The Illusion of Success: W
hy the China Tariff Pause Is Not a Victory
Red Dragon Files Op-Ed Thought Brief | May 2025
In geopolitics, outcomes matter more than optics. The public may be distracted by headlines and slogans, but markets, manufacturers, and adversaries are watching something else: the numbers. In a global economic confrontation—especially one involving a strategic rival like China—results are reality.
Today, Washington is trying to sell the public on a “win-win” moment: de-escalation, dialogue, cooperation. But here’s the truth:
This isn’t a victory. It’s a retreat.
And the only thing worse than losing a trade war is pretending you didn’t.
Perception Shapes the Narrative—But Numbers Don’t Lie
Right now, two stories are being told:
- One is diplomatic: “Strategic competition, not decoupling. Lower tariffs. More engagement.”
- The other is measurable—and it’s the only one that matters:
Are we selling more U.S. autos in China?
Are domestic pharmaceuticals, health supplies, and rare earths industries surging?
Is our trade balance improving—or deepening?
Have fentanyl precursors from China stopped flowing?
Is China scaling back its hacking, military expansion, or Belt and Road project?
Until we can answer yes to those questions, the current narrative may be noise. Worst case status quo ante, best case a firm foundation is laid in the next ninety days for more lasting measures, and this pause encourages other nations to beat a path to work out deals now that they know Trump can be reasonable.
From Strategic Pressure to Empty Promises
Back in 2018, the Trump administration took the rare step of going toe-to-toe with Beijing. Section 232 tariffs hit steel and aluminum. Then came waves of duties on electronics, autos, and industrial machinery. Over $550 billion in Chinese goods were covered. The message was clear: decoupling was on the table.
It was working. Xi’s economy slowed. Capital fled. Internal dissent grew.
But at the 2018 G20 in Buenos Aires, Trump paused, agreeing to a 90-day truce. In exchange? China offered soft promises:
- Buy more U.S. agriculture
- Talk about IP
- Crack down on fentanyl
- “Discuss” economic reforms
It became the model for all that followed: promises, not outcomes.
- Steel overcapacity? Still flooding global markets
- EV subsidies? Expanding
- IP theft? Ongoing—still no enforcement tools
- Slave labor in Xinjiang? Ignored
- Rare earth control? Unchallenged
And instead of compliance metrics, we got slogans:
“No decoupling.”
“Win-win cooperation.”
“Mutual respect.”
I am hearing this tune again… Are you? Not good, because the Chinese Threat today is graver then. Just look at the expansion of their military forces, naval ports throughout the world, and man-made islands in the South China S
The Biden Pause: Soft Language, Softer Results
When President Biden entered office, the tariffs remained—but enforcement evaporated.
His administration’s posture shifted to one of “guardrails,” “stability,” and “strategic communication.” But here’s what actually happened:
- Carve-outs and exemptions expanded
- U.S. manufacturers lost pricing protection
- Enforcement mechanisms were quietly buried
- Human rights issues like forced labor got rhetorical concern—but no trade penalties
All while China’s global leverage grew:
- Fentanyl precursor chemicals kept flowing into North America
- Cyberattacks on U.S. infrastructure continued unchecked
- PLA naval bases expanded in the Indo-Pacific
- The Belt and Road Initiative secured new port deals in Africa and the Middle East
So while Washington whispered about cooperation, Beijing was building.
May 2025: The Data Test Begins
This year’s interim agreement—with Trump back in office—lowered tariffs across the board:
- From 145% to an average of 30%
- Low-value import duties fell from 120% to 54%
- Chinese retaliation? Cut from 125% to 10%
No new restrictions on:
- EVs
- Rare earths
- Slave-labor-linked goods
No hard commitments on:
- Market access
- Export license reform
- Fentanyl enforcement timelines
The result? Wall Street cheered. Beijing smiled. And U.S. industry braced for impact.
Here’s What We Must Measure Now
This deal will succeed or fail based on hard outcomes. Watch these numbers:
- U.S. auto exports to China: Are they up, or still blocked by soft quotas and tariffs?
- Domestic manufacturing: Are pharma, health supplies, semiconductors, and rare earths industries growing—or freezing investment?
- Fentanyl precursors: Have seizures dropped, or stayed steady?
- Trade deficit with China: Is it shrinking—or swelling again?
- Hacking and espionage: Is China curbing its cyber campaigns—or accelerating them?
- Military and diplomatic expansion: Is the PLA pulling back, or doubling down in Asia and the global south?
If those answers go the wrong way, this deal is a strategic failure—no matter the headlines.
Public Sentiment Matters—But Industry Votes With Capital
Here’s what the White House and Beijing both understand: if the American public believes this is a reset, the pressure will ease. But capital won’t be fooled.
If you’re a CEO deciding whether to invest $100M in a new U.S. facility, you’re not reading press releases. You’re asking:
- Will China undercut me again?
- Will policy shift again in six months?
- Will I get steamrolled by slave labor and subsidies?
Right now, the answer to all three is: very possibly.
And that’s why reshoring is stalling. That’s why factories are pausing. That’s why the so-called “revival” is on ice.
Conclusion: Decoupling Was Never Easy—But It Was Necessary
Trump once said decoupling wouldn’t be easy—but it would be worth it. He was right. But this latest turn suggests the revolution he started has now gone into reverse.
America stood firm—for a time. But when the pain reached Beijing, Washington blinked. And China noticed. So did U.S. manufacturers. So did our allies. So did the CCP.
We had the dragon chained. We chose to loosen the links.
If this moment becomes another chapter in American economic leverage’s long, soft decline, history won’t forgive us.
It won’t matter how good the press conference sounded.
It will matter whether the numbers moved.