By Jason Douglas, Konrad Putzier, Ruth Simon and Raffaele Huang
The gloves are off. The next chapter of U.S.-China decoupling has begun. The pain will be felt everywhere.
In jacking up his tariffs on China—and pausing steep duties on dozens of other nations—President Trump is pushing the world’s two biggest economic powers into a battle that will leave neither unscathed and risks tanking the global economy.
The total tariffs imposed on China in Trump’s second term now add up to 145%, the White House said Thursday. They could eventually be walked back, but already, there are signs that a portion of the $582 billion in goods trading between the two countries is grinding to a halt. U.S. factories are canceling orders and some Chinese manufacturers are putting workers on temporary leave. Data has shown a sharp decline in trans-Pacific ship bookings since some of the latest tariff escalations began. U.S. stocks fell sharply Thursday as investors digested the developments.
Arlen Nercessian, a Temecula, Calif.-based kitchen-equipment importer, messaged his Chinese agent on Wednesday to hold his latest shipment of cast-aluminum plates when he heard that Trump was pushing up tariffs—but it was too late. He said that without a deal to end hostilities between Trump and Chinese leader Xi Jinping, that order from China will be his last.
“There’s no way I’ll get any of these in the U.S.,” he said. He might have to cut most of the company’s nine employees and contractors, switch to cheaper software and stop traveling to food shows to advertise his products “just to hunker down and survive,” he said.
While Trump says any pain in the U.S. from tariffs will be offset by long-term gains in jobs and investment, in the near term, investment bank JPMorgan said Wednesday it is “more likely than not” that the U.S. economy will shrink later this year.
In the 23 years since China joined the World Trade Organization, access to its cheap manufactured products has become embedded in the consumer-focused U.S. economy. China accounted for around 13% of all U.S. goods imports in 2024. It is a source of a wide variety of goods, including smartphones, toys and industrial parts. Entire businesses have been built around assumptions of that access, with design, marketing and distribution in the U.S. coupled with production in China.
Many businesses had begun to adjust to a reality of higher tariffs that started during the first Trump administration. But if the new tariffs remain, they face a loss of access to Chinese production altogether—with profound changes for American consumers. Americans, already stressed from a 24% rise in prices over the past five years, could end up paying even more for a smaller selection of everyday goods.
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