Sino-US Trade War 2025: What’s Happening Now and What Comes Next?

Explore the escalating Sino-US trade war under Trump’s unprecedented tariffs, its economic implications, and the geopolitical tensions shaping global relations in 2025.

2025 is a year destined to go down in world history, and all the events that happened in this year are worth becoming our precious memories in the future.

Since Trump took office, he has been clamoring to increase tariffs on China to as high as 60%. This is what we know, but what we didn't expect was that Trump could raise the tariffs so high.

Since Trump announced the so-called "Liberation Day" tariffs on April 2, the US tariffs on China have been increasing layer by layer, from the initial 25% to 50%, then to 84%, and finally to an astonishing 145%.

What is even more surprising is that Trump imposed a 100% tariff on China on top of the 145% tariff, reaching an unprecedented 245% tariff!

It should be noted that the highest tariff in the history of the United States was only more than 50% stipulated by the Smoot-Hawley Act passed in the 1930s.

However, in the tariff executive order of the 47th President of the United States, Donald Trump, the tax rate far exceeds that of the 1930s.

Such a crazy tax increase will naturally trigger a fierce reaction from the entire market.

Since Trump announced the "Liberation Day" tariffs, the US stock market has continued to decline, whether it is the Dow Jones Index or the Nasdaq, all the stock-related indexes you know are falling. This is actually a small matter.

The more fatal thing is that the US Treasury yield has begun to rise gradually. By April 8, the US 10-year Treasury yield has exceeded 4.7%, approaching the dangerous 5%.

Faced with an extremely critical situation, Wall Street publicly warned Trump that a major crisis might occur in the financial market, and U.S. Treasury Secretary Bennett also rushed to the White House to meet with Trump in person and explain the interests involved in detail, which forced Trump to suspend global reciprocal tariffs on April 9 and only retain tariffs on China.

After the failure of the comprehensive tariff war, Trump, like a crazy gambler, vented all his anger on China. As we mentioned before, Trump raised tariffs on China from 25% to 50%, then raised them again to 84%, and finally increased them all the way to 145% and 245%.

However, the US's crazy increase in tariffs on China actually has the same effect as the so-called comprehensive "reciprocal tariffs", which is to create more uncertainty in the entire US financial market. More importantly, due to Trump's crazy tariff policy on China, the prices of goods in all US stores have begun to rise sharply, and when merchants print receipts, they will add a bracket: Trump tariffs.

This seemingly small text contains the general disgust and anger of Americans towards Trump's tariffs.

Why does Trump impose so many tariffs on China and the world?

On the surface, Trump looks like a crazy gambler who is willing to vent his nameless anger at all costs. But in fact, this is not the case.

Maybe Trump's approach of imposing tariffs is somewhat irrational, but this does not mean that Trump is a madman. As a former real estate businessman, Trump is definitely not trying to destroy the US economy. On the contrary, Trump is trying to save America.

In fact, there is only one reason why Trump raised taxes: the United States’ debt burden is too heavy.

We all know that since the establishment of the Federal Reserve in 1913, Wall Street has completely controlled the United States. They control the United States not through guns and bullets, but through currency. The Federal Reserve has never been a government agency, nor does it obey the elected parliament, but a naked private banking institution.

This is true whether we look at the shareholder structure behind the Federal Reserve or the way the Federal Reserve operates.

From the perspective of shareholder structure, according to incomplete information disclosure, the Federal Reserve was initially controlled by several banks, namely: Citibank, Hanover Manufacturing, Chase Manhattan, Morgan Trust, etc. Hanover Manufacturing is also a bank, and its controller is the Rothschild family.

From the perspective of operation, the core decision-making body of the Federal Reserve is the "Open Market Committee". Most of the members of this committee are from the regional banks of the Federal Reserve. They are not controlled by Congress or the president, but obey the orders of the giants on Wall Street. The chairman of the Federal Reserve is just a rubber stamp of the Federal Reserve in Washington.

He/she is just executing the orders of the Open Market Committee. Not to mention that the president cannot decide the candidate of the Federal Reserve Chairman. Even if a strong president like Trump replaces the Federal Reserve Chairman through various means, the Open Market Committee still operates according to its own will and will not be restrained by the new Federal Reserve Chairman.

In other words, the Federal Reserve Chairman in Washington is just an executor of the Federal Open Market Committee of the Federal Reserve in New York, not a decision maker.

In other words, the United States has been deeply controlled by Wall Street since 1913. Although the currency issued by the Federal Reserve is called "dollars", it is not the currency of the United States, but only the banknotes of Wall Street. If we cannot understand this, then we cannot understand everything that is happening today.

Although the United States is deeply controlled by Wall Street, the dollar was on the gold standard from 1913 to 1971, so the impact on the United States was not particularly large. But after 1971, Nixon announced that the dollar was decoupled from gold, and since then, the dollar has officially become a debt currency.

The emergence of this situation has caused the United States to fall into a deep debt trap since 1971. Although the use of debt to tie up a country's currency issuance is the "standard" implemented by bankers such as Rothschild in continental Europe, in the United States, this situation has only appeared in large numbers after 1971. After 1971, the US national debt began to soar wildly.

From ancient times to the present, the monetization of fiscal deficits is an addictive poison. Once you are addicted to it, it is difficult to extricate yourself, and the United States is a severe patient of this poison.

According to statistics, the total size of the U.S. national debt has exceeded the astonishing upper limit of 36 trillion U.S. dollars, and the annual expenditure for debt repayment is as high as 1 trillion U.S. dollars! Such high debt repayment costs will sooner or later overwhelm the fragile U.S. financial system. Therefore, as the President of the United States, Trump must solve this problem, otherwise, the United States will have no tomorrow.

The tariff war is Trump's means of paying off his debts.

Trump certainly understands that it is impossible for the United States to pay off such a high US debt, so defaulting on the debt becomes the only and inevitable option. However, if he openly defaults on the US debt, it will have the opposite effect, that is, the US dollar will collapse, which is something Trump absolutely cannot bear.

What should Trump do? Trump has only one way left, which is to force countries around the world that hold U.S. debt, including China, to give up their holdings. This is the content of the Mar-a-Lago Agreement that Trump is pushing.

For Trump, reducing the trade deficit is just an excuse. The real purpose is to reduce the size of the US national debt, or in other words, to default on the US debt. The Mar-a-Lago Agreement serves this purpose.

Although there are many differences in the various versions of the Mar-a-Lago Agreement, the basic terms are the same. For example, the U.S. Treasury bonds held by various countries will be replaced with 100-year bonds, which cannot be traded and cannot earn interest. This is equivalent to the United States freezing the foreign exchange reserves of various countries in disguise. No country can agree to such a condition, so Trump's tariff war is imminent.

Trump's tariff war is doomed to fail

Through the above discussion, it is not difficult to find that the essence of Trump’s tariff war is to force countries to sign the Mar-a-Lago Agreement to abandon U.S. debt through the tariff war, so as to default on U.S. Treasury bonds and enable the United States to lighten its load and continue to rule the world.

This idea is indeed very good, but unfortunately, the world today is no longer a place where the United States can unilaterally do whatever it wants. In particular, the rise of emerging economies represented by China, Russia, India, and the European Union has made it impossible for the United States to unilaterally seize the wealth of countries around the world through rogue means.

Whether it is the "Liberation Day" tariffs imposed by Trump on the world or the high tariffs imposed on China, they will eventually face a painful failure.

Because other countries are not fools, they also have the right to develop and pursue happiness. In the past, the United States was strong, but now there are emerging powers such as China and Russia and etc. The people of the world will no longer spoil the United States as they did in the past.

It is not that the world is unwilling to help the United States solve its problems. In fact, the world would rather see a healthy United States, because many countries' trade also depends on the US market. However, the United States cannot use rogue means such as extreme pressure to force other countries to comply, but should achieve its goals through equal dialogue and multilateral cooperation.

As long as the United States is willing to have an equal dialogue with other countries in the world, other countries in the world will be happy to help the United States, whether it is helping the United States restore its manufacturing industry or helping the United States reduce its debt. We can even carry out a major global debt restructuring, which is all possible.

If the United States wants to solve its own problems, it must learn to have equal dialogue with China and other countries, instead of using rogue means to force other countries to submit as it did in the past. If the United States does not let the world live well, then the world will not let the United States live, and it will be a life-and-death struggle, a world war.

The future trend of the Sino-US tariff war

We have said before that the fundamental purpose of Trump is to reduce the debt and save the United States. But now the situation has changed. That is, the attitude of the United States towards China has undergone a rare change.

According to the Wall Street Journal, Trump is considering reducing tariffs on China from 245% to 60-65%, and some non-critical daily necessities will be reduced to about 35%. This is a noteworthy change.

Another notable shift is that China has not reversed its decoupling policy from the United States. In fact, China has intensified its decoupling from the United States in some respects.

The reason, of course, is that China no longer trusts the United States.

China has lost trust in Trump due to his erratic character and gangster habits. This is understandable. Faced with a gangster who changes at any moment, even if an agreement is reached with him, he will go back on his word. Instead of doing this, it is better to wait and see.

As the Greek Finance Minister said,

unless (China) inflicts a major blow to the United States and causes heavy losses to the United States, (China) should not reach an agreement with the United States.

In other words, Trump must make major and sincere concessions, otherwise China will not engage in any form of negotiations with the United States.

So now the question is, will Trump give in? We hope that Trump will give in to reach an agreement that is beneficial to both China and the United States. But Trump is not someone who will easily admit defeat. If he insists on fighting a trade war with China and exacerbates tensions between the two sides, such as what U.S. Treasury Secretary Benson said, he will remove all Chinese companies in the United States or confiscate Chinese assets in the United States.

If that is the case, then military conflict between China and the United States will be inevitable, that is, the Third World War may happen in 2025. We hope it won't, but it is possible.