Eurasia Press & News
Under ‘Trumpism 2.0 Political Economy’ of the re-installed President Donald Trump, United States is experiencing a recurrence of socio-economic cycles in unprecedented stakes. After days of uncertainty, the U.S. has so far focused its tariffssolely on China, as Mexico and Canada secured a temporary exemption from the 25 percent tariffs at the last minute. A new 10% tariff on all Chinese imports took effect on Tuesday, adding to those imposed during Trump’s first term.
However, a lesser-known aspect of Trump’s executive orders may have a more lasting impact on Chinese businesses: the removal of a key customs exemption, which could severely restrict Chinese e-commerce firms operating in the U.S. Amid China’s economic slowdown and manufacturing deflation, its ability to counter these measures is more limited than during Trump’s first term. Consequently, Beijing’s response has been cautious, imposing targeted 15% tariffs on specific U.S. sectors, such as fossil fuels, set to take effect in five days—leaving room for potential negotiations.
In further response, China has also introduced limited export controls on critical minerals and launched an antitrust investigation into Google, though its impact is minimal since Google no longer operates in mainland China. Additional retaliatory measures remain uncertain. While Tesla’s Chinese operations could be a target, Chinese leaders view Elon Musk as a key intermediary with the White House, making such a move unlikely.
Despite Western efforts to develop independent supply chains, China remains dominant in manufacturing and critical mineral processing. However, aggressive trade restrictions could push the U.S. to find alternative suppliers, similar to its response to Chinese chip sanctions. Moreover, Beijing lacks deep insight into U.S. politics, making targeted countermeasures, like those considered by Canada, unlikely.
One potential leverage point for China is the Macao casino industry, where major U.S. firms linked to Trump have significant investments. Blocking these projects would align with Xi Jinping’s crackdown on gambling and send a strong message to US.
Trump has justified his tariffs partly as a response to the fentanyl crisis, though any Chinese concessions may be largely symbolic, much like Canada and Mexico’s responses, which involved rebranding existing security measures. China could similarly claim to tighten fentanyl-related export controls without making substantial changes.
Beyond tariffs, suspending the de minimis rule—which currently exempts Chinese shipments under $800 from customs duties—could significantly disrupt Chinese e-commerce giants like Temu and Shein. If removed, many American consumers would face additional tariffs, reducing demand. Even if tariffs are lifted but the exemption remains suspended, it could overwhelm customs processing, delaying shipments.
Ultimately, Trump’s actions may reinforce Xi’s push for economic self-sufficiency and embolden Republicans advocating for full U.S.-China decoupling.
Meanwhile, although Canada and Mexico have temporarily spared U.S. tariffs, Trump’s propensity to target long-standing allies shows that the concept of “friendshoring”—relocating supply chains from competing states such as China to supported nations—has become effectively outdated.
Friendshoring, which began as a Biden-era program, was somewhat similar to Trump’s first-term trade policies. However, Trump is now prioritizing bringing manufacturing directly back to the United States. If corporations incur higher tariffs for operating in Canada or Mexico than for remaining in China, they have little incentive to relocate production to North America.
The Trump administration is establishing substantial vulnerabilities in US national security, making it simpler for China to exploit them. The Department of Homeland Security has abolished important cybersecurity advisory boards that were previously focused on risks such as the Salt Typhoon breach, owing in part to Trump’s aversion to anti-disinformation measures, which these organizations also addressed.
Meanwhile, the FBI is undergoing a morale crisis and an internal ideological purge, jeopardizing decades of experience. Some agents who worked on Chinese influence activities were shifted to the Jan. 6 inquiry and now face dismissal as the administration restructures the agency. Funding freezes are further weakening U.S. efforts to counter Chinese global influence. Around 60 State Department contractors working on democracy promotion have been fired, and grants for key projects—such as the Stimson Center’s Mekong Infrastructure Tracker, which monitors China’s water control policies—are being halted.
Additionally, inexperienced and unvetted engineers from Musk’s Department of Government Efficiency are being given full access to highly sensitive U.S. Treasury data, raising further security concerns.
Critique of the New Helm
Again, those political and socio-economic cycles reveals its strengths and weaknesses over time. Presidents, though not always fully aware of emerging realities, manage the political system that both governs and is reshaped by these cycles. However, a president does not rule; instead, their power lies in understanding the nation’s spirit and the forces influencing it, from domestic economics to global affairs. These forces, whether technological advances or economic crises – are beyond the president’s control, yet they define their leadership.
Former President Ronald Reagan played a crucial role in shaping the financialfoundation of the current cycle by fostering an investment-driven climate and dismantling the previous economic structure. Similarly, Pres. Franklin Roosevelt, during the Great Depression, challenged long-standing economic beliefs and introduced radical changes, paving the way for a new economic order that ultimately shaped both the U.S. and the world. His actions, though controversial, addressed the urgent need for transformation.
President Donald Trump, intentionally or not, followed Roosevelt’s model by seeking to overturn what he viewed as an outdated ideological framework. While his approach appeared unpredictable, it reflected an effort to redefine national policies and values. Much like past presidents who oversaw major transitions, Trump’s leadership signaled the end of an old order and the beginning of an evolving economic and social structure.
The next economic cycle, as history suggests, will be driven by groundbreaking technologies and probable disruptions. Innovations in medicine and artificial intelligence will likely play a key role in addressing demographic challenges, such as an aging population and a shrinking workforce. While the exact solutions remain uncertain, the U.S. has historically reinvented itself through necessity. Presidents do not dictate these changes but help clear the path for new developments, continuing the nation’s cycle of transformation coupled with cleared policy and legal mandate and directions.
