US President Donald Trump’s tariff assault on the world has not just shaken Wall Street and the rest of the nation. It also risks setting back the aspirations of global populations for economic recovery and improved living standards. The world continues to experience turbulence as geopolitical tensions intensify and the risk of war increases. Can such a global environment truly “Make America Great Again”?
If Maga is indeed Trump’s primary goal for his second term, he has much better options than trade wars: in particular, he can reconcile with China.
Firstly, trade wars result in mutual losses. The US trade war cannot break China, but it imposes tremendous costs on American citizens and businesses. Although the 2018 trade war led to a significant decline in Chinese exports to the United States, China’s trade with other nations continued to grow, and its global manufacturing share increased. By 2023, China had surpassed Germany and Japan to become the world’s largest automobile exporter.
Could disengaging with the world’s leading industrial powerhouse truly make America great again?
Secondly, decoupling from the goods trade with China would shake the foundation of America’s global dominance: the status of the US dollar. Few countries are capable of challenging the dollar’s dominance and China has not gone down this path because the US remains its largest customer. But should a trade decoupling occur between the countries, China’s established payment systems and the digital yuan could immediately become globally significant.
Would losing the world’s largest trading partner benefit America’s global standing?
