China-U.S. Competition for Dominance in Global Trade

2025/11/02 | Economy, Note, top news

Strategic Council Online– Opinion: While the world has not yet been freed from the consequences of the pandemic and geopolitical disruptions, the economic competition between the world's two giants – the United States and China – in East Asia has reached its peak.

Sina Raymand – International Relations Analyst
Recently, the United States, under the leadership of Donald Trump, signed bilateral trade agreements with four Southeast Asian countries (Malaysia, Cambodia, Thailand, and Vietnam) to move supply chains away from China. In response, China signed the protocol to upgrade the free trade agreement with the Association of Southeast Asian Nations (ASEAN) to version 3.0, focusing on digital trade, the green economy, transportation, and supply chains.
This agreement targets a market of 2 billion people with a GDP of $3.8 trillion and strengthens bilateral trade, which reached $1 trillion last year. These moves have turned Southeast Asia into the main arena for the competition to dominate global trade. In this analysis, we examine the mechanisms of this competition and outline probable scenarios.

Competitive Strategies: Tariffs vs. Integrity
U.S. Strategy: Protectionism and “Friendshoring”
Trump, by reviving the trade war, has imposed heavy tariffs (up to 145% on Chinese goods) to bring production back to the U.S. and its allies. The recent agreements with ASEAN cover 68% of the $475 billion in bilateral trade and focus on critical minerals, agriculture, and investment.
This approach is part of “Friendshoring,” which shifts supply chains to Vietnam, India, and Mexico. According to estimates, the tariffs will generate $2.9 trillion in revenue by 2034 but will reduce U.S. GDP growth by 0.23%. Initiatives like the IPEF (Indo-Pacific Economic Framework) are also designed to counter China’s RCEP (Regional Comprehensive Economic Partnership).
China’s Strategy: Openness and Regional Influence
China, by upgrading CAFTA 3.0 (China-ASEAN Free Trade Agreement version 3.0), is positioning itself as a trade alternative. This agreement removes non-tariff barriers and emphasizes the green and digital economy – areas where bilateral trade in the first nine months of 2025 grew by 9.6% to $785 billion. The Belt and Road Initiative (BRI), with massive investments in ASEAN infrastructure, makes China a leader in global supply chains. Chinese sources like China.org.cn describe this as a “win-win cooperation” rather than “American unilateralism.” China has also created leverage by restricting exports of rare earth elements.
ASEAN’s Role: Smart Balancing of Relations
ASEAN, with a collective GDP of $3.8 trillion, is the key to victory for either side in this competition. Malaysian Prime Minister Anwar Ibrahim emphasized “ASEAN centrality” yesterday with Trump, today with China. However, the Philippines, alluding to the situation and trend of confrontation with China in the South China Sea, warned that cooperation should not involve “coercion.” Vietnam and Thailand benefit from supply chain shifts, but Trump’s tariffs also put pressure on ASEAN. According to a Bloomberg report, the region, conditional on partner diversification, could benefit from the competition.

Global Consequences: Supply Chain Restructuring and Weakening of the WTO
It must be considered that this competition is polarizing global trade. Supply chains are shifting from China to ASEAN, evidenced by a 30% increase in FDI in Vietnam, but costs have increased, with global inflation at 1-2% and economic growth 0.5% lower. Meanwhile, the World Trade Organization (WTO) has been weakened, and regional blocs (RCEP vs. CPTPP) have become the dominant powers. China has already taken the leading position, with its share of global trade reaching 14%, compared to 11% for the U.S.

Future Scenarios: From Escalating Trade War to Limited Compromise
Scenario 1: Escalating Trade War (40% probability): If the Trump-Xi meeting at the APEC summit in South Korea (Thursday) fails, tariffs could reach 200%. China responds with counter-sanctions and the BRI. ASEAN would be the main loser in this process, experiencing 1% lower growth and 3% inflation. Supply chains would become completely polarized, with “China+1” versus “America+Friend.”
Scenario 2: Limited Compromise (35% probability): The Wall Street Journal reports that the U.S. might reduce tariffs in exchange for controls on fentanyl and soybean purchases. Bloomberg predicts this detente would limit the impact of tariffs, with U.S. economic growth at +0.5% and China’s at +1%. In this case, ASEAN wins, and trade growth would be +10%.
Scenario 3: Victory of the Smart Balancing Strategy with ASEAN (20% probability): ASEAN, leveraging its centrality, balances both sides. RCEP and the new CAFTA version guarantee 7% regional economic growth. Trump competes for minerals, Xi for markets.
Scenario 4: Complete Decoupling (5% probability): In this case, two parallel economies form. This would result in a 5% loss in global GDP by 2030.

Conclusion: An Emerging Multipolar World
The China-U.S. competition has turned trade from a liberal domain into a strategic issue. China is ahead in openness and influence, but Trump could reverse this trend by leveraging tariffs. ASEAN is the key to this competition, and smart balancing of relations creates the optimal scenario. Global leaders should prioritize green and digital cooperation instead of a zero-sum game. The APEC meeting will be a turning point, and global markets are awaiting this development.

China | East Asia | Economic war | Sina Raymand | Tarrif | USA | World trade

https://scfr.ir/en/?p=383714

0 Comments

LATEST CONTENT

Europe’s Enduring Dependence on Persian Gulf Energy

Europe’s Enduring Dependence on Persian Gulf Energy

2026/05/28

SCFR Online – Opinion: The dominant discourse in the field of European energy security over the past two decades has revolved around diversification of supply sources and the gradual reduction of dependence on fossil fuels. This narrative, which gained particular momentum after the Ukraine gas crisis in 2006 and its intensification in 2014 and 2022, was based on the assumption that Europe could free itself from the geopolitical vulnerabilities arising from dependence on specific suppliers through investment in renewable energy, imports of liquefied natural gas from diversified sources, and the establishment of new infrastructure. However, a closer analysis of energy trade data and the structure of the global oil and gas supply chain presents a different picture. Europe has not only failed to meaningfully reduce its dependence on the Persian Gulf, but in some sectors — particularly in liquefied natural gas imports — this dependence has deepened. This reality, which is often overlooked in public discourse, raises fundamental questions about the sustainability of Europe’s energy security strategies and their impact on regional power equations.

The Challenge of Hezbollah’s Low-Cost “FPV” Drones for the Zionist Regime

The Challenge of Hezbollah’s Low-Cost “FPV” Drones for the Zionist Regime

2026/05/27

SCFR Online – Opinion: In modern warfare, it has always been assumed that the more expensive, and advanced the weapon—particularly from well-known companies—the more certain the victory will be. However, developments on the northern front of occupied Palestine in recent months have challenged this long-held belief. Here, the Zionist regime’s military, despite possessing the most advanced defense systems such as Iron Dome, David’s Sling, and Arrow, as well as fifth-generation F-35 fighter jets, Merkava tanks, and other modern equipment found in few countries worldwide, has effectively been rendered helpless against Hezbollah Lebanon’s few-hundred-dollar drones. Benjamin Netanyahu’s bitter admission regarding the inability to counter this threat, and his order to allocate an unlimited budget to find a solution, underscores the reality that the era of pure superiority through expensive technologies has come to an end.

The Impact of West Asian Developments on the Ukraine War

The Impact of West Asian Developments on the Ukraine War

2026/05/25

SCFR Online – Note: Vladimir Putin, President of Russia, recently announced—more than four years after the commencement of military aggression against Ukraine—that he believes the conflict between Russia and Ukraine is drawing to a close.

Temporary China–U.S. Trade Truce in the Shadow of Fundamental Distrust

Temporary China–U.S. Trade Truce in the Shadow of Fundamental Distrust

2026/05/23

SCFR Online – Opinion: The recent visit of the President of the United States to China is significant from various aspects; because China is recognized as the world’s second-largest economic power and a growing economy. The Chinese are also advancing in various fields, including the space sector, artificial intelligence, and military industries; to the extent that in the military sector, whereas they previously lacked an aircraft carrier, they now possess their third aircraft carrier. On the other hand, the United States, as a superpower, has always regarded China as its rival and continues to view it as such today.

Loading

Últimas publicaciones

Europe’s Enduring Dependence on Persian Gulf Energy

Europe’s Enduring Dependence on Persian Gulf Energy

2026/28/05

SCFR Online – Opinion: The dominant discourse in the field of European energy security over the past two decades has revolved around diversification of supply sources and the gradual reduction of dependence on fossil fuels. This narrative, which gained particular momentum after the Ukraine gas crisis in 2006 and its intensification in 2014 and 2022, was based on the assumption that Europe could free itself from the geopolitical vulnerabilities arising from dependence on specific suppliers through investment in renewable energy, imports of liquefied natural gas from diversified sources, and the establishment of new infrastructure. However, a closer analysis of energy trade data and the structure of the global oil and gas supply chain presents a different picture. Europe has not only failed to meaningfully reduce its dependence on the Persian Gulf, but in some sectors — particularly in liquefied natural gas imports — this dependence has deepened. This reality, which is often overlooked in public discourse, raises fundamental questions about the sustainability of Europe’s energy security strategies and their impact on regional power equations.

The Challenge of Hezbollah’s Low-Cost “FPV” Drones for the Zionist Regime

The Challenge of Hezbollah’s Low-Cost “FPV” Drones for the Zionist Regime

2026/27/05

SCFR Online – Opinion: In modern warfare, it has always been assumed that the more expensive, and advanced the weapon—particularly from well-known companies—the more certain the victory will be. However, developments on the northern front of occupied Palestine in recent months have challenged this long-held belief. Here, the Zionist regime’s military, despite possessing the most advanced defense systems such as Iron Dome, David’s Sling, and Arrow, as well as fifth-generation F-35 fighter jets, Merkava tanks, and other modern equipment found in few countries worldwide, has effectively been rendered helpless against Hezbollah Lebanon’s few-hundred-dollar drones. Benjamin Netanyahu’s bitter admission regarding the inability to counter this threat, and his order to allocate an unlimited budget to find a solution, underscores the reality that the era of pure superiority through expensive technologies has come to an end.

The Impact of West Asian Developments on the Ukraine War

The Impact of West Asian Developments on the Ukraine War

2026/25/05

SCFR Online – Note: Vladimir Putin, President of Russia, recently announced—more than four years after the commencement of military aggression against Ukraine—that he believes the conflict between Russia and Ukraine is drawing to a close.

Temporary China–U.S. Trade Truce in the Shadow of Fundamental Distrust

Temporary China–U.S. Trade Truce in the Shadow of Fundamental Distrust

2026/23/05

SCFR Online – Opinion: The recent visit of the President of the United States to China is significant from various aspects; because China is recognized as the world’s second-largest economic power and a growing economy. The Chinese are also advancing in various fields, including the space sector, artificial intelligence, and military industries; to the extent that in the military sector, whereas they previously lacked an aircraft carrier, they now possess their third aircraft carrier. On the other hand, the United States, as a superpower, has always regarded China as its rival and continues to view it as such today.

Loading

DERNIER CONTENU

Europe’s Enduring Dependence on Persian Gulf Energy

Europe’s Enduring Dependence on Persian Gulf Energy

2026/28/05

SCFR Online – Opinion: The dominant discourse in the field of European energy security over the past two decades has revolved around diversification of supply sources and the gradual reduction of dependence on fossil fuels. This narrative, which gained particular momentum after the Ukraine gas crisis in 2006 and its intensification in 2014 and 2022, was based on the assumption that Europe could free itself from the geopolitical vulnerabilities arising from dependence on specific suppliers through investment in renewable energy, imports of liquefied natural gas from diversified sources, and the establishment of new infrastructure. However, a closer analysis of energy trade data and the structure of the global oil and gas supply chain presents a different picture. Europe has not only failed to meaningfully reduce its dependence on the Persian Gulf, but in some sectors — particularly in liquefied natural gas imports — this dependence has deepened. This reality, which is often overlooked in public discourse, raises fundamental questions about the sustainability of Europe’s energy security strategies and their impact on regional power equations.

The Challenge of Hezbollah’s Low-Cost “FPV” Drones for the Zionist Regime

The Challenge of Hezbollah’s Low-Cost “FPV” Drones for the Zionist Regime

2026/27/05

SCFR Online – Opinion: In modern warfare, it has always been assumed that the more expensive, and advanced the weapon—particularly from well-known companies—the more certain the victory will be. However, developments on the northern front of occupied Palestine in recent months have challenged this long-held belief. Here, the Zionist regime’s military, despite possessing the most advanced defense systems such as Iron Dome, David’s Sling, and Arrow, as well as fifth-generation F-35 fighter jets, Merkava tanks, and other modern equipment found in few countries worldwide, has effectively been rendered helpless against Hezbollah Lebanon’s few-hundred-dollar drones. Benjamin Netanyahu’s bitter admission regarding the inability to counter this threat, and his order to allocate an unlimited budget to find a solution, underscores the reality that the era of pure superiority through expensive technologies has come to an end.

The Impact of West Asian Developments on the Ukraine War

The Impact of West Asian Developments on the Ukraine War

2026/25/05

SCFR Online – Note: Vladimir Putin, President of Russia, recently announced—more than four years after the commencement of military aggression against Ukraine—that he believes the conflict between Russia and Ukraine is drawing to a close.

Temporary China–U.S. Trade Truce in the Shadow of Fundamental Distrust

Temporary China–U.S. Trade Truce in the Shadow of Fundamental Distrust

2026/23/05

SCFR Online – Opinion: The recent visit of the President of the United States to China is significant from various aspects; because China is recognized as the world’s second-largest economic power and a growing economy. The Chinese are also advancing in various fields, including the space sector, artificial intelligence, and military industries; to the extent that in the military sector, whereas they previously lacked an aircraft carrier, they now possess their third aircraft carrier. On the other hand, the United States, as a superpower, has always regarded China as its rival and continues to view it as such today.

Loading

DERNIER CONTENU

Europe’s Enduring Dependence on Persian Gulf Energy

Europe’s Enduring Dependence on Persian Gulf Energy

2026/28/05

SCFR Online – Opinion: The dominant discourse in the field of European energy security over the past two decades has revolved around diversification of supply sources and the gradual reduction of dependence on fossil fuels. This narrative, which gained particular momentum after the Ukraine gas crisis in 2006 and its intensification in 2014 and 2022, was based on the assumption that Europe could free itself from the geopolitical vulnerabilities arising from dependence on specific suppliers through investment in renewable energy, imports of liquefied natural gas from diversified sources, and the establishment of new infrastructure. However, a closer analysis of energy trade data and the structure of the global oil and gas supply chain presents a different picture. Europe has not only failed to meaningfully reduce its dependence on the Persian Gulf, but in some sectors — particularly in liquefied natural gas imports — this dependence has deepened. This reality, which is often overlooked in public discourse, raises fundamental questions about the sustainability of Europe’s energy security strategies and their impact on regional power equations.

The Challenge of Hezbollah’s Low-Cost “FPV” Drones for the Zionist Regime

The Challenge of Hezbollah’s Low-Cost “FPV” Drones for the Zionist Regime

2026/27/05

SCFR Online – Opinion: In modern warfare, it has always been assumed that the more expensive, and advanced the weapon—particularly from well-known companies—the more certain the victory will be. However, developments on the northern front of occupied Palestine in recent months have challenged this long-held belief. Here, the Zionist regime’s military, despite possessing the most advanced defense systems such as Iron Dome, David’s Sling, and Arrow, as well as fifth-generation F-35 fighter jets, Merkava tanks, and other modern equipment found in few countries worldwide, has effectively been rendered helpless against Hezbollah Lebanon’s few-hundred-dollar drones. Benjamin Netanyahu’s bitter admission regarding the inability to counter this threat, and his order to allocate an unlimited budget to find a solution, underscores the reality that the era of pure superiority through expensive technologies has come to an end.

The Impact of West Asian Developments on the Ukraine War

The Impact of West Asian Developments on the Ukraine War

2026/25/05

SCFR Online – Note: Vladimir Putin, President of Russia, recently announced—more than four years after the commencement of military aggression against Ukraine—that he believes the conflict between Russia and Ukraine is drawing to a close.

Temporary China–U.S. Trade Truce in the Shadow of Fundamental Distrust

Temporary China–U.S. Trade Truce in the Shadow of Fundamental Distrust

2026/23/05

SCFR Online – Opinion: The recent visit of the President of the United States to China is significant from various aspects; because China is recognized as the world’s second-largest economic power and a growing economy. The Chinese are also advancing in various fields, including the space sector, artificial intelligence, and military industries; to the extent that in the military sector, whereas they previously lacked an aircraft carrier, they now possess their third aircraft carrier. On the other hand, the United States, as a superpower, has always regarded China as its rival and continues to view it as such today.

Loading

DERNIER CONTENU

Europe’s Enduring Dependence on Persian Gulf Energy

Europe’s Enduring Dependence on Persian Gulf Energy

2026/28/05

SCFR Online – Opinion: The dominant discourse in the field of European energy security over the past two decades has revolved around diversification of supply sources and the gradual reduction of dependence on fossil fuels. This narrative, which gained particular momentum after the Ukraine gas crisis in 2006 and its intensification in 2014 and 2022, was based on the assumption that Europe could free itself from the geopolitical vulnerabilities arising from dependence on specific suppliers through investment in renewable energy, imports of liquefied natural gas from diversified sources, and the establishment of new infrastructure. However, a closer analysis of energy trade data and the structure of the global oil and gas supply chain presents a different picture. Europe has not only failed to meaningfully reduce its dependence on the Persian Gulf, but in some sectors — particularly in liquefied natural gas imports — this dependence has deepened. This reality, which is often overlooked in public discourse, raises fundamental questions about the sustainability of Europe’s energy security strategies and their impact on regional power equations.

The Challenge of Hezbollah’s Low-Cost “FPV” Drones for the Zionist Regime

The Challenge of Hezbollah’s Low-Cost “FPV” Drones for the Zionist Regime

2026/27/05

SCFR Online – Opinion: In modern warfare, it has always been assumed that the more expensive, and advanced the weapon—particularly from well-known companies—the more certain the victory will be. However, developments on the northern front of occupied Palestine in recent months have challenged this long-held belief. Here, the Zionist regime’s military, despite possessing the most advanced defense systems such as Iron Dome, David’s Sling, and Arrow, as well as fifth-generation F-35 fighter jets, Merkava tanks, and other modern equipment found in few countries worldwide, has effectively been rendered helpless against Hezbollah Lebanon’s few-hundred-dollar drones. Benjamin Netanyahu’s bitter admission regarding the inability to counter this threat, and his order to allocate an unlimited budget to find a solution, underscores the reality that the era of pure superiority through expensive technologies has come to an end.

The Impact of West Asian Developments on the Ukraine War

The Impact of West Asian Developments on the Ukraine War

2026/25/05

SCFR Online – Note: Vladimir Putin, President of Russia, recently announced—more than four years after the commencement of military aggression against Ukraine—that he believes the conflict between Russia and Ukraine is drawing to a close.

Temporary China–U.S. Trade Truce in the Shadow of Fundamental Distrust

Temporary China–U.S. Trade Truce in the Shadow of Fundamental Distrust

2026/23/05

SCFR Online – Opinion: The recent visit of the President of the United States to China is significant from various aspects; because China is recognized as the world’s second-largest economic power and a growing economy. The Chinese are also advancing in various fields, including the space sector, artificial intelligence, and military industries; to the extent that in the military sector, whereas they previously lacked an aircraft carrier, they now possess their third aircraft carrier. On the other hand, the United States, as a superpower, has always regarded China as its rival and continues to view it as such today.

Loading