US Isn't Winning Trade War Despite Drop In Its Imports From China

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The report said China had recycled about $1.3 trillion of its trade surpluses into loans across the Global South, a move that will create new national‐security and economic challenges for the US and its allies. It noted that Europe, Japan, South Korea and others jointly hold roughly $7 trillion in net foreign assets, while international financial institutions, including the multilateral development banks, possess combined assets of $1.5 trillion – but their collective capacity has“not been strategically aligned.”

It pledged reforms to multilateral development institutions to ensure they“serve American interests” and operate with greater discipline.

The report also urged allies, including Europe, Japan, Korea, Australia, Canada and Mexico, to adopt policies that help shift China's growth toward household consumption, arguing that“Southeast Asia, Latin America and the Middle East cannot absorb China's excess capacity.”

Chinese netizens detect a softer tone

While the latest US National Security Strategy sharply criticized the United States' 30-year engagement with China, some Chinese commentators said the document actually reflects a softer tone toward China.

“Although the report still devotes substantial space to Taiwan, the South China Sea and other China‐related issues, its wording is noticeably milder than earlier editions,” Guoping, a Zhejiang‐based military columnist, writes in his article.“Washington now labels China less as its biggest challenge and more as an economic competitor.”

However, he added,“the softer wording does not mean the US has become kinder toward China. It is because China's strength has grown. After years of trade, technology, financial and public‐opinion battles, the US has failed to achieve the outcomes it expected. These signals show Washington is running out of cards to contain China's rise.”

He says the US is no longer pursuing global hegemony or acting as the world's policeman, but is concentrating its strategic focus on the Western Hemisphere and reinforcing leadership mainly in North America.

US pivot – but to the south

Chinese state media highlighted the National Security Strategy's renewed emphasis on enforcing the so‐called Monroe Doctrine as part of Washington's effort to reassert American preeminence in the Western Hemisphere.

The doctrine, first articulated by President James Monroe in 1823, declared that the US would reject interference by faraway powers and assert its leadership across the hemisphere.

“America has changed its wording and shifted the key arena of competition, but has not given up its strategic‐competition thinking,” Li Haidong, a professor at China Foreign Affairs University, told the Global Times.

“In areas such as technology and supply chains, Washington seeks to eliminate factors from outside the region that threaten US interests, a signal that its strategic competition with China remains unchanged. The only difference is that the US will put more focus on the Western Hemisphere,” Li said.

The numbers

Regardless of what may be achieved by any such policy pivot, much of the history of the US-China trade war and the Trump tariffs will be told in numbers. And the numbers so far are daunting from the American standpoint.

Facing an average 55% US tariff, many Chinese and foreign manufacturers shifted part or all of their production lines to ASEAN economies, including Vietnam, Thailand, and Indonesia, to benefit from a more manageable 20% tariff.

While Chinese manufacturers bore relocation costs and workers lost jobs as production shifted overseas, the negative impact of this development on the broader Chinese economy remained limited.

By making products in Southeast Asia for the US markets and increasing higher‐value exports to Europe, China successfully boosted its total exports by 5.4% to US$3.41 trillion in the first 11 months of this year from a year earlier. It also recorded a 21.6% rise in its trade surplus to US$1.08 trillion over the same period, according to China Customs.