The US-China Trade War: Causes, Consequences, and the Future of Bilateral Relations

The trade war between the United States and China, which began in 2018, has changed the landscape of international relations. The increase in tariffs by both the U.S. and Chinese governments has posed a threat to the stability of international trade and multilateral cooperation. Governments have cited the trade deficit between the U.S. and China as the primary cause of this trade war. In 2025, with the beginning of Donald Trump's second presidential term, it is expected that U.S.-China relations will enter a phase of greater uncertainty and turbulence. This study, while examining the causes of the trade war between the U.S. and China and its impact on the Islamic Republic of Iran, aims to answer the question: What are the effects of the U.S.-China trade war on the global economy and the future of relations between the two countries? The findings suggest that the trade war between the U.S. and China has wide-ranging complexities for the global economy. The increasing geopolitical tensions between the U.S. and China could push the world towards another Cold War, as this forces other countries to choose between the two global economic power blocs.

Introduction

This study aims to understand the impact of the trade war on U.S.–China relations, the global economy, and the main reasons behind the onset of the trade war between these two countries, using the theory of offensive structural realism. The causes of the trade war between the United States and China are not limited to the trade deficit issue but also include other factors, such as security and technological concerns. The current trade war is more than just an economic conflict; it reflects the geopolitical struggle between two superpowers. This conflict has increasingly moved beyond purely economic tools, incorporating security, technological, and even ideological dimensions. In this research, the theoretical framework is first outlined, followed by an exploration of the concept of trade wars and their history between the United States and China, the evolution of U.S.–China trade relations over time, the role of the World Trade Organization in the U.S.–China trade war, and the impacts of this conflict on both countries and the global economy.

Theoretical Framework

To explain the strategic competition between the United States and China in the Asia–Pacific region, the theory of structural realism can be applied. This theory, which is divided into two branches—defensive and offensive—offers a structural perspective on great power competition and argues that the structure of the international system compels great powers either to seek security or to engage in continuous competition for the accumulation of power. Viewing the state as the primary actor in international politics, this theory presents a strong realist narrative, asserting that as long as the international system remains anarchic, struggles over power and security will continue. The structure of the system determines state behavior, and the primary basis of such behavior is ensuring survival and the acquisition, preservation, and expansion of power. Accordingly, the prevailing structure undergoes transformation only when the distribution and configuration of power among actors change. Offensive neorealists believe that great powers are constantly seeking opportunities to increase their power relative to their rivals, with the ultimate goal of becoming a hegemonic power.

Research Methodology

This research adopts a descriptive–analytical method to examine the trade war between China and the United States. Data collection has been conducted through library-based research, drawing on various sources including books, articles, academic journals, and other texts, as well as searches of informational databases and online resources. The methodology employed in this study is qualitative, with an emphasis on analyzing sources and testing the research hypothesis.

Discussion and Research Findings

The reasons behind the trade war have both political and economic dimensions. A key political factor in the trade war between the two countries is the competition for dominance over the global economy. In recent years, China has experienced rapid growth and has become a major economic power, with its production volume now ranking second globally. The trade war between the United States and China could potentially lead to a significant disruption in trade between the two countries. While the economic damage to the United States primarily results from the loss of consumer welfare due to high tariffs on imports, China’s economy may experience declines in GDP in certain sectors.
     In the long term, the trade war may lead to the formation of two economic blocs, in which the United States and China dominate distinct spheres of influence. This scenario could result in the economic separation of the United States and China. Over time, if companies shift their production toward one of these blocs, the question will arise as to whether each bloc will be able to maintain sufficient levels of production. The relocation of production to other countries requires careful examination of infrastructure, human capital, regulations, and legal frameworks in those countries.

Conclusion

The causes of the trade war between the United States and China are not limited to the trade deficit; other factors, including security and technological concerns, are also involved. The United States, as the established power in the international system, seeks to prevent the rise of China’s power. The policy of containing China began during the presidency of Barack Obama and has continued into the second term of Donald Trump. The imposition of tariffs has been linked to the emergence of China as a major power in the international system and the challenge this poses to U.S. interests. This dynamic has led to increased tensions and conflicts in relations between the two countries.
Ethical Considerations
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Funding
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Conflict of interest
The authors declare no conflict of interest