The term “tariff” has become a dominant topic in global economic discussions, particularly as the United States escalates trade conflicts by imposing tariffs on major economic partners, including China, Mexico, Canada, and the European Union (EU). The new U.S. administration has expressed the belief that other nations have been exploiting America, leading to an aggressive tariff strategy that has shocked the international community.

On March 7, 2025, Wang Yi, China’s Foreign Minister, addressed the issue during a press conference. Quoting a Chinese proverb, he suggested that the U.S. should reflect on the actual outcomes of its tariff policies:

“If one’s action fails, look for the reason within oneself.”

Wang posed several critical questions:

• Has the U.S. trade deficit decreased or widened?
• Has its manufacturing sector strengthened or weakened?
• Has inflation gone up or down?
• Have American living standards improved or declined?

According to Wang, the answers are clear—the tariff war has failed to achieve its intended goals, instead causing economic disruptions within the U.S. and globally.

The Hidden Cost of Tariffs: Who Really Pays?

Under international trade principles, tariffs often do not harm the exporting country as much as they impact importers and consumers in the taxing nation.

• After the 2018 U.S. tariffs on Chinese goods, U.S. importers and retailers absorbed over 90% of the additional costs, leading to higher consumer prices.
• The price of essential goods such as washing machines and steel increased by 9% to 12%.
• John Deere, a major U.S. tractor manufacturer, raised product prices due to higher raw material costs, making its products less competitive in the global market.

A recent 2024 decision by the U.S. to impose a 100% tariff on Chinese electric vehicles (EVs) was framed as a strategy to protect domestic manufacturers. However, it effectively eliminated U.S. consumers’ ability to purchase affordable, high-quality EVs, raising inflation by an estimated 2% to 3%.

Wang emphasized that these economic shifts demonstrate that tariffs primarily burden domestic industries and consumers rather than achieving meaningful economic protection.

Why Tariff Wars Fail: The Long-Term Global Impact

Historically, tariff wars have proven to be a lose-lose scenario. The economic consequences of aggressive tariff policies include:

1. Disruption of Global Trade – High tariffs distort market competition, affecting supply chains and trade balances.
2. Increased Inflation – Higher costs for imported goods lead to rising consumer prices, affecting household incomes.
3. Weakened Manufacturing Competitiveness – Domestic industries struggle with higher material costs, reducing their ability to compete globally.
4. Strained International Relations – Trade conflicts damage diplomatic ties, making economic cooperation more difficult.

Wang warned that the U.S. administration’s unilateral tariff policies were not only harming its own economy but also destabilizing the global trade system. He stressed that a WTO-centered, rules-based international trade framework is the only sustainable approach for global economic cooperation.

China’s Free Trade Strategy: A Contrast to U.S. Protectionism

While the U.S. continues to escalate trade disputes, China is actively expanding its trade partnerships. During the 2024 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC), President Xi Jinping announced a landmark economic decision:

• China will grant zero-tariff treatment to 100% of goods from 33 least-developed African nations that maintain diplomatic relations with China.
• This makes China the first major economy to implement such a comprehensive free trade policy with developing nations.
• The initiative is designed to help African economies grow by increasing exports to China’s vast consumer market.

China’s approach to global trade aims to:

1. Uphold Multilateral Free Trade – Strengthening the WTO and fair trade practices.
2. Resist Protectionism – Rejecting unilateral tariffs and trade restrictions.
3. Foster Economic Globalization – Creating a trade system that benefits all economies, including developing nations like Nigeria.

By embracing open markets, China seeks to establish itself as a leader in global trade while encouraging sustainable development and international cooperation.

What This Means for the Future of Trade

The U.S.-China trade conflict is shaping the future of global commerce, with far-reaching implications for businesses, consumers, and international relations.

• The U.S.’s tariff-heavy approach may yield short-term political gains, but its long-term economic consequences could prove damaging.
• China’s free trade initiatives are positioning it as a key economic partner for developing nations, particularly in Africa.

As trade tensions continue to escalate, global leaders must decide between protectionism and cooperation. The future of economic globalization will depend on whether nations choose conflict or collaboration in shaping the next phase of international trade.