The trade between China and the USA has changed significantly in recent years, particularly due to ongoing trade disputes. These developments have profound impacts on market participants and investors, who are focusing on tariffs and trade relations.
Background of the Trade Disputes
The trade disputes between the USA and China began under the presidency of Donald Trump and have continued in recent years. A turning point was the increase of tariffs on Chinese imports by the USA to as much as 145%, to which China responded with counter-tariffs of up to 125%. In May 2025, a temporary reduction of tariffs was agreed, with the USA reducing its tariffs to 30% and China to 10%.
Impacts on Trade
Trade between the two countries has significantly reduced. China’s exports to the USA now account for only about 15% of all shipped goods and contribute less than 3% to China’s GDP, which is well below the peak in 2007. This has led Chinese companies to increasingly relocate their production abroad to mitigate the impacts of tariffs and secure their US revenues.
Strategic Disputes
- AI Technology: The USA is concerned about China’s advancements in AI technology, viewing it as a threat to their technological dominance.
- Rare Earths: China controls a large part of the global production of rare earths, which the USA considers a strategic weakness.
- Visa Policy: Visa policy is another point of contention, with the USA accusing China of making it difficult for US citizens to enter.
- Intellectual Property: The USA criticizes China for its lack of respect for intellectual property rights.
Outlook for Investors
For investors, these developments are of great importance as they affect trade relations and economic stability. Chinese stocks, which are less dependent on the USA, may prove resilient against tariffs. The Chinese government has developed plans to mitigate the impacts of tariffs, including increasing consumption as a key pillar of China’s economic stability.
Conclusion
Trade between China and the USA has massively declined due to ongoing disputes. Tariffs and strategic disputes have significant impacts on market participants and investors. While the USA appears to be the winner during the tariff pause, China remains unyielding in strategically important areas such as rare earths.