The Mirage of Victory: Inside the U.S.–China Trade War Reality

In our May article “Playing Hardball in Trump’s Trade War”, we discussed that China’s tough stance in the U.S.-China trade war was not due to Beijing having a strategic advantage or the resilience of China’s domestic economy, but rather an inevitable choice rooted in Beijing’s own political and economic logic. The article also pointed out that, although the trade war could have a greater impact on China’s economy and ordinary Chinese citizens, political pressure in the U.S. might emerge earlier, thereby influencing policy decisions more quickly and extensively. At the same time, the chance of China and the U.S. reaching a sustainable, substantive trade agreement is slim. This is because the underlying issues behind the U.S.-China trade contest are deeply intertwined with Beijing’s long-standing governance model and legitimacy foundation, and making changes in these areas is almost unacceptable for Beijing. Six months later, the U.S.-China trade war continues, and a popular question is whether Beijing has already won or is winning this trade war.

In this article, we will examine the mainstream perspectives on analyzing the trade war and attempt to provide an alternative interpretation. Through this interpretation, we argue that the risks and problems faced by China and the U.S. are not the same, and that the situation is not one of win-lose, but rather lose-lose. We believe both sides must first address their own issues in order to break the lose-lose situation.

America is losing vs China is winning

A currently popular view holds that the United States is losing this trade war, while China is winning. The “America is losing” perspective focuses on the economic pressures, political vulnerabilities, and declining leverage of the U.S. in global trade. It emphasizes the impact of tariffs and retaliatory measures on American industries and consumers—for example, US tariffs on Chinese imports have increased costs for American businesses, particularly manufacturers dependent on intermediate goods, which in turn raises consumer prices and dampens domestic consumption. The agricultural sector is portrayed as the hardest hit, with American farmers losing access to key export markets due to China’s retaliatory tariffs, resulting in crop surpluses and financial distress. This perspective also highlights broader supply chain disruptions: businesses face uncertainty about sourcing materials, undermining production efficiency and global competitiveness. Politically, it points to domestic dissatisfaction, with affected industries and regions pressuring legislators, fueling partisan tensions, and intensifying public criticism of trade policy. Strategically, it argues that as allies and global partners reorient their trade flows in response to tariffs, the US’s negotiating leverage is weakened, reducing its ability to shape global economic rules. Overall, this view portrays the US as enduring economic pain, structural disruption, and reputational costs in the trade war while struggling to achieve its objectives.