US-China tariff battle fuels questions about Trump's endgame

President Trump's escalating tariff battle with China is rattling the global economy and raising questions about how the standoff will end.  

Trump this week announced a 90-day pause on his sweeping tariffs against dozens of countries, but he bumped up import taxes on China to a staggering 145 percent total. China hit back by upping its own tariffs to 125 percent on Friday, raising the stakes as the hikes roil global markets.  

Trump has insisted that China “wants to make a deal” but doesn’t “know how quite to go about it,” while leaders in Beijing have capped their latest hikes, warning that the battle risks becoming “a joke in the history of the world economy.”   

The tense back-and-forth between global superpowers raises questions about Trump’s endgame and the potential economic impacts of an escalating trade war, as the president contends tariffs will reduce the trade deficit and bring manufacturing jobs back to the U.S.    

“What’s the endgame here? Are we really going to reshore manufacturing based in China? And if we’re hitting every country on earth with additional tariffs, where are we going to see companies flee China to?” said Marc Busch, a professor of international business diplomacy at Georgetown University, who’s also an opinion contributor to The Hill. “They’re not coming back to the United States, so what is the endgame here?”  

Trump announced the latest tariff hike on China on Wednesday, increasing it after slapping the country with 104 percent rate that day. A White House official said Thursday the rate is now 145 percent on China, given an additional 20 percent that includes sectors the reciprocal tariffs do not cover.   

At the same time, Trump implemented a 90-day reprieve from the “Liberation Day” tariffs against all other trading partners, which brought quick relief to the stock market, as he cited “the lack of respect that China has shown to the World’s Markets.”  

“They’ve ripped us off beyond anybody — how people stood for it sitting in my position is not even believable … but they did and all we’re doing is putting it back in shape. We’re resetting the table. And I’m sure that we’ll be able to get along very well,” Trump said Thursday, while emphasizing the respect he has for Chinese President Xi Jinping.  

Republican Sen. Ron Johnson (Wis.) was among the figures on Capitol Hill who expressed uncertainty this week about Trump's strategy, saying Wednesday, "I don't know what the endgame is here yet."

In response to Trump, China’s Ministry of Finance said Thursday the U.S. had “seriously violated international economic and trade rules, disregarded the post-World War II global economic order built by the U.S. itself, and violated basic economic laws and common sense,” per a translated statement.   

Beijing then brought tariffs on U.S. goods up to 125 percent Friday and said it would stop engaging in the tariff hike back-and-forth moving forward. 

“If the U.S. continues to play the tariff numbers game, China will ignore it,” Chinese officials wrote in a release, according to translations. 

Wendong Zhang, an economist with Cornell University and a faculty affiliate at Cornell’s Center for China Economic Research, forecast that the U.S.-China standoff “will likely persist for some time.”  

That’s because there are “many sticking points” in the “deteriorating” relationship between the two global powers, Zhang told The Hill in an email, including China’s industrial policy, Chinese ownership of agricultural land in the U.S. and recent moves from the Chinese military amid tensions over Taiwan.   

Both countries have recently put each other’s companies on blacklists, and the tariff spat has added drama to a potential deal on the mega-popular app TikTok, owned by China-based parent company ByteDance. The administration has also vowed to take back the Panama Canal from “China’s influence,” prompting Beijing to accuse the U.S. of “blackmail.”  

At the same time, the U.S. and China remain major trading partners: The two countries traded an estimated $582.4 billion in 2024, according to data from the U.S. trade representative’s office. The trade deficit with China was at $295.4 billion, up 5.8 percent from the previous year. 

“China recognizes the high retaliatory tariffs would effectively halt the trade, but feel obligated to respond politically,” Zhang said.   

The White House has said the “phones are ringing off the hook” from countries eager to make trade deals with the U.S. to avoid the tariffs, and Trump has claimed that China wants to make a deal but doesn’t know where to start.  

But White House press secretary Karoline Leavitt sidestepped questions Friday about whether Trump is waiting for Xi to make the first move. 

“[Trump] would be gracious if China intends to make a deal with the United States. If China continues to retaliate, it’s not good for China … the president wants to do what's right for the American people. He wants to see fair trade practices around the globe,” Leavitt said. “I’m not going to comment on communications that are happening or may be happening.”  

Leavitt affirmed that Trump is “optimistic” about a deal.

Trump may be wanting to wait until he can have a face-to-face with Xi and announce that they “personally diffused the situation,” Zhang suggested.  

Trump has said he has “a very good personal relationship” with the Chinese president, who visited Trump's Mar-a-Lago resort in Florida during his first term.

Both world leaders likely want to come out of this “looking tough,” said Busch, who previously served as an adviser on technical trade barriers to the U.S. Department of Commerce and the United States trade representative.   

“On the economic side, I don’t think there’s any real calibration of any model here. On the political side, my sense is it’s a bigger question of: what are other countries making of this demonstration effect?” Busch said.   

“You play tough with China and you escalate with China as a means of showing that you're serious about your ability to ratchet up for not negotiating. But on the other hand, since countries understand that the U.S. is going to be tough on China no matter what, how illustrative is this, really?”  

The president may be improvising with some of his moves, but his ultimate goal is likely a phase-two trade deal with China, experts said, continuing on the work of his first term. Trump signed an initial “Phase One” trade deal with China in 2020, with commitments from Beijing to boost purchases of U.S. goods but without promises to drop its tariffs. A second phase of the deal didn’t materialize before Trump left office, as the onset of the COVID-19 pandemic derailed the global economy — and U.S. relations with China. 

And while some think the standoff could be drawn out, a former Commerce Department official opined that Trump and Xi, both aiming to not look weak, could be eyeing a short-term fix to the ongoing trade war. 

“While there’s substantial risk of a global economic meltdown caused by both leaders’ fear of looking weak at home, the odds are greater for a short-term ‘big, beautiful deal’ and medium-term acceleration of deglobalization,” the official said.  

Trump’s decision to backtrack on other tariffs signals that the president’s approach to trade policy could turn on a dime as new impacts emerge.  

In the meantime, the tariffs are creating “a lose-lose” situation for both countries’ economies, Zhang said.  

"At best, it's signaling a willingness to probe the contours of decoupling. At worst, it's just economic suicide," Busch said. “I don't know that either side can really do this much longer ... None of this is good for either side, and I sure hope both sides blink.” 

Alex Gangitano contributed to this report.