Updated May 9, 2025 at 11:33 AM EDT
President Trump has kept tariffs on imports from most countries at 10 percent but has raised tariffs on Chinese goods to 145 percent. Beijing has fired back with duties on American exports set to 125 percent. Meanwhile, the White House has framed any negotiations between the two countries as a matter between Trump and China's President Xi Jinping, but neither leader seems willing to make the first move.
"Once these things get unraveled and you get a sort of tit for tat punitive retaliatory cycle going, they're not only difficult to stop," said Orville Schell. "But they have all sorts of implications that rebound around the world and affect other countries as well."
NPR's A Martínez spoke with Schell, director of the Center on U.S.-China Relations at the Asia Society, a non-partisan, nonprofit educational center.
The following excerpt has been lightly edited for length and clarity.
A Martínez: As the geopolitical order shifts, is this China's moment to seize?
Orville Schell: Well, I think there is an excellent opportunity for China to move into the space being left by Trump, sort of vacating the world. After all, nature abhors a vacuum. However, I'm not so sure that Xi Jinping and China have the skills or the ability. We find ourselves in a place where I think both leaders, Donald Trump and Xi Jinping, are very thin skinned, very sensitive to making any concessions which might appear to be hallmarks of weakness. So this means that we're in a kind of a retaliatory spiral where neither side wants to sort of make the break that might stop the spiral.
Martínez: How ready is China for this kind of trade war?
Schell: I think China is a very export dependent economy. And to keep their growth rate up, they have to manufacture way more than they can use.
Martínez: How damaging could this be to China long term?
Schell: I think it could be quite damaging. It also could be very damaging for the United States because a couple of things are really important here, one are the choke points that each country has on the other, and we are using those in the United States. For instance, one choke point the United States has is its microchips. But China also has choke points, which it is starting to use. Rare earths would be one for magnets, for cars, military hardware. Rare earths, it turns out, are a small element, but absolutely critical one in sort of modern manufacturing.
Martínez: And when you mention rare earth, Ukraine and the United States just wrapped up and signed their deal for rare earth minerals, how much of a blow is that for China, considering that that is one of the big things that China has as an advantage, the majority of the rare earth minerals on the planet.
Martínez: Well, here's the problem about the Ukrainian deal and our mining of rare earths within the United States itself. We do not have the capacity to extract the minerals we need from the ore. Almost all of the rare earth ore that is mined around the world goes to China for processing. So they will still have a lock on a very important part of the production of rare earths.
Martínez: Now, we've just been talking about the two heavyweights in this fight, China and the United States, but how much of a disruption will there be for the rest of the world as the United States and China figure out who's going to win this battle?
Schell: Well, if the United States tariffs of 145% remain, China is going to be even more inclined and under pressure to export elsewhere and possibly at more reduced costs. So let's just look at Europe. They could pretty much wipe out the European auto industry, which is the heart and soul of the German economy.
Martínez: Yeah, essentially we're talking about higher costs for manufacturing, higher costs for everything, the supply chain possibly being disrupted again.
Schell: Yes. I mean, the global supply chains are infinitely complex where products, before they get to the consumer, ricochet back and forth from country to country. And supply chains are dependent on many other places. And we sort of confected this reliance on China at a time where we thought, well, political systems don't matter. And now we discover that political systems do matter, that if Russia attacks the Ukraine and were China to do something in the South China Sea or the Taiwan Straits, suddenly China's form of governance and whether we have good open channels with them to negotiate solutions matters immensely. But everybody's in bed with everybody in a geopolitical world that has got tremendous tension points that remain not only unresolved but becoming more fraught.
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