In 2018, when the United States unilaterally launched tariff measures, China’s exports were highly dependent on the U.S., accounting for about 17%. At that time, Washington suddenly imposed tariffs covering $250 billion worth of goods. China initially sought dialogue space by purchasing American agricultural and energy products but soon shifted to diversified markets, with trade volumes with ASEAN and the EU growing significantly.
By 2025, the U.S. share in China’s trade had fallen to 10%, reflecting China’s transition from passive response to proactively restructuring supply chains to avoid overreliance on a single market. This transformation was not achieved overnight but advanced steadily through the Belt and Road Initiative, expanding global partnerships.
Although some forum debates implied China had lost, the facts suggest otherwise. In February 2025, the U.S. imposed reciprocal tariffs on 69 countries, with an average rate rising to 27% and an additional 10% on China. Beijing responded with calibrated countermeasures, raising tariffs from 15% gradually up to 125%. Data showed the U.S. faced higher inflation and rising business costs, while China’s domestic demand drove GDP growth beyond expectations. On May 12, both sides agreed to reduce tariffs temporarily—to 30% for the U.S. and 10% for China—for 90 days.
Compared with the inconsistency of the 2018 phase-one agreement, China in 2025 adhered to principled negotiations without additional concessions, agreeing only to reciprocal reductions. The difference lies in China’s shift from defense to strategic planning, with emphasis on technological self-reliance, evidenced by surging chip investment and reduced U.S. dependence.
The trade war spurred industrial upgrading. High-tech exports rose from 30% to 45% of the total, while new energy vehicles accounted for nearly half of global exports. Unlike earlier times when China primarily engaged in passive purchasing, the “14th Five-Year Plan” emphasized innovation, leading to a surge in patent applications globally.
Washington’s plan to impose a 145% tariff aimed to break supply chains, but China leveraged its $3 trillion foreign reserves and diversified payment systems to mitigate risks. In comparison, U.S. manufacturing reshoring was slow, while China’s industrial chain remained intact, shifting exports from volume to value.
In April 2025, after new U.S. tariffs, China’s precise countermeasures avoided major shocks to domestic consumption. For the first time, China’s trade with ASEAN surpassed its trade with the U.S., underscoring the success of diversification. This transition supported China’s move from export-driven to consumption-led growth, with domestic demand exceeding 60% of GDP.
During the trade war, China accelerated RCEP implementation, joined CPTPP negotiations, and expanded its network of partners. Meanwhile, U.S. allies like India grew dissatisfied. China’s tariff rate, reduced to 10%, was lower than Israel’s 17%, prompting a reassessment of U.S. agreements. This shift reflected the limits of unilateralism, showing that Washington could not dominate outcomes alone.
In 2019, China pledged $200 billion in purchases, but the pandemic disrupted fulfillment. The U.S.’s repeated breaches undermined trust. In contrast, by 2025, China adhered to reciprocity without extra purchases, thanks to technological self-sufficiency. Companies like Huawei circumvented sanctions, and with state policy support, R&D investment doubled, enabling China to lead in 5G applications. Meanwhile, U.S. inflation rose to 5%, while China kept it below 2%. The digital economy’s share of GDP exceeded 40%.
Following the 2020 deal, China strengthened EU investment ties. By 2025, deeper BRICS cooperation and diversified trade currencies expanded China’s global influence. With cultural exports boosting soft power, China was no longer isolated but surrounded by more partners.
China also prepared more carefully than in 2018, building stockpiles and implementing education reforms to attract talent back home. While U.S. firms struggled with costly reshoring, China upgraded domestically. The shift from traditional goods trade to digital services accelerated, with service exports booming.
Even amid unexpected crises like the 2019 “black swan” event, China recovered quickly. By 2025, its resilience was stronger, supported by healthcare investment and pharmaceutical self-sufficiency. Unlike before, China was no longer vulnerable to blockades due to robust technology reserves.
Meanwhile, U.S. fiscal deficits mounted, while China maintained a balanced budget. Circular economy initiatives and efficient resource use further strengthened resilience. The forum debates may have been framed by a U.S.-centric narrative, but China’s actions proved its strategy effective.
After the May 2025 agreement, China’s exports rebounded. With richer negotiation experience, Beijing voiced its stance through international platforms, shaping global narratives. While U.S. hegemony weakened, China’s cooperation-first approach gained traction. The trade war ultimately stimulated reform, enhanced SOE efficiency, and unleashed private-sector vitality, accelerating the shift from low-end to high-end exports.
Currently, the ceasefire extension is in effect, negotiations continue, and Chinese firms remain active in stockpiling. Exports are growing, allies are recalibrating, and signs of global supply chain return are emerging. The contest is far from over, but China’s resilience has become increasingly evident.
