Document Type : Original Article

Authors

• Mitra Rahnejat ¹
• Morteza Bananejad ²

¹ Associate Professor, Department of Political Economy and Public Policy, Allameh Tabataba’i University, Tehran, Iran.

² M.A Student, Department of North American Studies, Allameh Tabataba’i University, Tehran, Iran.

Abstract

Problem Statement
The tariff war between the United States and China has emerged as one of the most significant developments in the contemporary international economic system. Since 2018, the United States has imposed a series of tariffs on Chinese imports, citing concerns related to trade imbalances, intellectual property rights, technology transfer, and national security. In response, China adopted retaliatory tariff measures against a wide range of American products. Consequently, what initially appeared to be a bilateral trade dispute evolved into a broader geo-economic confrontation with far-reaching implications for global trade? The significance of the United States–China tariff war extends beyond the economic relations of the two countries. As the world's two largest economies and major actors in international trade, any disruption in their commercial interactions inevitably affects global supply chains, international investment flows, production networks, and trade governance mechanisms. The tariff war has challenged the principles of free trade and economic liberalization that have characterized the global trading system for decades. Moreover, it has raised concerns regarding the effectiveness of the World Trade Organization (WTO) in resolving disputes between major powers and maintaining a rules-based trading order. Previous studies have primarily focused on the immediate economic consequences of the tariff war, including its effects on trade volumes, production costs, consumer prices, and bilateral trade balances. However, relatively less attention has been paid to the long-term and structural implications of the conflict for global trade. In particular, the relationship between tariff protectionism, geo-economic competition, and the emergence of neo-mercantilist policies requires further scholarly examination. This study seeks to address this gap by analyzing the future effects of the United States–China tariff war on global trade and evaluating its implications within the broader framework of international political economy.
Research Objective
The primary objective of this study is to analyze the future impacts of the United States–China tariff war on global trade and to assess the extent to which these developments are consistent with the principles and regulations of the World Trade Organization. The research also aims to examine how the tariff war contributes to structural transformations in the international trading system, including the reconfiguration of global supply chains, changes in foreign investment patterns, and the growing tendency toward economic protectionism. Furthermore, the study investigates whether the ongoing tariff war reflects a broader shift toward neo-mercantilism in international economic relations. By exploring the strategic dimensions of the conflict, the research seeks to identify potential future scenarios for global trade governance and the evolving balance between free trade and state-led economic competition.
Research Methodology
This research adopts a descriptive-analytical approach and relies on qualitative content analysis. The theoretical framework is developed based on major theories of international political economy and international trade, particularly perspectives related to economic nationalism, strategic trade policy, and neo-mercantilism. These theoretical perspectives provide the basis for identifying potential causal mechanisms linking the tariff war to structural changes in global trade.  Data were collected through extensive library research, including academic articles, books, reports published by international organizations, policy papers, official government statements, and documents issued by trade institutions. The collected materials were systematically examined and coded using qualitative content analysis techniques in order to identify recurring themes, patterns, and causal relationships. To enhance the reliability and validity of the findings, the study employs two case studies focusing on specific dimensions of the United States–China tariff war. These cases were selected to illustrate how tariff measures have influenced trade flows, investment decisions, and supply-chain restructuring. Through process-tracing and comparative analysis, the research evaluates the broader implications of these developments for the future of global trade.
Findings
The findings indicate that the tariff war between the United States and China is not merely a temporary commercial dispute but rather a strategic manifestation of geo-economic rivalry between two major powers. The conflict has significantly affected bilateral trade relations by increasing trade barriers, reducing market predictability, and generating uncertainty for businesses and investors. One of the most important consequences of the tariff war has been the reconfiguration of global supply chains. Faced with rising tariff costs and growing political risks, multinational corporations have increasingly diversified their production networks and relocated parts of their manufacturing activities to alternative destinations in Asia and other regions. This trend has accelerated the transformation of global production systems and reduced the concentration of manufacturing activities in a single country. The study also finds that the tariff war has contributed to changes in international investment patterns. Many firms have reconsidered their investment strategies in response to shifting trade regulations and geopolitical tensions. As a result, foreign direct investment flows have become increasingly influenced by political and strategic considerations rather than purely economic factors. Another significant finding concerns the growing resurgence of protectionist and neo-mercantilist policies. Both the United States and China have increasingly employed trade instruments as tools of strategic competition. Tariffs, industrial subsidies, export controls, and technology restrictions have become important mechanisms through which states seek to enhance national competitiveness and secure strategic industries. This development reflects a departure from traditional liberal trade principles and signals a broader transformation in the international economic order.
The findings further suggest that the tariff war has weakened confidence in multilateral trade institutions, particularly the World Trade Organization. The inability of existing mechanisms to effectively manage disputes between major powers has encouraged states to pursue unilateral or regional approaches to trade governance. Consequently, regional trade agreements and strategic economic partnerships have gained greater importance in shaping the future architecture of global trade.
Conclusion
The study concludes that the United States–China tariff war represents a fundamental challenge to the existing global trading system. Rather than being a short-term economic disagreement, the conflict reflects a deeper process of geo-economic competition and strategic rivalry between the world's leading economic powers. Its effects extend beyond bilateral trade and encompass global production networks, investment flows, trade governance structures, and international economic norms. The continuation of the tariff war is likely to accelerate the transition toward a more fragmented and multipolar trading system characterized by increased protectionism, regionalization, and strategic competition. Such developments may contribute to the gradual erosion of the liberal international trade order and strengthen neo-mercantilist approaches to economic policy. Therefore, the future of global trade will increasingly depend on the ability of international institutions and major powers to adapt to these emerging realities. Without effective mechanisms for dispute resolution and cooperative economic governance, the risks of prolonged trade conflicts and systemic instability are likely to increase. In this context, the tariff war between the United States and China serves as a critical indicator of the broader transformations currently reshaping the global economy and the future trajectory of international trade.

Keywords

• Tariff War
• United States
• China
• Global Trade
• Neo-Mercantilism
• Economic Protectionism
• World Trade Organization
• Geo-Economics

Main Subjects

• International Relations