NextFin news, In October 2025, prominent economists have publicly argued that the United States currently holds a stronger hand in the ongoing trade conflict with China. This development comes amid escalating tariff measures and strategic economic policies implemented by the US government, led by President Donald Trump, who took office in January 2025. The trade war, centered on issues such as tariffs, supply chain security, and technology dominance, has intensified over the past year, with both nations imposing significant trade barriers.
The US administration has recently announced a series of tariffs targeting Chinese imports, including a notable 100% tariff on certain Chinese pharmaceutical products and heavy trucks, aiming to protect domestic industries and incentivize onshore manufacturing. These tariffs are part of a broader strategy to reduce US dependence on Chinese supply chains, particularly in critical sectors like semiconductors and rare earth minerals. Concurrently, China has responded with export restrictions on rare earth minerals and imposed regulatory measures on third-party exporters utilizing Chinese materials, signaling a tit-for-tat escalation.
Economists highlight that the US economy's underlying strength, driven by robust consumer spending, technological innovation—especially in artificial intelligence—and a relatively resilient labor market, provides the US with significant leverage. According to recent data, US GDP growth in the second quarter of 2025 was revised upward to an annualized rate of 3.8%, supported by strong domestic consumption and business investment in technology sectors. This economic resilience contrasts with China's challenges, including slowing export growth and the impact of restrictive trade policies.
Moreover, the US's strategic use of tariffs and port fees targeting Chinese shipping companies aims to disrupt China's dominance in global maritime logistics, potentially redirecting trade flows and increasing costs for Chinese exporters. This move also seeks to bolster the US shipbuilding industry and allied Asian competitors such as Japan and South Korea. The imposition of these fees, effective from mid-October 2025, underscores the US's multifaceted approach to exert economic pressure beyond conventional tariffs.
From a geopolitical perspective, the US's stronger hand is further reinforced by its ability to forge trade agreements and partnerships that isolate China economically. The recent US-EU trade tensions over climate regulations and the US's demands for exemptions highlight Washington's willingness to leverage trade policy aggressively to protect its interests. Additionally, the US government's recent decision to impose a substantial fee on H1B visas reflects a broader strategy to control high-skilled labor flows, which could impact China's access to US-based innovation ecosystems.
However, the trade war's escalation carries risks. The World Trade Organization warns of a delayed but significant deceleration in global goods trade due to tariffs, which could dampen economic growth worldwide in 2026. Financial markets have shown sensitivity to these developments, with equity prices reacting to tariff announcements and geopolitical uncertainties. Furthermore, US households face growing financial stress, particularly in sub-prime auto loans, which could constrain consumer spending and economic momentum.
Looking ahead, the US's strong position in the trade war may enable it to negotiate from a place of strength, potentially extracting concessions from China or reshaping global supply chains to favor US interests. The scheduled high-level meetings between President Trump and Chinese leadership remain critical junctures for de-escalation or further confrontation. The US's strategic focus on technology leadership, supply chain security, and trade enforcement suggests that the trade war will continue to be a defining feature of US-China relations in the near term.
In conclusion, the US's economic fundamentals, combined with targeted trade policies and geopolitical maneuvering, underpin the argument that it holds a stronger hand in the 2025 US-China trade war. While risks remain, this position affords the US significant leverage to influence the trajectory of bilateral trade relations and the broader global economic order.
According to the analysis presented in the MSN report "Economist: 'We have a much better hand to play' in Chinese trade war," these factors collectively contribute to the US's advantageous stance in this complex and evolving trade conflict.
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