Negotiation Deadlock: Neither Side Willing to Budge

Despite high-level talks between U.S. Treasury Secretary and China's trade representatives in Geneva, analysts from Washington think tanks remain pessimistic. The two sides reportedly have minimal common ground on core issues, with little room for compromise. Experts warn this may represent another round of political "delaying tactics" rather than substantive progress in resolving the escalating trade dispute.

Chinese economist Gong Jiong stated bluntly that China might suspend negotiations entirely if the U.S. continues its high-pressure approach. He emphasized that trade discussions can only progress when based on principles of equality and mutual benefit. Interestingly, both nations are even disputing who requested the talks—China's Foreign Ministry claims it was at America's invitation, while President Trump retorted, "They should check the records!"

Trump's Tariff Strategy: Theory vs. Reality

President Trump maintains that heavy tariffs will reduce Chinese exports to America and force concessions. However, former Obama administration trade official Jeff Moon warns, "Trump's tariff strategy will eventually hit the wall of economic reality. The idea that tariffs alone can bring China to its knees simply doesn't work."

The tariffs have already caused significant market turbulence—U.S. stock declines, shaken consumer confidence, and retailers warning of potential product shortages and price hikes if trade relations completely fracture. While Trump hopes Americans will buy domestic products instead, market research shows consumers still prefer cheaper Chinese goods. Manufacturers face particular challenges, as many U.S. industries—from strollers and fireworks to high-tech components—remain deeply reliant on Chinese supply chains. Studies indicate tariffs may actually make American goods less price-competitive globally.

China's Long-Game Strategy: Reducing Dependence and Diversifying

Anticipating prolonged tensions, China has systematically restructured its export economy. Data shows the proportion of Chinese exports to the U.S. dropped from 19% in 2018 to 15% in 2024, demonstrating decreasing reliance on American markets. Chinese analysts note that businesses and citizens developed greater resilience after the first trade war and are psychologically prepared for renewed conflict. Beijing is simultaneously advancing its Belt and Road Initiative and regional economic partnerships to cultivate alternative export markets.

Ironically, America's dependence on Chinese products remains entrenched. Consumer experiments reveal that even when aware of a product's Chinese origin, Americans still prefer it over alternatives—suggesting Trump's manufacturing repatriation policies haven't significantly altered buying behaviors.

Escalation Risks: Global Markets Brace for Impact

While both nations acknowledge their economic interdependence, neither shows willingness to compromise. The EU-China Business Association chairman likened recent negotiations to a "papal conclave," suggesting representatives should be "locked in a room until white smoke emerges." Should talks collapse again, analysts warn of intensified global uncertainty, with potential structural disruptions across manufacturing, consumer goods, and trade networks. Without breakthroughs on fundamental disagreements, trade tensions may persist for years.

Business Survival Strategies

For companies navigating this prolonged trade war, experts recommend:

• Diversify supply chains: Reduce reliance on single markets by identifying alternative suppliers
• Enhance product competitiveness: Invest in R&D to improve quality and value-added features
• Explore emerging markets: Participate in multilateral initiatives to discover new growth opportunities
• Monitor tariff policies: Maintain flexibility to adapt business strategies to regulatory changes

History shows that periods of crisis often create opportunities—businesses that proactively adapt may gain strategic advantages in this evolving landscape.