The trade war between the world’s two largest economies is exploding — again.
In his second term as US President, Donald Trump has reignited tensions with China and several other nations after announcing his Liberation Day earlier this month.
Following a back-and-forth between the US and China, Trump responded by slapping a staggering 145% tariff on Chinese imports and prompting immediate retaliation from Beijing.
The April 2 announcement, which Trump dubbed “Liberation Day,” marked the start of what many are calling a full-blown economic standoff.
And China refuses to stay quiet.
Just days after the U.S. hiked its tariffs, Beijing responded with a 125% tariff on American goods and a ban on its airlines completing orders from U.S. aerospace giant Boeing. Not only are existing aircraft orders now frozen, but Chinese airlines have also been told to avoid purchasing any Boeing parts altogether.
According to The Telegraph, the Chinese government is now working directly with airline operators to manage the financial fallout. Boeing, which has been hit hard by the retaliatory move, has yet to issue a public comment.
Trump doesn’t appear to be flinching.
Posting on Truth Social, he said: “NOBODY is getting 'off the hook' for the unfair Trade Balances, and Non Monetary Tariff Barriers, that other Countries have used against us, especially not China which, by far, treats us the worst!
"There was no Tariff 'exception' announced on Friday. These products are subject to the existing 20% Fentanyl Tariffs, and they are just moving to a different Tariff 'bucket.' The Fake News knows this, but refuses to report it.
"We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations. What has been exposed is that we need to make products in the United States, and that we will not be held hostage by other Countries, especially hostile trading Nations like China, which will do everything within its power to disrespect the American People. We also cannot let them continue to abuse us on Trade, like they have for decades, THOSE DAYS ARE OVER!
"The Golden Age of America, which includes the upcoming Tax and Regulation Cuts, a substantial amount of which was just approved by the House and Senate, will mean more and better paying Jobs, making products in our Nation, and treating other Countries, in particular China, the same way they have treated us. The bottom line is that our Country will be bigger, better, and stronger than ever before. We will, MAKE AMERICA GREAT AGAIN!"
Trump was seemingly responding to reports on April 11 that his administration rolled back a portion of its own policy, announcing that certain electronic goods — like smartphones and computers — would be temporarily exempt from the 145% tariff. Commerce Secretary Howard Lutnick later told ABC News that those exemptions may not last and teased the possibility of a new “semiconductor tariff.”
But while Trump tightens the screws, China is playing the long game. President Xi Jinping has embarked on a Southeast Asian charm offensive, touring Vietnam, Malaysia, and Cambodia in a bid to reshape regional alliances and position China as the champion of free trade.
Speaking with Vietnam's Communist Party Secretary-General To Lam, Xi didn’t mince words. According to Chinese state media outlet Xinhua, he called on Vietnam to “jointly oppose unilateral bullying” and to help “uphold the stability of the global free trade system as well as industrial and supply chains", BBC News reports.
Xi didn’t name the US directly — but many believe the target was crystal clear.
Former US trade negotiator Stephen Olson called Xi’s move “a very shrewd tactical move,” saying: “While Trump seems determined to blow up the trade system, Xi is positioning China as the defender of rules-based trade, while painting the US as a reckless rogue nation.”
During his stop in Vietnam, Xi was welcomed by crowds waving Chinese and Vietnamese flags. He laid a wreath at the Ho Chi Minh Mausoleum and met with Prime Minister Pham Minh Chinh and other top officials. Despite the warm optics, analysts say Vietnam is walking a fine line.
“Vietnam will be careful to manage the perception that it is colluding with China against the United States, as the US is too important a partner to put aside,” said Susannah Patton of the Lowy Institute.
The optics only escalated further when Trump responded to Xi’s Vietnam visit from the Oval Office. “That’s a lovely meeting,” he said sarcastically. “Meeting like, trying to figure out, how do we screw the United States of America?”
The messaging war between the two superpowers is heating up fast. As Xi now moves on to Malaysia — where Huawei and ZTE are helping roll out the country’s second 5G network — he’s allegedly pushing a narrative that the US is protectionist and unreliable.
“Now is really a golden opportunity for China to score that narrative win,” Patton added. “This is how Xi's visit to Vietnam, Cambodia and Malaysia will be seen.”
As for Trump, he's showing no signs of backing down.
Whether the world’s caught in a tariff tit-for-tat or witnessing a full-scale economic cold war, one thing is clear: Neither side looks ready to blink.