Chen Li
Since the outbreak of the China-U.S. trade war in 2018, the conflict has emerged as one of the defining issues in the global economic landscape. Despite numerous attempts at negotiation over the years, no resolution has been reached. With Donald Trump’s return to the White House, U.S. tariffs on Chinese goods have escalated significantly, prompting China to retaliate with its own tariffs.
After a recent meeting in Geneva, both sides agreed to adjust – although not entirely remove – these tariffs and resume talks. The detente remains temporary, however, and further discussions are ongoing.
The tariff war has effectively served as a “stress test” of the mutual trade dependence between the two nations. Before it began, the depth of this interdependence was widely underestimated. However, once the conflict unfolded, it became strikingly clear that, despite China’s long-standing emphasis on self-reliance, the country remains heavily reliant on the U.S. for a broad array of products. The abrupt disruption in trade exposed significant vulnerabilities. On the American side, there was also a lack of awareness regarding the extent to which Chinese manufacturing and products are embedded in the fabric of everyday life.
China’s outlook in a full-scale trade war is far from optimistic, particularly in sectors like aviation manufacturing. The domestically produced C919 aircraft still relies heavily on foreign, primarily American, suppliers for critical components. A Financial Times analysis revealed that nearly all the key parts are imported, with the crucial LEAP-1C engine supplied by CFM International, a France-U.S. joint venture with core components made in Ohio. China’s own replacement engine remains in testing and is not yet viable. The C919’s supply chain includes 48 U.S. suppliers, compared to just 14 Chinese ones, providing essential systems such as avionics and flight controls through companies like Honeywell and Collins Aerospace. This heavy dependence means the United States could effectively cripple China’s large aircraft ambitions, and any retaliatory sanctions by China risk significant self-harm.
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