How Has the Imposition of US Tariffs Contributed to the Economic Tensions Between the United States and China, Challenging Global Hegemony?

Abstract

Various sectors (mainly in agriculture and manufacturing) were significantly impacted by the imposition of tariffs, as farmers faced high costs and lost exports in 2018. The new 2025 tariffs added another layer of complexity by reintroducing economic disputes amid a growing global market. This research question will help us understand how this has impacted global supply chains and international relations. Further exploring the economic tensions between the two nations. Investigating both short-term and long-term disruptions will shed more light on the drive and motivation, allowing us to gain a deeper understanding of how power influences the pursuit of peace.

Introduction

The imposition of US tariffs on China has significantly contributed to tensions between the two superpower nations. Understanding these challenges allows politicians and trade representatives to overcome future deficits and maintain a global political balance, thereby promoting a more economically sustainable future. This deeper understanding of the role of power in determining peace is crucial. This policy brief aims to focus on unfolding the economic and geopolitical disruption caused by US tariffs and highlight their impact across various sectors, shedding light on what's to come for this contemporary superpower rivalry.

Key Words

• Tariffs

  ○ “Tariffs are taxes charged on goods bought from other countries. Typically, they are a percentage of a product's value” (BBC, Jun 4, 2025)

• Hegemony

  ○ “Leadership or dominance, especially by one state or social group over others” (Oxford Dictionary)

• Superpower nation

  ○ “A superpower is a state that cannot be ignored on the world stage and without whose cooperation no world problem can be solved. (M.André. Britannica, 25 Feb. 2025)

• Trade

  ○ “The action of buying and selling goods and services.” (Oxford Dictionary)

• Economy

  ○ “The state of a country or region in terms of the production and consumption of goods and services and the supply of money.” (Oxford Dictionary)

• Supply Chains

  ○ The sequence of processes involved in the production and distribution of a commodity. (Oxford Dictionary)

• Market

  ○ “A means by which the exchange of goods and services takes place as a result of buyers and sellers being in contact with one another, either directly or through mediating agents or institutions.” (Robinson, J.V, Britannica, 2 Apr. 2025)

The United States’ 2018 imposition of tariffs on China has increased economic tensions between these nations. The new 2025 tariffs create an added layer of complexity and reintroduce unhealthy trade practices. Author Zongyuan Zoe Liu (a Senior Fellow for China Studies) says escalations between the 2 haven't subsided since the first trade war in 2018. Trump claimed this would decrease the US trade deficit of $1.2 trillion and force China to reform their unfair trade practices (CFR, Editors, 2025). According to the Council on Foreign Relations, in 2020, Trump negotiated a phase one agreement. Built upon “reforming the Chinese trade practices”. However, this was criticized and ultimately failed due to Beijing's lack of commitment to buy an additional $200 billion worth of its goods.

This fuse was lit initially by China's alleged unfair trade practices (allegations of IP theft). After Trump's tariffs, China retaliated, and by 2019, the US imposed tariffs on $360 billion worth of Chinese goods (Klatte, 2025). However, effective May 14th, 2025, both nations reached an agreement for a 90-day pause (The White House, USA, 2025). Both countries agreed to reduce tariffs while retaining a baseline 10% tariff. (Sky News, 1:00-28:53)(The White House, USA, 2025). The back-and-forth trade wars outline the instability of trade practices between the two nations.

Moreover, the United States' imposition of tariffs goes against the WTO charters."We have tried to work within the system, but talking seems detached from reality," said Mr. Greer at the U.S. trade conference. Tariffs have been shown to fail largely because they divert essential goods. This led to significant impacts on the agricultural and manufacturing sectors, with many experiencing job losses. The IMF estimates that economic growth (from such actions) has declined by 0.8% in 2019. This concern clearly widened economic margins and resulted in uncertainty of the global market, disruption of international supply chains. The US is clinging to a hopeless cause, seeking power by balancing the economy.

Tariffs are only widening the disparities. These increased geopolitical tensions highlight the need for innovative solutions to combat complex ideological challenges. The new joint statement has the potential to reform such tension and hopefully contribute to continued dialogue between the two countries.

This instability leaves the world in a state of unknowingness; every challenge pushes the boundaries of human capabilities. Such imbalances highlight that these US tariffs aren't simply just about reducing the trade deficit, but also about maintaining their position as a global hegemon. The US has always built itself as a global superpower and painted the image of the so-called “American Dream”. With the US accounting for only 5% of the global population, it currently possesses approximately 25% of global wealth, 35% of world innovation, and 40% of global military spending (Tufts Now). The theme of the ‘American Dream’ remains true far beyond empirical evidence. In fact, around 53% of Americans believe that the dream is still possible. (Pew Research Center)

The world has been constantly led by a US-centric global order. The UN, WTO, and IL, to name a few. However, as China and other nations have come up on the rise, the ideological differences between the 2 prove to be shifting global hegemony, ultimately challenging world peace. It is evident that the US remains in pursuit of maintaining dominance worldwide; however, economic and geopolitical conditions outline otherwise. With a shortening gap of power between the 2, consideration of the rise of a multipolar world order is essential. Often characterized by the spread of power among multiple countries rather than a single dominant power (like the US), it is emerging. While it does challenge the existing liberal international order, it prompts an urgent re-evaluation of global power dynamics.

To support my argument, kindly refer to the graph. This graph clearly displays the GDP annual growth of the United States and China. However, what exactly does it show?

Firstly, the annual growth in recent years (the past 20 years) has been continuously higher than that of the United States. It has experienced instability and decline in the past few decades. Putting our focus on more recent years, the US and China have both been closer than ever in the past few years in terms of economic growth (measured by GDP). Does it mark the beginning of a power shift in global economic leadership, or is it merely a temporary alignment in the longer contest for dominance?

The narrowing gap greatly intensifies the US insecurities and may act as a motivator for the use of tariffs as a defensive measure to

Figure 2: GDP growth (annual% %) - China, United States

regain the high ground. The “Hegemonic Stability Theory (HST)” in international relations argues that global stability is more likely when one dominant power maintains order, sets the rules of trade, and provides public goods like security and economic leadership. In this case, unfortunately, it has been shown that tension often emerges with such nations in the pursuit of power. Why? Simply, due to the fact that rising powers may want to reshape the system in their favour, while the dominant power tries to maintain the existing order.

This theory excellently explains the current geopolitical and economic dilemma. As China's autocratic ideologies allow it to catch up to the US, they threaten its leadership. As a result, the U.S. has felt pressured to use tools (such as tariffs) unethically to fight for its economic sovereignty and contain China's worldwide influence. However, rather than preserving its dominance, the US has dug a deeper hole of uncertainty, driven by economic power shifts that are deeply contributing to the current trade tensions. This has shown us that this competition is not just financial. It is a conscious, deep geopolitical concern, tied back to the core idea of cold peace. Where no winner is present, it remains a constant loophole. Unlike a Cold War, the US and China are competing for dominance. They avoid military force, whilst enforcing geopolitical competition, rather than total dominance. Focusing more on economic, military and political stability. Author Michael Doyle, in his book (Cold Peace: Avoiding the New Cold War), suggested cold peace as a way of reducing disruptive activities, such as industrial espionage. While this still involves a lack of bilateral cooperation, it remains a crucial step in forming a more peaceful diplomatic worldwide setting.

In conclusion, the imposition of tariffs on China has played a significant role in global markets and led to deep tensions between the 2. Such concepts show us the gravity of international disputes and how many superpower nations are hungry for power. Understanding, investigating and evaluating such complex challenges allows countries to use best practices, diplomatic dialogue, and refrain from breaching WTO charters and laws for their countries. Politicians can successfully acknowledge prior failed actions and create new solutions, encourage open/ fair economies and reform trade practices for the better. The US tariffs may be a never-ending issue. It isn't about what has happened in my past, but what the future holds. Economic sustainability between the 2 is in their hands. Fix it? Or destroy it?

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