Businesses Beware: Chaotic Tariff Policies Keep US-China Trade in a Dangerous Gridlock

On May 12, 2025, negotiators in Geneva inked a U.S.-China trade deal meant to ease years of economic strain. Tariffs on Chinese goods fell from a crushing 145% to 30%, and China lowered its duties from 125% to 10% for 90 days. Yet, the expected surge in trade hasn’t arrived. Apollo’s Torsten Slok, a leading economist, highlights stagnant container traffic as a troubling sign. Businesses, gripped by uncertainty, are hesitating to dive back into trade. This standstill reveals a deeper problem: our current trade strategy with China is faltering.

For too long, the U.S. has relied on tariffs to pressure China into fairer practices. But the numbers tell a stark story. U.S. imports from China, valued at $462.6 billion in 2024, show only a slight increase in electronics and tech components. Shipping data confirms no broader recovery. Companies face a chaotic policy landscape where tariffs can spike without warning, making long-term planning nearly impossible. The result is a trade relationship stuck in neutral, unable to drive growth.

This gridlock hits American families hardest. Tariffs inflate the cost of everyday goods, from laptops to winter coats. With budgets already tight, these trade barriers add unnecessary strain. Why cling to a policy that burdens our own people while failing to deliver results? The push for economic isolation, led by tariff advocates, ignores the clear benefits of working with China to build a stronger, more stable economy.

The frustration is palpable. Engagement with China has historically opened markets and lowered costs. Since China joined the World Trade Organization in 2001, global trade rules have shaped its economic behavior, even if imperfectly. Walking away from that framework now risks higher prices and weaker U.S. influence. A smarter approach would build on past successes, not dismantle them.

The evidence is undeniable. Trade barriers aren’t protecting us; they’re holding us back. Families deserve policies that prioritize affordability and opportunity, not ideological standoffs.

The drive to distance the U.S. economy from China, fueled by geopolitical tensions and backed by figures in the current administration, has reshaped global commerce. U.S.-China trade has collapsed by nearly 90% since tariffs hit their peak. Companies are scrambling, with 88% planning major supply chain overhauls in 2025, shifting production to places like Mexico or Vietnam. While this may seem like a strategic pivot, it comes with steep costs. Relocating supply chains raises expenses, and consumers end up footing the bill.

Supporters of this shift, including many in the administration, claim it safeguards American jobs and security. They cite China’s subsidies and intellectual property practices as threats. Yet, this strategy raises a critical question: how does driving up costs for American families strengthen our nation? Democratic leaders, with 49% of their base viewing trade with China as a national asset, argue that isolating China inflates prices and erodes U.S. leadership in global markets. History supports their caution. After the 2008 financial crisis, rising protectionism slowed trade growth, and the 2018 tariff war only deepened the damage.

Today’s trade landscape is even bleaker. The Trade Openness Index, now at 56%, is set to drop to 53% by mid-2026. Over 3,000 trade restrictions since 2019 have choked global commerce, with the World Trade Organization forecasting a 0.2% to 2.0% decline in merchandise trade for 2025. These barriers don’t just hurt China; they stifle the open markets that have driven prosperity for decades. Retreating from global trade undermines the very economic strength we need to compete.

A better path exists, one rooted in strategic engagement with China. This vision, championed by Democratic leaders, balances competition with cooperation. It calls for targeted investments in critical sectors like semiconductors, alongside open dialogue on issues like climate change and intellectual property rights. China’s integration into global markets since 2001 has shown that engagement can drive accountability, even if progress is uneven. Abandoning that approach now hands other nations the chance to set global standards.

Businesses are already navigating uncertainty with innovative strategies, from multi-sourcing to advanced analytics. But they need consistent policies to succeed. The Federal Reserve Bank of Richmond’s 2025 CFO Survey reveals that 30% of executives rank trade policy as their top worry. At the same time, Deloitte projects a 3.4% rise in U.S. business investment in 2025, with potential for 6.3% growth in 2026 if trade tensions cool. Why jeopardize this momentum with policies that breed instability?

China’s trade resilience offers a lesson. Its exports to non-U.S. markets rose 5.6% in April 2025, driven by demand in Asia and Europe. Isolating China doesn’t weaken its economy; it redirects its focus to other partners. The U.S. can counter this by keeping China engaged, using trade to foster mutual accountability and economic stability. Cooperation, not confrontation, positions us to lead.

The choice before us is stark. A world divided by trade wars and rival blocs threatens economic growth and U.S. leadership. The approach favored by Democratic advocates—emphasizing engagement, multilateral rules, and strategic competition—charts a path to shared prosperity. It tackles China’s challenges through negotiation and global standards, not by raising costs for American families. We can’t afford to let tariff-driven policies dictate our future.

The administration’s focus on economic nationalism, with its heavy tariffs and export controls, overlooks the reality of today’s interconnected world. Open markets have fueled global growth since the 1970s, lifting millions into economic security. Turning our backs on that legacy risks long-term stagnation. What kind of economy are we building if we prioritize barriers over opportunity?

The time for change is now. By embracing trade engagement, the U.S. can shape a global economy that benefits everyone. This means negotiating with China, strengthening alliances, and investing in industries that secure our future. The data is clear: cooperation drives progress, while isolation breeds decline. Let’s choose a future where America leads through openness and strength.