Image Credit: CNN

Despite years of tension, the U.S. and China have long agreed that cooperation is better than confrontation. However, that fragile partnership is now on the brink of collapse, with significant real-world consequences already unfolding.

Recent developments show that neither side is eager to sit down for negotiations. China has indicated it would be open to talks, but only if they're grounded in “respect,” “consistency,” and “reciprocity” from the Trump administration. But as one might expect, the likelihood of progress seems slim.

Without a shift in approach, U.S.-China trade is predicted to drop by over 80%, a situation that could effectively lead to a decoupling of the two economies. The World Trade Organization has warned of this, predicting that global trade will shrink by 0.2% this year, compared to an earlier forecast of 2.7% growth.

This gloomy outlook sent U.S. stocks plummeting, with Nvidia’s ban in China, the WTO’s grim forecast, and comments from Federal Reserve Chair Jerome Powell warning of the dangers of a trade war all contributing to the downturn. Powell described the scenario as “unprecedented,” where tariffs could lead to slower economic growth, higher unemployment, and rising inflation—all at once.

Despite the long-standing trade issues, President Trump may not be seeking a deal with China. Some experts, like Ed Yardeni, suggest that the U.S. might be shifting its strategy, potentially aiming to undermine China's economy rather than negotiate. According to reports, the Trump administration is preparing to pressure other nations to limit trade with China, possibly even imposing tariffs on countries with close ties to China.

While the U.S. might be aiming to use its economic power as leverage, Yardeni points out that it’s tough to force China into submission. Unlike the U.S., China’s authoritarian control over its economy gives it a stronger ability to withstand trade pressures.

What’s more concerning for the U.S. is that China has learned from the previous trade war. Beyond simple retaliation, Beijing has started to use its economic influence in new ways—such as halting Boeing deliveries and limiting rare-earth exports. China is also careful to maintain a diplomatic façade, positioning itself as a reasonable player on the global stage while using its expanded economic tools to counter U.S. aggression.

Paraphrasing text from " CNN"all rights reserved by the original author