U.S. Trade War With China Escalates

Summary

The NPR Politics Podcast
Episode: U.S. Trade War With China Escalates
Release Date: April 9, 2025
Host: Asma Khalid and Tamara Keith

---

Introduction

In this episode of The NPR Politics Podcast, hosts Asma Khalid and Tamara Keith delve into the intensifying trade war between the United States and China. Joined by NPR's China correspondent, John Ruich, the discussion centers around the recent escalation of tariffs, the ramifications for both economies, and the potential pathways to de-escalation.

---

Escalation of Tariffs

The hosts begin by outlining the latest developments in the trade dispute:

• Tariff Increase: President Trump has elevated tariffs on Chinese goods to 104%, effective midnight on April 9, 2025. In retaliation, China has imposed a 50% tariff on U.S. imports, raising its total tariff rate to 84%.
• Unprecedented Measures: John Ruich emphasizes the severity, stating, “It's escalating, definitely. I mean, the magnitude is crazy. It's like nothing we've ever seen before.” (02:02)

This tit-for-tat escalation marks a significant intensification compared to previous measures undertaken during both the Trump and early Biden administrations.

---

Impact on U.S. Consumers and Businesses

The conversation shifts to the implications of these tariffs on American consumers and businesses:

• Consumer Prices: Asma Khalid points out that the U.S. imports a vast array of goods from China, many of which are integral to domestic manufacturing. The increased tariffs are likely to result in higher prices for consumers, effectively serving as a tax on goods.

• Agricultural Sector: Tamara Keith highlights the specific impact on American farmers, particularly those reliant on exporting products like soybeans to China. The retaliatory tariffs could disproportionately harm these sectors.

• Business Operations: John Ruich shares insights from Chinese businesses reeling under the new tariffs. “Capital Economics... said if the tariffs stay in place, Chinese shipments to the US could drop by 70%.” (02:25) This significant drop threatens the profitability and sustainability of Chinese exporters.

---

China's Market Diversification

The discussion delves into China's strategic responses to reduced dependency on the U.S. market:

• Diversification Efforts: Ruich notes that China has been actively diversifying its export markets. “The US share of Chinese imports overall has been falling. It fell from about 20% a few years ago to 15%, roughly.” (04:01) This shift towards Europe and global south markets mitigates the impact of U.S. tariffs.

• Long-Term Reductions: Ongoing trade frictions over the past several years have catalyzed this diversification, reducing China's economic over-reliance on the U.S.

---

U.S. Negotiations and Global Trade Relations

Asma Khalid and Tamara Keith explore the broader scope of U.S. trade negotiations beyond China:

• Bilateral Deals: Tamara Keith explains that the Trump administration is negotiating tailored trade deals with over 70 countries, aiming to lower tariff rates on a bilateral basis. “They are attempting to negotiate bilateral trade deals, new trade deals with 70 different countries.” (07:37)

• Challenges in Implementation: Robert (a guest host) mentions the complexity of these negotiations, highlighting the bespoke nature of each agreement. This process is time-consuming, raising questions about the duration of current tariffs.

• President Trump's Stance: Tamara Keith notes the administration's dual messaging. Initially, the focus was on restructuring the U.S. economy and bringing manufacturing back home. However, following market instability and recession fears, the narrative shifted to viewing the situation as a negotiation that requires patience and cooperation. “They should be doing the same, more or less.” (09:28)

---

China's Position and Potential for Dialogue

The potential for renewed talks between the U.S. and China is examined:

• Willingness to Negotiate: John Ruich asserts that China remains open to dialogue but refuses to negotiate under coercion. “They are open to talking about it, but they're not gonna do it under duress.” (08:43)

• Xi Jinping's Constraints: Ruich points out that Chinese leadership, particularly Xi Jinping, faces domestic pressures that discourage concessions. The Foreign Ministry demands an approach based on “equality, mutual benefit and respect” (08:43), setting stringent prerequisites for any negotiations.

• Broader Geopolitical Ties: The trade war is intertwined with other geopolitical issues, such as port disputes in Panama and concerns over TikTok, complicating the negotiation landscape.

---

Economic and Political Implications

The escalating trade war has multifaceted implications:

• Supply Chain Disruptions: Manufacturers in the U.S. face challenges in relocating production due to tariffs on alternative Asian countries like Vietnam and Indonesia. Asma Khalid shares a manufacturer's dilemma: shifting production is now hampered by tariffs in multiple regions, leading to uncertainty and operational disruptions. (10:08)

• Inflation and Political Support: Tamara Keith discusses the potential for rising consumer prices to erode political support for the Trump administration, which has championed reducing trade deficits and supporting American manufacturing. “If all of this causes prices to go up, and we will see that relatively soon, then that's going to be a political problem.” (12:37)

• China's Domestic Stability: John Ruich notes that despite economic pressures, China's political structure allows Xi Jinping to maintain control without significant public dissent, contrasting with the political vulnerabilities that might affect U.S. leadership.

---

Conclusion and Future Outlook

As the episode wraps up, Asma Khalid announces a significant development post-recording:

• Tariff Adjustments: President Trump has declared a 90-day pause on tariffs for most countries except China, where tariffs will increase to 125%. This move sets the stage for further negotiations and strategies, which the hosts promise to explore in the following episode.

• Looking Ahead: The hosts indicate that the evolving situation will have profound effects on international trade dynamics, U.S.-China relations, and the global economy. Listeners are encouraged to stay tuned for more in-depth analysis in upcoming episodes.

---

Notable Quotes

• John Ruich (02:02): “It's escalating, definitely. I mean, the magnitude is crazy. It's like nothing we've ever seen before.”

• John Ruich (02:25): “... Chinese shipments to the US could drop by 70%.”

• John Ruich (04:01): “The US share of Chinese imports overall has been falling. It fell from about 20% a few years ago to 15%, roughly.”

• John Ruich (08:43): “They are open to talking about it, but they're not gonna do it under duress.”

• Tamara Keith (09:28): “They should be doing the same, more or less.”

• Tamara Keith (12:37): “If all of this causes prices to go up, and we will see that relatively soon, then that's going to be a political problem.”

---

This comprehensive summary encapsulates the key discussions, analyses, and insights presented in the episode, providing listeners with a clear understanding of the escalating trade war between the U.S. and China and its broader implications.

Transcript

[NPR Announcer]

99% of the US population lives within listening range of at least one public media station. And everyone can listen to NPR podcasts free of charge. That means you get completely unpaywalled access to stories, prize winning reporting, and shows that represent the voices in every corner of the country. Hear the bigger picture every day on npr.

[Robert]

This is Robert at the North Shore Model Railroad club in Wakefield, Massachusetts. This podcast was recorded at 12:38pm Eastern.

[Asma Khalid]

Time on Wednesday, April 9th of 2025.

[Robert]

Things may have changed by the time you hear it, but here the trains are always on time.

[Asma Khalid]

I love that sound.

[Tamara Keith]

Chugga, chugga, chugga. I thought it was drums initially.

[Asma Khalid]

Hey there. It's the NPR Politics Podcast. I'm Asma Khalid. I cover the White House.

[Tamara Keith]

I'm Tamara Keith. I also cover the White House.

[Asma Khalid]

And today on the show we're joined by NPR's China correspondent, John Ruich. Hey there, John.

[John Ruich]

Hey.

[NPR Announcer]

Hey.

[Asma Khalid]

So you have graciously agreed to stay up super late to join us from Beijing. What time is it, by the way?

[John Ruich]

It's about 20 minutes till 1am oh my gosh.

[Tamara Keith]

Well, thank you for your service.

[Asma Khalid]

True dedication.

[John Ruich]

It's a rare opportunity to be on the show. I love it.

[Asma Khalid]

Well, today is tariff day. Yet again, it feels a bit like deja vu. Earlier this week, President Trump threatened to make the steep tariffs on China even steeper if China did not withdraw its retaliatory measures. And well, today President Trump kept his promise. There are now tariffs of 104% on Chinese goods that went into effect at midnight. China responded by implementing a 50% tariff on U.S. imports, bringing its total tariff rate to 84%. And John, it seems like this trade war between the US And China is escalating and escalating.

[John Ruich]

It's escalating, definitely. I mean, the magnitude is crazy. It's like nothing we've ever seen before. And these are crippling rates going in both directions. China had been retaliating to previous tariffs from the first Trump administration during the Biden administration, even at the beginning of this Trump administration with slightly smaller moves. But you know, the past few days, it's decided to just go toe to toe with the US and it's spir through the roof.

[Tamara Keith]

Yeah.

[Asma Khalid]

And the US does import a lot of goods, a lot of components that go into even things that are manufactured here in the US China is one of the United States largest trading partners. And John, I do want to ask if you have a sense of what effect this new tariff rate could have on U.S. consumers.

[John Ruich]

So I can answer that from a sort of point of origin of these products and these inputs type of perspective, you know, from businesses here in China are reeling, it seems. You know, we talked with a freight forwarder today who said the people in his sort of orbit are talking about putting on hold their shipments to the US Just not shipping anything to the US because it's unclear how the tariffs are going to be paid at this point. These tariffs go way beyond the average profit margin of Chinese products in the US So exporters can't just absorb the tariffs. Capital Economics, this research firm put out a note earlier today that struck me. It said if the tariffs stay in place, Chinese shipments to the US could drop by 70%.

[Asma Khalid]

What about the effects there in China during President Trump's first term? And we keep hearing this, even now from Trump administration officials, this belief that China needs the United States market.

[John Ruich]

Look, the US And China are the number one and number two economies in the world. They need each other.

[Tamara Keith]

Right.

[John Ruich]

The US Is important to China. China imports a lot of important things from the US Machinery, electronics. But China's been diversifying.

[Asma Khalid]

Right.

[John Ruich]

Also, these trade frictions over the past six, seven years have been taking a toll. So the US Share of Chinese imports overall has been falling. It fell from about 20% a few years ago to 15%, roughly.

[Asma Khalid]

Oh, that's interesting. And so they've just been exporting their things to other countries over the last few years over the U.S. yes.

[John Ruich]

Europe's a huge market. They've been diversifying into global south markets. Right. They've been expanding everywhere.

[Tamara Keith]

U.S. officials, and that includes Scott Besant, who was on the Fox Business Network this morning. They are making the case that this is way worse for China than it for the United States.

[Robert]

They are the surplus country, that their exports to the US Are five times our exports to China so they can raise their tariffs. But so what?

[Tamara Keith]

There are a couple of so what's that? I think are important to get to? 1, the US tariffs on Chinese goods and exports that come into the United States, that is going to be paid at least in some part by American consumers. Things are going to get more expensive. It's a tax. And then on the other side of it, China imposing tariffs on things like soybeans coming out of the United States could have sort of a disproportionate impact on American farmers or specific industries that in particular count on exporting to China.

[Asma Khalid]

All right, well, on that note, let's take a quick break and we have lots more in just a moment.

[NPR Announcer]

Wait, wait, Don't Tell me Fresh Air. Up first, NPR News. Now Planet Money, TED Radio hour. Throughline, the NPR Politics podcast Code Switch, Embedded books we love Wildcard are just some of the podcasts you can enjoy. Sponsor free with NPR. Get all sorts of perks across more than 20 podcasts with the bundle option. Learn more at plus.NPR.org When Malcolm Gladwell.

Presented NPR's Throughline podcast with a Peabody Award, he praised it for its historical and moral clarity. On Throughline, we take you back in time to the origins of what's in the news, like presidential power, aging and evangelicalism. Time travel with us every week on the Throughline podcast from npr.

Imagine, if you will, a show from NPR that's not like npr, a show that focuses not on the important, but the stupid, which features stories about people smuggling animals in their pants, incompetent criminals and ridiculous science studies. And call it, Wait, Wait, don't tell me, because the good names were taken. Listen to NPR's Wait, Wait, don't tell me. Yes, that is what it is called, wherever you get your podcasts.

[Asma Khalid]

And we're back. And Tam, I just want to get a status update from you on the tariffs on all these other countries. We mentioned a whole bunch of countries. What is the status of those tariffs and any potential for a trade deal?

[Tamara Keith]

There's definitely potential. And what I would say is, whereas last week the overriding message coming from the White House was this is about restructuring the United States economy, bringing manufacturing back to America. This is a national emergency. This isn't a negotiation. This week, after the markets have fallen multiple days, the bond markets are now going haywire, and people that run banks are talking about recessions. Um, now the message is, oh, no, this is a negotiation. President Trump is negotiating. Let's give him a chance. That's the message coming from Trump, allies, Republicans in Congress and others. Besant on the Fox Business Network this morning talked about the negotiating. He says he's not going anywhere for spring break because he's going to be negotiating these deals.

[Robert]

We have opened this process of negotiations country by country. It's going to be, you know, a bespoke tailored process for each country. And, you know, as we strike these trade deals, I think that we will see greater and greater certainty.

[Tamara Keith]

What's interesting to me about that is bespoke and tailored means. They are and apparently at least 70 countries have reached out. They are attempting to negotiate bilateral trade deals, new trade deals with 70 different countries. That's the kind of thing that doesn't happen quickly or overnight. And so the Question is, like, how long are these current tariffs going to be in place? And in the end, what do these deals look like?

[Asma Khalid]

John Tam just mentioned there that 70 some countries have reached out to the Trump administration to try to negotiate a trade deal to lower the tariff rates. Has China at all reached out? Doesn't look like they're blinking yet. But are they open to a deal?

[John Ruich]

Yeah, they definitely are. The leadership has repeatedly said they're open to talking about it, but they're not gonna do it under duress. Xi Jinping, the leader of China, has domestic political considerations. He doesn't wanna be seen as bowing down to Trump. Especially, you know, they're calling these tariffs blackmail, Right? So under those conditions, he's not gonna step back. China doesn't, you know, interestingly, they don't see these tariffs as a discrete issue. It's related to everything. It's related to the ports in Panama, which has been an issue that everybody's been talking about lately. It's related to the tikt. It's all in play as far as China's concerned. But the Foreign Ministry today demanded that the US Adopt an attitude of, quote, equality, mutual benefit and respect if it wants to start to talk about a deal.

[Tamara Keith]

And from the Trump side of things, they are saying, you know, China made a huge mistake by retaliating. President Trump said, everybody else is coming to me and begging for a deal. They should be doing the same, more or less. That wasn't an exact quote, but that's the sentiment.

[Asma Khalid]

So where's the off ramp for these two major economies? Because these are huge, huge amounts of tariffs, unprecedented levels that we didn't even see during President Trump's first term.

[John Ruich]

The people I'm speaking with here in China, look, say that there's two things. One, China does not want a projected trade war. It's gonna be painful. It's gonna be damaging. They might think they're in a good position to be able to weather it for a few months, half a year. A year. Ultimately, they would like to do a deal and they're looking for an appropriate off ramp. But point number two is that they don't wanna blink. They're not gonna blink. First conditions have to be right. The problem is that if esc. There's a really big concern is that China might start to target more US Companies. We've already seen investigations launched into Google, Nvidia, dupont, these big American companies. Are these going to turn into court cases next? Do they start to target other companies? Are executives going to start to get detained or Exit banned. We don't know.

[Asma Khalid]

We've heard the Trump administration talk about wanting to bring some manufacturing jobs back to the United States. Right. And we've also heard the Trump administration talk about wanting to level the playing field with China. In fact, this is something we heard even from the Biden administration that they felt like China wasn't always a fair trading partner. But it strikes me that these tariffs in this moment across the board are kind of contradictory, because it's not just China that the Trump administration is hitting. They have all these tariffs on all these other Asian countries. And so, you know, I was talking to a manufacturer here in Minnesota the other day, and he said to me, in the first Trump term, he knew, okay, fine, they want me to move some of our manufacturing outside of China. So he moved, you know, some of his supply chain to Vietnam and to Indonesia. But this time around, he's like, I don't know where to go. Where do we go? Because Vietnam's getting hit by tariffs, Indonesia is getting hit by tariffs. And so I don't understand what the big strategy is for this White House. Tam.

[Tamara Keith]

Well, what the president would say and has said on Truth Social is bring your factory to America, bring the jobs to America, make your stuff in America.

[Asma Khalid]

But some of this stuff isn't made here.

[Tamara Keith]

No, I know it is not actually an end game, but that is the rhetoric coming out of the White House is, if you have a problem, just bring it to America. Now, that does not get into the issue of cost. And, you know, President Trump ran and won on bringing down costs for Americans because Americans were upset about inflation. If all of this causes prices to go up, and we will see that relatively soon, then then that's going to be a political problem. But we have to remember that President Trump has believed that trade deficits are a negative, are the American people being ripped off, and he also firmly believes that the experts are wrong and he is right. So he has a different pain threshold than I think a lot of other people in politics might have.

[John Ruich]

And this game of chicken with the inflation rate is something that experts I've talked to think Xi Jinping is looking at. And he says, well, I'm actually in a better political position than Donald Trump is because of the controls of society here, because of the way the Chinese political system works.

[Asma Khalid]

All right, well, we are going to leave it there for today's podcast. John, thank you so much for being here.

[John Ruich]

You're welcome.

[Asma Khalid]

I'm Asma Khalid. I cover the White House.

[Tamara Keith]

And I'm Tamara Keith. I also cover the White House.

[Asma Khalid]

And thank you all as always for listening to the NPR Politics podcast. So a quick note here. After we taped this conversation, President Trump announced via social media a 90 day pause on the tariffs for most countries except China. Most countries will be left with a 10% tariff rate while China will immediately face a hike in tariffs to 125%. There is a lot more to discuss about this and we are going to dig into all of that tomorrow. So come back for more.

[Tanya Mosley]

This is Tanya Mosley, co host of Fresh air. You'll see your favorite actors, directors and comedians on late night TV shows or YouTube, but what you get with FRESH AIR is a deep dive. Spend some quality time with people like Billie Eilish, Questlove, Ariana Grande, Stephen Colbert, and so many more. We ask questions you won't hear asked anywhere else. Listen to the Fresh Air podcast from NPR and whyy.

[A. Martinez]

Hey, it's A. Martinez. Even as the host of a news show, it can be hard to keep up with the headlines. That is why we make the Upverse podcast every morning in under 15 minutes, we cover three major stories with context and analysis from reporters around the world. So you can catch up on locustapasando while getting ready, making desayuno, or going to work. So listen to the UpFirst podcast from NPR.