Supply Chains Under Fire and the US Attempt to Reshape the World Economy

Analytical Review
The tension in trade relations between the US and China has reached a new level. The Trump administration, continuing the course of "economic patriotism," is tightening tariff policy, while China demonstrates a willingness to dialogue, but on its own terms. In parallel, the European Union is trying to find a balance between protecting its interests and maintaining relations with both economic giants.
The latest statements from the White House leave no doubt about the Trump administration's intention to continue its hard line towards China. Threats to raise tariffs even higher on Chinese imports are not just a negotiating tactic, but part of a large-scale plan to restructure global supply chains. The White House has threatened China with a 245% tariff on US imports, and now China and the US have imposed mirror tariffs of 125%. As Beijing has said, this has turned into a "numbers game" and has no practical economic significance. Former President Biden has publicly stated for the first time since Trump's inauguration that "Trump has caused so much damage and destruction in 100 days in office that it takes your breath away."
Of particular note is the attempt to initiate the creation of an international coalition to isolate China economically. According to The Wall Street Journal, the United States is negotiating with more than 70 countries, inviting them to join restrictive measures. However, experts question the realism of such a scenario, given China's deep integration into the global economy.
The Chinese authorities have clearly outlined their position and declared their readiness for negotiations, but only on the condition of mutual respect and Washington's rejection of ultimatum rhetoric. The statement by the official representative of the Chinese Foreign Ministry emphasizes Beijing's commitment to the principles of the multilateral trading system.
It is noteworthy that, amid trade disputes, the Chinese economy is demonstrating resilience. Bloomberg experts believe that the tariff policy of the Donald Trump administration, designed to return production to the United States, will not bear fruit. The Trump administration has exempted smartphones, computers, and other electronic devices from steep tariffs on Chinese imports, including a 125 percent levy imposed as part of the trade war with Beijing. The move comes after concerns from American tech companies that prices for gadgets could skyrocket because many of them are made in China.
However, Apple, for example, may move production from China to India but is unlikely to return to the United States. The move of some Apple production to India, reported by Bloomberg, is more evidence of the flexibility of Chinese partners than of the weakness of the Chinese economy. China called the US exemption from tariffs on smartphones and computers "a tiny step toward correcting its mistakes."
The European Union, caught between two fires, is playing a complex diplomatic game. On the one hand, Brussels is preparing for retaliatory measures to the American tariffs. On the other hand, as reported by the German publication Bild, a program of economic concessions to the United States is being developed, including an increase in purchases of American gas and weapons. At the same time, the EU is stepping up cooperation with Central Asia, allocating 12 billion euros for the development of transport and energy infrastructure in the region. This step can be seen as part of a long-term strategy to diversify economic ties.
Experts highlight several possible scenarios for the development of the situation. One of them is that the parties will be able to find a temporary solution that will reduce the severity of the confrontation but will not eliminate its underlying causes. Some predict a tightening of measures by the United States, which will force China and the EU to take more decisive retaliatory actions. But everyone agrees that a regrouping of economic ties will inevitably occur, which may lead to the creation of new trade blocs.
The current situation resembles a complex game of chess, where each move requires careful calculation. One thing is clear: in the context of global economic interdependence, unilateral decisions rarely lead to the desired results.
Elbrus Mamedov

SR-CENTER.INFO