▍Introduction: New Phase of US – China Tariff War
On April 11, 2023, the Chinese government announced that it would raise the tariff rate on US goods from 84% to 125%. This policy adjustment clearly sends a signal: when US goods lose competitiveness in the Chinese market, simply raising tariffs can no longer pose substantial pressure on China. As the Ministry of Commerce spokesperson pointed out, the US tariff threat has become a “numerical game,” and its economic effectiveness is fading.
This confrontation presents a different public opinion situation compared to the past – China’s financial sector has rarely reduced controversial voices, and more people are starting to wait and see. Behind this shift is the reality that the globalization system is undergoing profound changes.
▍1. The Challenge to the US Dollar Hegemony System
1.1 The Confusion of US Financial Elites
CNBC commentator Steve Liesman’s remarks are quite representative: “The US only needs to print money to exchange for goods from various countries, and these dollars will flow back to the US financial market, achieving double profits. This system is superior to any ancient empire. We don’t need colonial governors; we only need the WTO and IMF to manage the world. But now the US is regressing to the manufacturing era of 100 years ago.”
This confusion exists not only in the US but also plagues Chinese financial practitioners. The US dollar system should realize capital inflow through trade deficits, ensuring both the US commodity supply and maintaining financial hegemony. Why is it actively breaking this “perfect cycle”?
1.2 The Structural Crisis of the US Economy
Behind the seemingly crazy policies of the Trump administration lies the deep – seated crisis of the US federal finance:
- The corporate tax base continues to shrink, with more than 60% of multinational corporations having negative book equity.
- The industrial supply chain is broken, with key industries such as warship manufacturing experiencing technological gaps.
- Domestic investment has sharply declined, and except for energy – related industries, the main investment flows to China.
The Biden administration once tried to reverse the decline through the “global minimum tax system,” but with little success. The escalation of the tariff war is essentially the US’s attempt to save its real economy.
▍2. The Double Dilemma of Transnational Capitalism
2.1 The Hollowing Out of the Job Market
The relocation of US manufacturing has led to:
- 20 million industrial workers losing high – paying jobs.
- An education gap making it difficult for workers to transition to technical positions.
- A 40% decrease in real wages in the low – end service sector due to the impact of immigration.
Typical cases:
- Fuyao Glass’s investment in the US mainly relies on energy price advantages.
- Boeing’s domestic production capacity has shrunk, and its supply chain depends on global configuration.
2.2 The Dissolution of Technological Advantages
The “Latin American model” of transnational enterprises has failed in Asia:
- China has completed the transformation from imitation (2000 – 2010) to substitution (2010 – 2020).
- India has formed an independent system in the pharmaceutical and IT service sectors.
- Southeast Asian countries have established regional supply chain networks.
Results:
- US enterprises’ revenue in emerging markets has decreased by 35%.
- The risk of outflow of key technological links has increased.
- The patent barrier effect has declined by about 40%.
▍3. The Tearing of US Identity
3.1 Huntington’s Question of the Century
The question posed by US political scientist Samuel Huntington – “Should the US be a sovereign state or a world empire?” – is the key to understanding the current chaos. This division is reflected in:
- Rust Belt workers supporting the return of manufacturing.
- Silicon Valley elites advocating the maintenance of the global system.
- Wall Street trying to balance the interests of both.
3.2 The Essence of Trump’s Policies
The core demands of the MAGA movement:
- Cutting the $80 billion annual overseas military presence expenditure.
- Reducing the $15 billion annual fee expenditure on international organizations.
- Reshaping trade rules to obtain short – term gains.
But the real dilemmas are:
- Rebuilding a complete industrial system takes a 20 – year cycle.
- The skills gap of technical workers needs two generations to fill.
- The shaking of the ally system brings geopolitical risks.
▍4. The Wave of Global Supply Chain Reconstruction
4.1 Two Choices for Enterprises in the US – China Game
Real – life choices faced by enterprises:
- Option A: Stick to the Chinese supply chain (efficiency first)
- Advantages: Complete industrial support, logistics costs are 35% lower.
- Risks: Bear 25% – 35% tariff costs.
- Option B: Build alternative supply chains (security first)
- Status: Southeast Asian factories are only 60% as efficient as those in China.
- Costs: New factory investments increase by 40%.
4.2 Transnational Capital’s Coping Strategies
Actual movements of major enterprises:
- Tesla maintains 90% of the production capacity of its Shanghai Gigafactory.
- Apple shifts 15% of its production capacity to India.
- Samsung establishes a semiconductor packaging base in Vietnam.
Key data:
- The construction of dual supply chains increases enterprise costs by 28%.
- Inventory turnover rates decrease by about 22%.
- Product development cycles are extended by 30 days.
▍5. China’s Responses and Warnings
5.1 The Urgency of Internal Integration
Three major gaps that need to be focused on:
- The per capita GDP gap between coastal and inland areas (4.8 times).
- The gap in digital technology application (a 61% difference in penetration rate).
- The gap in public service resource allocation (a 3.2 – fold difference in education investment).
5.2 The Complexity of External Challenges
Three forms of infiltration that need to be vigilant against:
- The cultural packaging of neoliberalism (issues such as environmental protection and human rights).
- The compliance impact of financial capital (the instrumentalization of ESG standards).
- The invisible control of technical standards (5G and AI ethical frameworks).
Typical cases:
- A new energy enterprise changes its technology route after accepting foreign investment.
- International certification bodies adjust standards, affecting export competitiveness.
- Transnational consulting companies infiltrate the policy – making process.
▍6. The Path to Building a New Order
6.1 The Collective Awakening of Developing Countries
Breakthroughs in recent years:
- The BRICS Development Bank’s loan scale has exceeded $30 billion.
- The African Union has established a regional settlement system.
- ASEAN has unified standards for some products.
6.2 The Fight for Technological Autonomy
Progress in key areas:
- China’s semiconductor self – sufficiency rate has increased to 35%.
- India has built an independent satellite navigation system.
- Brazil has broken through 2000 biopharmaceutical patents.
6.3 The Diversification of the Monetary System
Current pattern:
- RMB cross – border payments have increased by 120%.
- India is promoting the Rupee settlement mechanism.
- Middle Eastern countries are piloting a digital currency alliance.
▍Conclusion: Survival Rules in the Era of Change
The current global reconstruction presents three significant features:
- Economic power is diffusing from unipolar to multipolar.
- Technological development is shifting from centralized innovation to multi – point breakthroughs.
- Ideology is evolving from Western – centric to pluralistic coexistence.
For China, it needs to grasp two cores:
- Internally: Bridge the development gap through rural revitalization (annual investment of 1.2 trillion yuan) and digital infrastructure (a 5 – year plan of 4.5 trillion yuan).
- Externally: Build a “technology – production capacity – market” three – in – one cooperation network.
In this century – long transformation, maintaining strategic determination and policy flexibility may be the key to crossing the storm. The reorganization of the global supply chain is expected to last for 10 – 15 years, during which there are both risks and historical opportunities to redefine the world order.
