Trump's Economic War With China Gets Pushback

The United States is now engaged in trade wars with both allies and adversaries, with President Donald Trump citing a range of grievances—from the fentanyl trade to "unfair" duties on American exports.

Trade Tensions Escalate

The administration's latest move to hike a blanket tariff to 20 percent, prompting another round of retaliatory measures from China, comes as Chinese officials reportedly struggle to secure high-level bilateral talks on specific steps to lift the duties.

Chinese Commerce Minister He Yongqian on Thursday reiterated Beijing's call for dialogue, warning that "threats and coercion will only be counterproductive."

The recent Trump tariffs, ostensibly imposed over China's failure to curb shipments of fentanyl precursors—a claim Beijing dismisses as a pretext for protectionism—add to longstanding tensions over unfair trade practices.

These grievances date back to Trump's first term, when he first imposed tariffs—maintained by the Biden administration—on hundreds of billions of dollars worth of Chinese imports.

The latest tariffs also come as China grapples with slowing economic growth, a protracted housing downturn, and weak consumption that fueled deflationary pressures and an export glut. Chinese officials insist the country's economic fundamentals remain strong and have again set a 5 percent GDP growth target.

Newsweek reached out to the U.S. Treasury and White House with emailed requests for comment outside of office hours.

'It Is the Savings Deficit That Drives the Current Account Deficit'

U.S. Treasury Secretary Scott Bessent has called China's economy the most imbalanced "in the history of the world" and suggested it is already in a severe recession.

Speaking at the Economic Club of New York last week, he pledged to respond to other trade practices by other nations that "harm our own economy and people."

The tariffs, he argued, are meant to level the playing field, he said. "Access to cheap goods is not the essence of the American Dream," Bessent said.

David Roche, strategist at Quantum Strategy, sharply criticized this stance.

"[Bessent's] speech blames the U.S. trade deficit on nasty trading partners conspiring against the U.S.," he told Newsweek. "If he was qualified, he should also address other potential causes."

The trade deficit is mainly driven not by unfair foreign trade but by Washington's prioritization of spending over savings, relying on foreign capital instead of domestic investment, Roche said.

Unable to generate enough capital to fund its own production, the U.S. "hoovers up other countries' savings" thanks to the dollar's role as the global reserve currency, he said. This steady influx of foreign money allows the U.S. to sustain a trade deficit—importing more than it exports without fixing its economic imbalances.

He also challenged Trump's tariffs on foreign steel and aluminum, arguing that they won't bring factory jobs back to the U.S.

Manufacturing's decline as a share of U.S. GDP is part of a natural economic evolution—from agriculture to manufacturing to services, Roche observed, pointing out that the number of American manufacturing jobs were halved in the 1970s even as output doubled. "You can't blame Biden and Obama for that," he said.

Trump Ally Defends Tariffs

Trump ally Stephen Schwarzman, CEO of Blackstone, has defended the president's strategy, telling reporters in India on Wednesday that "at the end of the day," the duties would boost U.S. manufacturing. "Given the size of the U.S., that tends to be a good thing for the world," he said, according to the Financial Times.