Trump’s tariff tactics undermine trade strategy

[WORLD] The partial suspension of US-China tariffs following last month’s Geneva talks is being framed as diplomatic progress. But beneath the surface, the deal exposes how unstable the underlying strategy remains. The Trump administration has paused select tariffs—most notably a 24% duty—for 90 days. Yet others, like the 10% baseline tariff and a 20% fentanyl-related duty, remain intact. Beijing is pushing for full elimination, while Trump continues to treat trade as transactional leverage for political and economic wins. This episodic, deal-by-deal approach may deliver headline victories, but it risks locking the US into an unpredictable and ultimately self-defeating pattern. What looks like negotiation strength could become strategic incoherence.

Context: A Deal Without a Doctrine

Over the past six years, US-China trade relations have become defined not by doctrine, but by dealmaking. Tariffs under the Trump administration were originally imposed to punish Chinese trade practices, from intellectual property theft to forced technology transfers. These measures escalated into a broader economic confrontation, hitting over $360 billion in goods. Last month’s Geneva talks led to a 90-day suspension of a 24% tariff, a move seen by some analysts as a step toward normalization. But the US kept a 10% tariff in place on most categories and refused to roll back a separate 20% penalty targeting China’s alleged role in the fentanyl epidemic. “This is not de-escalation, it’s just a pause,” said Wendy Cutler, former deputy US trade representative, in a recent Financial Times interview.

Trump’s negotiating style—demanding market access in exchange for tariff relief—has been applied across multiple bilateral relationships. Japan was pressed to co-invest in Alaskan infrastructure. Vietnam was threatened with reimposed duties unless it eased tariffs on US exports. In each case, tariffs became bargaining chips for unrelated economic goals. While it generates political capital domestically, this method reduces trade policy to a series of one-off wins instead of a cohesive long-term strategy.

Strategic Comparison: Dealmaking Versus Discipline

Compare Trump’s ad hoc approach to that of the European Union. Brussels favors institutional mechanisms, such as the WTO dispute resolution system, and engages China through structured dialogues on digital trade, competition policy, and investment. While slower and less headline-grabbing, the EU’s method has led to more stable bilateral frameworks, including the EU-China Comprehensive Agreement on Investment (CAI), which—although stalled—offered a vision of reciprocal market access rooted in rules.

China, meanwhile, has exploited US unpredictability to reposition itself as a global trade stabilizer. Through the Regional Comprehensive Economic Partnership (RCEP) and Belt and Road Initiative, Beijing has expanded its influence, particularly in Asia and Africa. Trump’s deal-centric model gives China room to present itself as the more reliable trade partner—a narrative that appeals to countries wary of US volatility.

Moreover, history offers a cautionary parallel. The 1980s US-Japan trade wars, often cited as precedent, were also driven by demands for market access and fairness. While they delivered immediate gains for US industries, they also strained alliances and pushed Japan toward greater economic self-sufficiency. China, with far more geopolitical clout than Japan ever had, is even more likely to respond to coercive tariffs by doubling down on domestic development and trade diversification.

Implication: Tactical Wins, Strategic Drift

In the short term, Trump’s transactional approach will likely produce more suspended tariffs in exchange for Chinese concessions on agriculture, semiconductors, or currency stability. But in the absence of a long-term strategy—one that integrates labor, security, and innovation policy—the US risks ceding its ability to shape the global trade architecture. Investors may welcome tariff suspensions as signs of de-escalation, but they should recognize that these pauses are politically timed rather than structurally anchored.

Business leaders operating across US-China supply chains face continued unpredictability. With tariff levels fluctuating based on presidential leverage, planning cycles shrink and capital expenditures stall. “Every quarter feels like a new trade policy,” remarked one executive at a US-based logistics firm during a Bloomberg forum. Without a clear framework, firms hedge their bets—geographically and financially—reducing long-term US competitiveness.

From a regulatory perspective, this instability also complicates enforcement. The US Trade Representative’s office struggles to maintain consistent criteria for imposing or lifting tariffs, weakening its credibility at the WTO and among allies. China's call for full elimination of punitive tariffs is unlikely to succeed—but its framing of the US as erratic resonates more than Washington realizes.

Our Viewpoint

Trump’s trade playbook is optimized for campaign optics, not for economic stability. By treating tariffs as levers for one-time deals rather than tools within a coherent framework, the US invites both ally distrust and rival opportunism. The Geneva reprieve is a diplomatic Band-Aid—useful for headlines, useless for healing. To reclaim strategic ground, Washington needs more than leverage. It needs a plan. One that defines clear goals, aligns trade with broader economic objectives, and reestablishes America as a credible, long-term partner in the global order.