Trump’s trade war with China is about one thing

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China told the US last week that it wouldn’t enter trade talks until Washington cancelled all “unilateral tariff measures”. The US has sent contradictory messages about whether the two countries are already negotiating. Truth, it seems, is the first casualty of trade wars.

So what? The US is losing the tech war with China. That’s the truth that matters, with implications so profound they could remake the world. America’s longstanding position as the world’s technology leader is under threat. Evidence of China’s growing prowess includes

• technology breakthroughs: these have become a regular occurrence, from the AI tool DeepSeek to EV batteries that charge in five minutes;
• cutting-edge research: China is ahead of the US in 57 of 64 advanced technologies, when 20 years ago it led in just three; and
• innovation: far from being merely a copycat, China is becoming a lodestar in key industries.

The most stunning vision of the future to emerge recently came from Unido, a UN agency not normally known for anything close to sensationalism.

Uni-woah. Late last year, it published a report that predicted that China would account for 45 per cent of the world’s industrial production by 2030. This would be more than four times that of the US, which is projected to be at 11 per cent, and more than the world’s high income countries combined.

Left in the dust. If this future does unfold, it will be unprecedented.

• The US share of global manufacturing reached a peak of about 35 per cent in 1975.
• The UK, even when it was flush with the dynamism of the industrial revolution in the late 1800s, was significantly short of 45 per cent.

The vision of the future set out in the blandest of terms in the Unido report is a thorough-going nightmare for those who embrace Pax Americana. China’s techno-authoritarian state, marshalled by the forces of mass-mobilisation and rights repression, has shown you don’t have to be a liberal democracy to be effective.

Can the west accept this? Donald Trump doesn’t want to. Washington’s trade war is an attempt to stymie not just China’s technological progress but its emergence as a global superpower. Therein lies the fault in the US design, and one of the reasons why the White House looks so chaotic. As the saying goes: he who chases two rabbits catches neither.

War on multiple fronts. Washington has ramped up tariffs of up to 145 per cent on Chinese imports into the US (with several exemptions). It has also added names to an “entity list” of several hundred Chinese companies that Washington restricts from receiving key US tech inputs. According to reports, the Trump administration plans to use tariff negotiations with third countries to try to force a global decoupling from Beijing.

Reality tech. Washington’s press on Beijing can certainly hurt China. But it is unlikely to reverse its manufacturing ascendancy. China’s economic presence – especially in regions such as Southeast Asia, Latin America and Africa – is so deep it cannot be uprooted.

Is the US going to back down? Yes and no. There are signs that both the US and China wish to backtrack from their current unsustainable positions. Trump’s assertion, denied by Beijing, that he had “called” Xi Jinping is consistent with a sense that the US president is seeking ways to de-escalate. Similarly, Trump’s claim that he had sealed “200 deals” on trade – even though none have been announced – reveals a willingness to negotiate.

What’s more… The main cause of the trade war isn’t going away. China’s tech emergence is set to continue or even accelerate. The next decade will largely be concerned with how the west, and especially the US, deals with this uncomfortable truth.

Graphic by Bex Sander. Photo credit: Credit AFP/Getty