Last week, President Trump announced a strategic pause on his “reciprocal tariffs” affecting nearly 100 countries, while simultaneously ramping up tariffs on Chinese imports to a staggering 125 percent. This move is a direct response to China’s tit-for-tat retaliation that has persisted since February. Drawing from the lessons of the previous trade war during his first term, the Trump administration has a unique opportunity to secure a decisive and lasting victory in his current trade war with China.

Nearly seven years ago, Trump ignited the trade war by imposing a 25 percent tariff on $34 billion in Chinese goods in July 2018. China immediately hit back by imposing a 25 percent tariff on an equal value in U.S. goods, setting off a continuous cycle of retaliatory measures between the two powers.

The stark reality was that China exported significantly more goods to the United States than it imported (the U.S. trade deficit with China stood at $420 billion as of 2018). Eventually, China ran out of U.S. imports to target with tariffs. By the end of 2018, the two countries began negotiating a truce and reached a trade deal almost a year later.

The 2019 trade deal adopted a misguided phased approach that ultimately fell short of its goals. Phase One addressed easier issues, such as China agreeing to purchase an additional $200 billion in U.S. agricultural products over the next two years. However, the more challenging issues — such as technology transfer and cybersecurity — were reserved for a hypothetical Phase Two negotiation. Unfortunately, the eruption of the Covid pandemic in 2020 and the change in U.S. leadership conveniently allowed China to sidestep its Phase One obligations, and the supposed Phase Two negotiation never took place.