US-China Trade War Escalates, Impacts Global Economy

The escalating US-China trade war, intensified under a second Trump administration, is forcing countries, particularly in Southeast Asia and the developing world, into difficult positions as they navigate competing economic and geopolitical pressures. ASEAN nations, for example, are caught between their economic reliance on China and the political and trade influence of the US, making it nearly impossible to choose sides without incurring losses. Developing countries more broadly face challenges such as disrupted supply chains, reduced demand for exports, and increased import costs, but may also find opportunities if they can adapt quickly to shifting trade dynamics. While the US has tried to leverage alliances with countries like Japan and India to isolate China, Beijing’s strong position in global trade and threats of retaliation against nations siding with the US highlight its growing dominance. Data shows that the majority of countries now conduct more trade with China than with the US, underscoring a shift in global economic power. As these tensions play out, both policymakers and businesses must carefully balance relationships to safeguard national and economic interests.