Trump and Xi's Trade War: Who's Really Winning?

Setting the Stage for a High-Stakes Meeting

As Chinese President Xi Jinping prepares for his state visit to Washington, DC, the spotlight is on one of the world's most consequential economic rivalries: the trade war between the United States and China. This isn't just another diplomatic encounter—it's a critical moment where the future of global trade, technology, and geopolitical influence hangs in the balance.

President Donald Trump, who has made trade policy central to his second term, is expected to welcome Xi on the tarmac at Joint Base Andrews—an unusual gesture for such a high-stakes visit. The meeting will be a key test of whether the two nations can find a path forward amid escalating tensions and mutual economic leverage.

"This is a critical moment in US-China relations," I said during an interview with Al Jazeera. "Both sides are trying to balance economic pressure with political necessity."

But what does the data actually tell us about who's winning this trade war? While tariffs and tech restrictions dominate headlines, the real story is more complex.

Understanding the Tariff Landscape

As of July 2026, Chinese goods entering the U.S. face an average tariff rate of 36.5 percent. In contrast, US goods entering China carry a slightly lower average of 31 percent—though the disparity becomes stark when we look at specific products.

• Chinese copper and its products are hit with effective tariffs as high as 73.6 percent
• Aluminum and steel face rates between 50% and 58%
• Vehicles and auto parts see tariffs around 44.4%

On the flip side, China imposes an additional 10% tariff on top of its regular duties on U.S. imports. So, while crude oil sees a 20% tax, soya beans face 13%, and beef can hit up to 77%.

This is a reflection of Trump's aggressive strategy post-election in January 2025. The tariffs were introduced partly to address concerns over fentanyl and immigration, but they quickly evolved into broader economic warfare.

The Evolution of Trade Policy

By April 2025, the trade conflict intensified with Chinese goods facing 145% tariffs, while Beijing imposed 125% on U.S. imports—including restrictions on rare earth exports.

Despite a temporary truce agreed upon during talks in South Korea, both sides have continued their economic brinkmanship. The U.S. has banned imports of humanoid robots from China, sanctioned shipping firms handling Iranian fuel, and threatened sanctions on Chinese AI firms.

In response, Beijing introduced countermeasures including sanctions against American companies and curbs on drone exports to the U.S. This tit-for-tat escalation shows that tariffs are only one element in a larger game of strategic economic warfare.

How Has Trade Actually Been Affected?

The impact on bilateral trade has been dramatic. In 2025, US-China trade dropped by nearly 30%, from $584 billion to $415 billion, according to U.S. Census Bureau data.

This trend continued into early 2026, with January-July 2026 trade totaling $222 billion—a 14.5% decline compared to the same period in 2025 and a 31% drop from 2024.

But what's happening isn't just a simple fall-off in trade volume—it's also a reconfiguration of global supply chains. While U.S. imports from China have dropped significantly, Chinese exports to other markets—particularly ASEAN countries, the EU, and emerging economies—are rising sharply.

China's Global Trade Surge

Despite the trade war with the U.S., China's total goods exports rose 6.1% in 2025, reaching nearly $3.77 trillion. The country redirected its focus toward regions that were less impacted by Trump's tariffs.

Exports to ASEAN countries climbed 14% to about $660 billion, making it China's largest export market. Exports to the European Union grew by 9%, reaching approximately $560 billion.

In the first seven months of 2026 alone, Chinese exports rose 13.4%, marking their eleventh consecutive quarter of growth. Notably, China-ASEAN trade hit $744 billion in that timeframe—a 24.7% increase from the previous year.

This expansion is fueled by China's rise up the value chain, especially in high-tech sectors like electric vehicles, batteries, electronics, and machinery. In effect, China has found new markets to offset losses in the U.S., proving its resilience in a volatile global economy.

Is the Trade Deficit Really Going Down?

One of the most widely cited arguments for Trump's trade war was that it would reduce America's trade deficit. However, the numbers tell a different story.

The U.S. goods trade deficit actually rose during Trump's second term. In 2024, it stood at $1.201 trillion. By 2025, it had increased to $1.235 trillion—an increase of 2.8% in his first year back in office.

Between May and July 2026, the U.S. recorded a combined goods trade deficit of $325 billion, up from $277 billion during the same period in 2025—a rise of 17.4%.

This suggests that while tariffs may have limited U.S. imports from China, they haven't significantly reduced the overall trade imbalance. Instead, the deficit is growing in some sectors, indicating deeper structural challenges in America's international commerce strategy.

Who's Winning This Trade War?

The answer isn't straightforward. Each side has gained and lost depending on how you measure success:

• For the U.S., the trade war may have slowed down imports from China, but it failed to deliver the promised reduction in deficits.
• China, despite facing significant tariffs, has maintained and even expanded its global export capacity through strategic redirection and economic diversification.
• The tech war continues, with each nation attempting to control key supply chains—especially in semiconductors and AI. Here, both sides are exerting pressure without a clear winner.

In short, the trade war has become less about winners and losers and more about shifting global economic power dynamics. As we approach this critical meeting between Trump and Xi, it's important to remember that economic policy is rarely about simple victories—it's about long-term strategy, adaptability, and navigating an increasingly fragmented global order.

Looking Ahead

With the tariff truce due to expire on November 10, both nations face a crossroads. The outcome of these negotiations will shape not only bilateral trade but also the broader landscape of international commerce in the years to come.

If the U.S. continues down its current path, it risks isolating itself further from global markets while failing to address core structural issues within its economy. Meanwhile, China's strategy of economic flexibility and market diversification has proven robust, allowing it to maintain momentum despite external pressures.

Ultimately, the real test isn't whether one country can dominate another—it's how effectively they can manage a complex, interdependent global system where no single nation truly wins or loses in isolation.