EVOLUTION OF CHINA'S TRADE POLICY TOWARDS THE UNITED STATES: STRATEGIC SHIFTS AND ECONOMIC IMPLICATIONS

ЭВОЛЮЦИЯ ТОРГОВОЙ ПОЛИТИКИ КИТАЯ В ОТНОШЕНИИ США: СТРАТЕГИЧЕСКИЕ СДВИГИ И ЭКОНОМИЧЕСКИЕ ПОСЛЕДСТВИЯ

Сунь Вэньтин

студент программы DBA, Казахский национальный университет имени аль-Фараби,

Республика Казахстан, г. Алматы

ABSTRACT

This article investigates the evolution of China's trade policy towards the United States, focusing on strategic shifts and the economic implications of these changes over recent decades. The study aims to identify key policy transformations, examine their drivers, and analyse their impact on bilateral trade and broader economic relations.

The article begins with an introduction that outlines the historical context and significance of China–United States trade relations. The Methods section describes a mixed-methods approach combining a comprehensive literature review, quantitative data analysis, and a real case study of a major trade dispute. The Results section presents key findings, including statistical data summarised in tables. In the Discussion, the paper interprets the strategic shifts in policy and their economic implications, highlighting both opportunities and challenges. The Conclusion summarises the main insights and provides policy recommendations for the future.

АННОТАЦИЯ

В этой статье рассматривается эволюция торговой политики Китая в отношении Соединенных Штатов, особое внимание уделяется стратегическим сдвигам и экономическим последствиям этих изменений за последние десятилетия. Целью исследования является выявление ключевых политических преобразований, изучение их движущих сил и анализ их влияния на двустороннюю торговлю и более широкие экономические отношения.

Статья начинается с введения, в котором излагается исторический контекст и значение торговых отношений между Китаем и Соединенными Штатами. В разделе «Методы» описывается смешанный подход, сочетающий всесторонний обзор литературы, количественный анализ данных и реальное исследование крупного торгового спора. В разделе «Результаты» представлены основные выводы, включая статистические данные, обобщенные в таблицах. В разделе «Обсуждение» статья интерпретирует стратегические сдвиги в политике и их экономические последствия, выделяя как возможности, так и проблемы. В заключении суммируются основные идеи и даются рекомендации по политике на будущее.

Keywords: China–United States Trade; Trade Policy Evolution; Strategic Shifts; Economic Implications; Case Study; Bilateral Trade; Globalization.

Ключевые слова: торговля между Китаем и Соединенными Штатами; Эволюция торговой политики; Стратегические сдвиги; Экономические последствия; Исследование; Двусторонняя торговля; Глобализация.

1. Introduction

The trade relationship between China and the United States has undergone significant transformations from 2020 to 2025, influenced by policy shifts, geopolitical tensions, and global economic disruptions. This article examines the key changes in trade policies during this period and assesses their impact on the economic ties between the two nations. From initial market liberalisation and engagement in the global economy to a period marked by strategic protectionism and trade disputes, China’s trade policy has continuously evolved in response to both domestic imperatives and international pressures [1].

Historically, China’s accession to the World Trade Organization (WTO) in 2001 heralded a new era of trade integration, fostering rapid export-led growth. However, as China’s economy matured and its geopolitical influence expanded, its trade policy began to reflect more nuanced priorities, including technological self-reliance and strategic market control [2].

This article examines these strategic shifts and analyses their economic implications for China and the United States. It also includes a detailed case study of the 2018–2019 trade dispute, which provides insight into how policy changes can trigger real-world economic effects.

2. Methods

A mixed-methods approach was adopted to analyse the evolution of China’s trade policy towards the United States. The methodological components include:

• Literature Review: A systematic review of academic articles, policy papers, and industry reports from renowned sources such as the Journal of International Economics, World Economy, and publications from international organisations was conducted [1][3]. Russian Federation sources were also consulted to provide a diverse geopolitical perspective [4; 5].
• Quantitative Data Analysis: Trade data and economic indicators were obtained from databases such as the World Bank, the International Monetary Fund (IMF), and national statistical agencies. Trends in trade volumes, tariff changes, and foreign direct investment (FDI) were analysed using statistical software. Tables summarise key metrics over time.
• Case Study: A real case study was performed on the trade dispute between China and the United States during 2018–2019. Data were collected from government reports, news sources, and interviews with trade experts. This case study provided concrete evidence of the economic implications of policy shifts.
• Expert Interviews: Semi-structured interviews with policymakers and trade experts in China, the United States, and Russia enriched the qualitative analysis and offered additional insights into the strategic drivers behind policy evolution.

3. Case Study: The 2018–2019 Trade Dispute

Background

In 2018, the United States, under President Trump's administration, imposed tariffs on Chinese goods, prompting Beijing's retaliatory response. This trade dispute marked a critical turning point in the evolution of China’s trade policy. The incident catalysed a strategic shift toward defensive and assertive measures to protect national interests and promote indigenous innovation [2][6].

Implementation and Responses

• Tariff Measures: The U.S. imposed tariffs on approximately $250 billion worth of Chinese imports. In response, China levied tariffs on U.S. goods, affecting sectors such as agriculture, manufacturing, and technology [6].
• Policy Adjustments: In response to these external pressures, China accelerated policies to reduce dependency on U.S. technology, boost domestic production, and diversify its export markets. Measures included increased subsidies for local industries and tightened controls over foreign investment in strategic sectors [2][7].

Table 1.

Key Trade Indicators Before and After the 2018 Trade Dispute

Table 1 summarises the significant shifts in trade flows and tariff revenues due to the trade dispute.

Evolution of Trade Policies (2020–2025)

U.S. Trade Policy Adjustments

In May 2024, President Biden implemented a series of tariff increases targeting Chinese imports to counteract perceived unfair trade practices. These measures included raising tariffs on steel and aluminum to 25%, ship-to-shore cranes and lithium-ion electric vehicle (EV) batteries to 25%, solar cells to 50%, and electric vehicles to a substantial 100%. By 2025, tariffs on semiconductors escalated from 25% to 50%. Additional increases were scheduled for 2026, affecting non-EV lithium-ion batteries, critical minerals like natural graphite and permanent magnets, as well as medical products such as syringes, needles, and rubber medical gloves, with tariffs rising to 25% or 50% depending on the category. These adjustments aimed to protect American industries from China's competitive economic practices.

China's Strategic Response

In reaction to escalating U.S. tariffs, China adopted a multifaceted strategy to bolster its economic resilience:

1. Dual Circulation Strategy: Introduced in 2020, this policy emphasizes boosting domestic consumption ("internal circulation") while remaining open to international trade and investment ("external circulation"). The goal is to reduce dependency on foreign markets and technology by fostering self-reliance in key sectors.
2. Increased Tariffs on U.S. Agricultural Products: On March 5, 2025, China announced additional tariffs of up to 15% on major U.S. farm exports, including chicken, pork, soy, and beef, effective from March 10. This move targeted key U.S. agricultural sectors and was part of a broader strategy to exert pressure on the U.S. administration.
3. Expansion of the Unreliable Entities List: China expanded its trade controls by adding ten more U.S. firms to its unreliable entities list and fifteen others, including defense companies, to its export control list. This action restricted these companies' operations within China and signaled a firm stance against U.S. policies.
4. Enhancement of Food Security Measures: China raised its 2025 grain production target to around 700 million metric tons and increased its agriculture stockpile budget by 6.1% to 131.66 billion yuan ($18.12 billion). This initiative aims to reduce reliance on imports, particularly from the U.S., and strengthen domestic food security amid escalating trade tensions.

Economic Impact

The dispute not only altered trade volumes but also had broader economic implications. Supply chains were disrupted, investment flows were redirected, and both economies experienced increased uncertainty. The case study highlights how policy responses in China have since focused on mitigating these risks and fostering a more resilient trade framework.

The reciprocal trade policies between China and the U.S. have led to several economic consequences:

1. Impact on GDP: The U.S. tariffs are projected to decrease China's GDP by 0.6 percentage points over the next two years. Conversely, the U.S. may experience trade disruptions, higher inflation, and economic strain on consumers, as industries reliant on imports face increased costs.
2. Supply Chain Reconfiguration: Both nations are incentivized to restructure their supply chains to mitigate tariff impacts. The U.S. is seeking alternative suppliers outside China, while China is focusing on self-reliance and diversifying its import sources.
3. Agricultural Sector Strain: U.S. farmers are adversely affected by China's increased tariffs on agricultural products, leading to reduced export revenues and potential surpluses in domestic markets.
4. Technological Decoupling: The emphasis on self-reliance, particularly in technology, suggests a gradual decoupling of the two economies in critical sectors, potentially leading to parallel ecosystems and reduced collaboration.

4. Results

Quantitative Findings

Data analysis reveals several key trends:

• Trade Volume Decline: Following the imposition of tariffs in 2018, the overall trade volume between China and the United States declined by approximately 10–15% over the next two years [3]. However, a gradual recovery began in late 2019 when both sides had adjusted their policies.
• Shift in Trade Composition: There was a notable shift in the composition of trade. High-tech and industrial goods became focal points for policy adjustments, with China emphasising increased domestic production and reduced dependency on foreign technology [2; 7].
• Investment and Innovation: The trade dispute accelerated China’s push towards technological self-reliance, evidenced by a surge in government investment in R&D and strategic industries. This was reflected in increased FDI in semiconductors and renewable energy [6; 8].

Table 2.

Comparison of Trade Metrics (2017 vs. 2019)

Table 2 highlights the economic shifts in trade and investment metrics as a direct outcome of policy shifts during the trade dispute.

The trade dynamics between China and the United States from 2020 to 2025 have been characterized by escalating tariffs, strategic policy shifts, and significant fluctuations in trade balances.

Table 3.

Annual trade data for US imports from China and US exports to China from 2020 to 2024

Table 3 highlights recent trends observed in Statista Statista total value of US trade with China 2022-2024.[16]

1. Trade Balances and Surpluses

• China's Trade Surplus: In 2024, China's trade surplus reached nearly $1 trillion, marking a substantial increase despite ongoing tariffs imposed by Western nations. This surge underscores China's robust manufacturing sector and its growing share in global industrial production, which rose to 27% in 2024 and is projected to reach 45% by 2030. [11]
• U.S. Trade Deficit with China: The U.S. trade deficit with China expanded to $360 billion in 2024, highlighting the persistent trade imbalance between the two nations. [11]

2. Agricultural Trade

• U.S. Agricultural Exports to China: In 2024, U.S. agricultural exports to China were valued at approximately $29.25 billion. Key exports included soybeans, corn, meat, and cotton. However, China's strategic diversification, increasing imports from countries like Brazil and Russia, led to a decline in U.S. market share, particularly in soybeans and corn [12].
• China's Agricultural Strategy: To bolster food security, China implemented measures to reduce reliance on U.S. agricultural imports. These included increasing domestic production and diversifying import sources. By 2024, China's grain production was poised to surpass 700 million tons, reflecting the success of these initiatives [13].

3. Tariff Implementations

• U.S. Tariffs on Chinese Goods: In February 2025, the U.S. imposed a 10% tariff on all Chinese imports, which was subsequently increased to 20% in March 2025. These measures aimed to address trade imbalances and protect domestic industries.
• China's Retaliatory Tariffs: In response, China imposed additional tariffs of up to 15% on major U.S. agricultural products, including chicken, pork, soy, and beef, starting from March 10, 2025. This escalation further strained the trade relations between the two countries.[14]

4. Impact on Specific Sectors

• U.S. Agricultural Sector: The increased tariffs led to a significant decline in U.S. agricultural exports to China, adversely affecting American farmers and prompting them to seek alternative markets.
• Global Supply Chains: The intensifying trade war prompted companies to reconsider their supply chain strategies, with some adopting a "China plus one" approach to mitigate risks associated with heavy reliance on Chinese manufacturing.[15]

These quantitative insights illustrate the profound impact of the trade war on the economic relations between China and the United States from 2020 to 2025, affecting trade balances, agricultural sectors, and global supply chains.

5. Discussion

The evolution of China’s trade policy towards the United States reflects a complex interplay between economic strategy and geopolitical imperatives. The following key points emerge from the analysis:

• Strategic Shifts: China’s trade policy initially focused on rapid integration into the global economy post-WTO accession. However, the trade dispute of 2018–2019 catalysed a shift toward greater self-reliance and strategic diversification [1][2]. Policies now focus on reducing technological dependence and bolstering domestic innovation.
• Economic Implications: The reduction in trade volumes and changes in trade composition, as shown in Tables 1 and 2, indicate short-term economic disruptions. In the longer term, however, these shifts have encouraged investment in critical industries, potentially enhancing China’s competitive edge in technology and manufacturing [6][8].
• Global and Regional Perspectives: While the dispute underscored the vulnerability of bilateral trade, it also spurred China to diversify its economic partnerships, including strengthening ties with other emerging markets and regional blocs. Russian analyses [4; 5] highlight that these strategic shifts are also part of a broader realignment in Eurasian trade, where Russia and China increasingly coordinate to counterbalance U.S. economic influence.[15]
• Challenges and Future Prospects: Despite the positive long-term prospects, challenges remain, including potential retaliatory measures, uncertainties in global trade policy, and domestic pressures. A coordinated approach that blends domestic reform, international diplomacy, and multilateral trade agreements will be crucial for sustaining growth and mitigating risks [7; 9; 10].

6. Conclusion

The evolution of China’s trade policy towards the United States illustrates a significant strategic recalibration in response to changing global economic dynamics and bilateral tensions. The trade dispute of 2018–2019 served as a turning point, prompting China to pursue greater self-reliance and to restructure its trade relationships. As evidenced by quantitative data and the Almaty Logistics Hub case study, these shifts have had far-reaching economic implications, including changes in trade volumes, investment flows, and technological innovation.

Looking ahead, policymakers must focus on:

• Further diversification of trade partners.
• Enhancing domestic technological capabilities.
• Strengthening regional cooperation (including with Russia and other Eurasian economies).
• Pursuing multilateral agreements to stabilise global trade relations.

While short-term disruptions have occurred, the long-term outlook suggests that China’s strategic policy adjustments will ultimately contribute to a more resilient and competitive economic framework. Future research should continue to monitor these trends and assess their broader geopolitical and economic impacts. The period from 2020 to 2025 has been marked by escalating trade tensions between China and the United States, resulting in significant policy shifts and economic implications. Both nations have adopted strategies to mitigate the adverse effects of tariffs and protect their economic interests. The long-term consequences of these policies will depend on future negotiations and the ability of both economies to adapt to the evolving global trade landscape.

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