About a year has passed since President Donald Trump returned to the White House. The second Trump administration, launched on Jan. 20, 2025, has completely reversed the trajectory of U.S. domestic and foreign policy. ChosunBiz has closely analyzed the future envisioned by Trump's second term by running, in sequence, reports on the U.S.-China trade war that unfolded with the new administration, U.S. on-the-ground economic policy, and interviews with experts in the United States and China. [Editor's note]
A year after President Trump's return to the White House, the world is again adjusting to the "era of tariffs." The United States has used tariffs to push for a manufacturing revival and a supply chain reshuffle, while China has pushed back by emphasizing its status as the world's largest production base and an irreplaceable market.
In the thick of U.S.-China competition, we posed the same questions to experts representing each country. Their answers differed, but a shared conclusion was clear. Both agreed that tariffs have become a tool that shakes supply chains, investment, and security, beyond a simple trade instrument.
- Between the United States and China, which side do you think gained more in the negotiations?
Wang Yiwei
"The world is the biggest beneficiary. This is not merely a China-U.S. tariff war. It is a struggle over international trade and the economic and commercial order, and an issue of safeguarding the multilateral trading system centered on the WTO and the principles of free trade. China did not fight the United States solely for its own interests. China is the only country in the world with a complete industrial chain and is independent and autonomous. It does not rely on U.S. operating systems or search engines. The world has seen China's resolve, and the United States has also come to recognize the limits of its own power. From this perspective, one can say China has benefited."
Hufbauer
"From an economic perspective, it is hard to name a clear winner. Tariffs are a tool to pressure the other side, but they also send expenses back into the domestic economy. Some manufacturing institutional sectors may see short-term protective effects, but consumer prices rise and corporations' expenses increase at the same time. In research I was involved in, we emphasized that while tariffs can add some manufacturing jobs, the cost of maintaining each job is very high. Politically, it may look like a success, but in terms of overall economic efficiency, the balance sheet is hard and complex to tally."
- What do you see as obstacles standing in the way of implementing the deal?
Wang Yiwei
"There are indeed obstacles in the process of implementing the agreement. In effect, this agreement postpones problems rather than pressuring China with tariffs as in Trump's first term. The approach of dealing with China through tariffs will no longer work. This year, China's trade surplus exceeded $1 trillion, a historic level. The possibility of replacing the U.S. market has grown even larger. The United States also cannot fully decouple(decoupling) from China."
Hufbauer
"The biggest stumbling block to implementing the agreement is uncertainty—whether policy will be predictable going forward. If the perception remains that tariffs could rise again at any time, corporations will hesitate to make long-term investments. Manufacturing investment is made on a multi-year basis, and if policy direction changes frequently, corporations have no choice but to delay decisions. The manufacturing fields the Trump administration is particularly attentive to are not businesses that can recoup funds quickly, so if policy lacks consistency, waiting and seeing is the rational choice. In fact, many corporations shifted to a wait-and-see stance during the tariff phase."
- How long will the conflict over semiconductor, AI, and software controls last?
Wang Yiwei
"Whether it is advanced semiconductors or software, the United States faces a dilemma. If it does not regulate, China will surpass the United States faster in artificial intelligence; if it does regulate, China will develop its own, posing an even bigger challenge. Because China is the world's largest application market, U.S. advanced semiconductors will still have to be sold to China. Otherwise, how will technology iterate and innovate? The TikTok algorithm issue is the same. Issues that seem fundamentally contradictory can ultimately reach compromises."
Hufbauer
"Technology controls are a far more direct tool than tariffs. Tariffs raise prices, but export controls block quantities outright. However, this approach spurs the development of alternative technologies over the long term. Rather than a total cutoff, narrowing and managing the areas directly connected to security is a way to reduce expenses."
- What will be the biggest variable in U.S.-China relations in 2026?
Wang Yiwei
"In theory, the biggest risk lies with some of America's allies. For example, Japan or Taiwan may try to draw in China-U.S. relations because they do not trust the United States. Overall, neither side wants to expend its energy. Of course, vested interests within the United States could stir trouble, but I think it will be hard to change the big direction of China-U.S. relations. In the end, the leadership of President Trump and President Xi Jinping matters."
Hufbauer
"Economically, it could be the point when the lagged effects of tariffs fully emerge. Tariffs show up less as an immediate shock and more as accumulated expenses over time. On top of that, legal and institutional debates within the United States over tariff authority may intensify. The durability of policy could be tested."
- Do you think pressure through tariffs no longer works on China?
Wang Yiwei
"Yes. China does not rely solely on the U.S. market. It is a country with a complete industrial chain and has already secured alternative markets and routes. The method of pressuring China with tariffs is losing its effect."
Hufbauer
"Tariffs are not a weapon aimed only at the other side. Higher import prices feed directly into domestic consumers and corporations' expenses. The longer tariffs persist, the more that burden spreads across the economy."
- What conditions are needed to ease China-Japan relations?
Wang Yiwei
"It will not be easy to ease China-Japan relations. Japan is accelerating its rightward shift and is trying to break free from the constraints of Article 9 of its Constitution. This will inevitably cause tensions in China-U.S. and China-Japan relations. Such friction will last for quite a long time."
Hufbauer
"The way the United States manages its alliances also matters. The more the United States links security and trade, the more allies will make complex calculations centered on their own interests."
- What role do you think the United States will take between China and Japan?
Wang Yiwei
"For the United States to maintain balance between China and Japan is not truly a balance. In the past, the U.S.-Japan alliance had a restraining character on Japan, but now it is about letting Japan loose while trying not to break the overarching China-U.S. strategic framework. The key factor prompting adjustments in positions along the way is the economy."
Hufbauer
"In such circumstances, the strategies chosen by allies are not wholesale side-picking but sector-by-sector responses. The combination of security with the United States and economic diversification is on the rise."
- How do you view the U.S. role in China-Taiwan relations?
Wang Yiwei
"The United States still seeks to maintain the 'status quo.' Large-scale arms sales are driven by the military-industrial complex, and they do not fundamentally change the balance of power across the strait. In the end, they only embolden the 'Taiwan independence' camp."
Hufbauer
"From an economic perspective, such tensions heighten uncertainty in supply chains and markets. The longer political and security conflicts persist, the more conservatively corporations will calculate expenses."