast forward to today, and he’s doubling down, slapping new tariffs on Canada, Mexico, and even the European Union.
However, the reality on ground is different from his vision.
For one, tariffs don’t magically bring back industries lost decades ago; they increase costs for businesses and consumers. History shows that economies don’t thrive in isolation especially when their biggest competitor is playing a smarter game.
And this is where China comes in.
China’s Open-Door Strategy
Unlike the US, China is embracing globalization with both arms. Trump’s agenda is raising barriers; on the other hand, China is tearing them down, particularly for the Global South.
To put it in perspective, as of December 2024, China has completely eliminated tariffs on goods from the least developed nations, positioning itself as the go-to economic partner for emerging markets.
Hence, China’s play is strategic. It’s securing future markets, diversifying trade partners, and making itself indispensable to global commerce. The Chinese government wants the world to view China as an economic opportunity, not a threat.
And the latest numbers back this up. China’s trade surplus with the world is a staggering $1 trillion, and in 2023, it accounted for 14% of global exports, almost double the 8.5% share of the US.
China’s Global Expansion Through BRI
China is not just a trading partner it is building across the world. Through the Belt and Road Initiative (BRI), it is funding infrastructure projects in 150 countries, ensuring that its supply chains remain strong and that trade routes work in its favor.
The plan is simple, make China the heartbeat of global trade.
China is expected to contribute 45% of the world’s manufacturing output, up from the current 35% by 2030. It has achieved this by prioritizing infrastructure, a highly competitive industrial ecosystem, and investing heavily in technology.
If we were to take the latest example of this, it would be DeepSeek, the AI startup that is shaking up the artificial intelligence sector, proving that China is not just the world’s factory but also an innovation powerhouse.
More Than Just a Manufacturing Giant
Despite the slowdown in China’s economy, it still grew by almost 5% in 2024, with even greater potential as it transitions into a high-tech, consumption-driven economy. By 2030, it will have 1.1 billion consumers, making it the largest market in the world.
What is even more interesting is that while only 7.8% of China’s population has a bachelor’s degree, it is churning out 65% of global STEM graduates every year, far surpassing the US.
The implications of this is huge as it signals a workforce ready to dominate AI, robotics, and advanced manufacturing.
However, China still faces challenges. It needs more infrastructure investment in smaller cities and rural areas, and it must manage the societal impact of automation. Still its ability to scale operations at a level unmatched by any country, except maybe India, thereby giving it a unique edge.
The Problem Of American Debt
While the U.S. is the biggest consumer economy in the world, the fact is, it’s running on borrowed money.
It is not only the everyday Americans who are drowning in debt to keep up their spending habits but also the government. Right now, the national debt has crossed a staggering $36 trillion, while consumer debt hit $17.5 trillion in 2024.
Now many may be wondering why is it that the U.S. can rack up such massive debt without immediate collapse, it is because the dollar is the world’s reserve currency.
But this is where things get tricky, the U.S. has weaponized this status, freezing the assets of other countries and using its financial dominance to enforce American laws and sanctions beyond its borders.
And as expected, not everyone is happy about this.
The BRICS bloc—Brazil, China, Egypt, Ethiopia, India, Indonesia, Iran, Russia, South Africa, and the UAE—is leading a push to ditch the dollar in favor of alternative financial systems.
And Trump’s response was as expected. He is threatening to slap 100% tariffs on any country that dares to move away from the greenback.
The American economy has been propped up by asset bubbles for years, but beneath the surface, things aren’t looking great. Measures of social well-being are declining, and the country is facing increasing instability, politically, economically, and socially.
China’s Growing Grip on Global Trade
In context, China’s exports to the Global South have already surpassed what it ships to the West and Chinese brands and products dominate markets across Asia, Africa, and Latin America.
For many developing nations, China is the go-to for affordable, high-quality technology and industrial goods. This is applicable even for wealthier nations as they benefit from China’s industrial efficiency, though often at the expense of their own domestic industries.
While some governments have and may try to block Chinese imports to protect local businesses, (India) but the reality is, completely cutting off trade with China is almost impossible because of its ever-expanding manufacturing dominance, China has become a global necessity.
It seems that the world is shifting into a new phase of globalization. Many countries now find themselves stuck between a rock and a hard place trying to avoid economic retaliation from the U.S. while figuring out how to leverage China’s industrial powerhouse without becoming overly dependent on it.
The US vs. China Is A Battle of Economic Philosophies
Trump’s approach to trade is rooted in nostalgia, a longing for an America that dominated global manufacturing post-World War II, hence MAGA (Make America Great Again) but perhaps those days are long gone.
China’s decline in the 19th and 20th centuries was due to historical factors that no longer apply, and its resurgence is not a fluke but a result of strategic planning, investment, and execution.
The US, on the other hand, is making moves that could further weaken its global standing – tariffs won’t bring back lost industries, nor will they make American exports competitive.
Instead, they make goods more expensive, push businesses to look elsewhere, and ultimately strengthen China’s position as the world’s industrial leader.
The Last Bit
While Trump is closing doors, China is throwing them wide open. And if there is anything that we have learnt when it comes to global trade – the one who builds bridges, not walls, is the one who stays ahead.
Therefore, to truly compete, the US doesn’t just need tariffs. What it needs is a government that can plan long-term, invest in education and infrastructure, and embrace technological advancements. But under Trump, that capacity is weakening by the day, as he stands strong in his convictions that he hopes will make America great again.
In contrast, China is playing the long game, and winning.
