[Source/Author: Guancha Observer Columnist Shaoshan Bao, Translation by Whale Life]

April 2, 2025, the Trump administration unilaterally imposed tariffs on almost all goods from U.S. trade partners. This was not surprising — after all, in Trump's lexicon, "tariffs" were his favorite word. The "Liberation Day" announcement somewhat continued the policy legacy of his first term. However, days later, Trump announced a 90-day deferral of tariffs for all trading partners except China.

This exception clause triggered a chain reaction, leading to tit-for-tat tariff retaliations between China and the U.S. Eventually, U.S. tariffs on Chinese imports rose to 145%, while China increased its tariffs on U.S. goods to 125%. Bilateral trade has effectively come to a standstill.

Although Trump's move aimed to pressure China and attract other trading partners to engage in bilateral trade negotiations with the U.S., the actual effect was quite different. The U.S. fundamentally misjudged the international strategic environment: its critical error changed the game landscape, ultimately harming its own interests and unintentionally promoting further disengagement from U.S.-dominated international coordination.

Therefore, the subsequent developments — the U.S. side actively reaching out through multiple channels to negotiate tariffs with China, the joint statement issued by Geneva economic and trade talks on May 12, committing to cancel 91% of tariffs and suspend 24% of tariffs — can be seen as expected and reasonable.

From Hegemony to Decentralization

The Trump administration's strategy was based on an implicit assumption: the U.S. remains an indispensable core hub in the global economic system. Trump highly praised the attractiveness of American consumers to global businesses, and his staff repeatedly emphasized that "the U.S. market is a honey pot no one can resist." In game theory terms, the U.S. viewed itself as a dominant node in a star network, believing that its market size and historical negotiation leverage could control the outcome of bilateral negotiations.

However, this assumption is seriously out of sync with the reality of interdependence in trade — this is the first strategic misjudgment.

In 2025, the global economy presents a multipolar pattern, forming multiple trade power centers distributed globally: China, the EU, ASEAN, and the Gulf Cooperation Council, among others. More importantly, these centers have formed increasingly tight interconnected networks through formal trade agreements and shared infrastructure. The "hub-and-spoke" mindset that the U.S. was accustomed to in its negotiating stance has long been replaced by a more decentralized new pattern.

On April 9 local time, just hours after the so-called "reciprocal tariff" took effect, Trump announced a 90-day deferral of taxes for most countries and regions, retaining a basic tariff of 10% during the period. Video screenshot

This policy gave countries strong motivation to do the following:

1. On the one hand, respond symbolically to the U.S. to avoid direct punishment — making responsive gestures without any real loss;

2. On the other hand, delay substantive commitments, maintaining strategic flexibility while putting pressure on the Trump administration, which urgently seeks "achievable victories or agreements" for voters. Countries can make symbolic commitments, ensuring they do not harm or prohibit their continued non-U.S.-related trade activities (this is the second misjudgment);

3. Meanwhile, coordinate to build an alternative trade system as a short-term response;

4. Finally, strengthen cooperation with China, the largest trading partner of over 140 countries worldwide.

This ultimately led to a multipolar coordination game scenario. Under this framework, America's dominant position has undergone decentralization. The Trump administration failed to realize that other players already had reliable alternatives — including existing or rapidly deepening trade relationships with China, ASEAN, the EU, etc.

Game theory tells us that when participants have reliable external options, their dependence on any single dominant player decreases — this is precisely the essence of diversification strategy, and the world economy has long escaped dependence on the U.S. as the central economic hub through diversification strategies.

Ironically, the weakening of U.S. negotiation strength did not result from insufficient dominance but precisely because it stubbornly adhered to extreme policies despite losing its economic center status. Of course, there are exceptions, such as Canada and Mexico, whose trade with the U.S. exceeds normal GDP ratios, or traditional U.S. geopolitical allies like the UK.

The Strategic Cost of the 90-Day Grace Period

For the U.S., the Trump administration's gravest mistake may have been the 90-day exemption policy excluding China. This strategic wedge intended to isolate China inadvertently reshaped the game landscape, benefiting all other participants and further weakening America's position. The decision transformed high-pressure negotiation games into delayed and coordinated scenarios. As a result, the optimal strategy for most countries became to wait and observe, coordinating covertly.

While the U.S. remained entrenched in a negotiation-style game mentality, other countries adjusted their strategies, now operating within a coordination game framework where all parties have autonomous decision-making authority.

In repeated game theory, when faced with uncertain benefits, delaying action is often the optimal choice — especially when the cost of waiting is believed to be lower than the potential costs of hasty actions.

The Trump administration's 90-day buffer eliminated urgency, allowing countries to bide their time and creating strategic maneuvering space for bilateral trade partners — enabling them to feign cooperation with the U.S. while advancing other strategies. As expected, many countries negotiated with the U.S. while choosing to restart cooperation with China or take joint actions to mitigate the impact of U.S. policies.

Such cases abound: Recently, Japan and Hungary resisted Washington's pressure and refused to decouple from China. This is particularly rare for Japan, which has long been geopolitically constrained by the U.S. Few will forget how Japan fully compromised in the "Plaza Accord." Hungary's stance is equally intriguing: Prime Minister Viktor Orban at least resonates politically with Trump and shares a strong philosophical understanding with him. However, Hungary is unwilling to sacrifice its economic interests under U.S. pressure.

Japanese Prime Minister Shinzo Abe stated on a television program on May 11 that high automobile tariffs would raise the price of cars for American consumers. "Isn't it time to reduce these tariffs?" he asked. Image source: foreign media

The EU restarted economic dialogue with China and postponed retaliatory tariffs on U.S. goods; the UK signed a free trade agreement with India, demonstrating the determination of both sides to build a non-U.S. trade system; ASEAN launched internal coordination mechanisms and deepened cooperation with China and Gulf countries; trilateral free trade negotiations between China, Japan, and South Korea were restarted after years of stagnation; at the meeting of finance ministers and central bank governors of ASEAN plus three (ASEAN+3), participants reaffirmed their commitment to maintaining open and multilateral trade, promising coordinated actions to counteract macroeconomic risks brought about by Trump's tariffs.

Trump's measures did not isolate China but inadvertently triggered a counterbalancing coordination game — countries sought to resist U.S. pressure and build alternative systems. Including Treasury Secretary Scott Beasant, Trump's staff seemed to overlook a key fact: despite the large scale of the U.S.-China bilateral trade surplus, it accounts for less than 2% of China's GDP. Even considering current household savings rates, this figure is equivalent to only the natural growth of consumer spending in China for one year. Even without relying on investment-driven growth from fiscal stimulus or monetary easing, or the natural development of trade with other regions globally, China still has sufficient room to absorb shocks and weather the standoff period.

China's Core Role in Strategic Response

The key lies in the Trump administration's underestimation of China's resolve and strategic foresight. Instead of succumbing to pressure, China swiftly implemented countermeasures (indicating early anticipation and contingency plans), executed precise reciprocal retaliation, and clearly expressed willingness to bear short-term economic losses to defend decision-making sovereignty. This signal was crucial as it could reshape expectations and alter the benefit structure of the game.

If China had chosen to compromise, the credibility of resisting U.S. pressure would have collapsed entirely for other countries. China's firm response provided a "shield" for resistance by other countries, establishing itself as a reliable anchor point against retaliation. This made other countries more confident in hedging against U.S. risks, and in many cases, they even moved closer to China.

Beijing's reciprocal countermeasure strategy dragged the U.S. into a zero-sum game that was difficult to win quickly. Even if Washington deployed all its tariff weapons, it could not force China to comply. This was not only a failure at the bilateral level but also sent a clear message to the world: the U.S. has lost the ability to compel other countries to submit. This directly promoted the willingness and opportunities for Asian, European, and Global South countries to accelerate the formation of cooperative alliances.

The Formation of Post-American Order

The 2025 trade crisis has evolved from a simple Sino-U.S. zero-sum game into a composite game involving multiple coordination and negotiations. Under this framework, the benefits for each country are not only determined by its own actions but also constrained by the choices of all other participants.

Trump's 90-day grace period prompted countries to adopt hedging strategies: deepening cooperation with China and multilateral trade groups while engaging in non-committal contacts with the U.S. became a rational choice.

Trump's strategic gamble brought about a series of unexpected consequences and dynamics, strengthening multilateral coordination mechanisms and weakening America's unilateral advantage. Countries generally adopted strategic delays — by delaying commitments to the U.S., they could gather more information and observe others' reactions. As communication intensified, coordinated actions clearly had greater advantages than unilateral compromises. This gave rise to the formation of a counterbalancing coordination alliance — when traditional leaders push unilateral actions, other countries have a strong incentive to unite and counterbalance that leader. This is a classic case of alliance formation in cooperative game theory.

America's policy credibility also showed cracks: tariff measures were suspended almost immediately after implementation, greatly reducing their threat effectiveness and prompting countries to seek alternative paths.

As of mid-May 2025 (halfway through the 90-day grace period), although Trump claimed there were "70 countries actively approaching" (an unverified claim), it is certain that most countries chose to observe, knowing that China would not make concessions first and that the U.S. could not indefinitely withstand internal economic pressure.

In the future, a few countries may sign bilateral agreements with the U.S., but regardless of the number of participating countries or the scale of trade, they are expected to remain secondary. The White House has received warnings from domestic retailers about "shortages in July," which not only shook Washington's political circles but also drew high attention from capitals around the world, including Beijing.

After Trump introduced the so-called "reciprocal tariff" policy, imports from China at the Port of Los Angeles were halved. Video screenshot

The 2025 tariff chaos once again revealed the new pattern of today's international political economy: the economic center and power distribution are becoming increasingly decentralized. The once-global trade absolute center is now just an ordinary participant — although its economic volume is massive, its unilateral authority has lost the real foundation of support. The Trump administration misjudged America's central position, and its behavior actually promoted coordination and cooperation among countries, accelerating the formation of a post-American trade governance system.

In this environment, China consistently adheres to the principle of reciprocal countermeasures (never proactively escalating conflicts), which has instead strengthened its credit and strategic position. Trump's 90-day exemption policy intended to serve as a pressure lever but backfired by providing countries with time and cover to build collective alternatives.

Unintended Consequences

Trump's punitive unilateral tariff policy in 2025 did not reshape a favorable global trade order for the U.S. Its self-proclaimed "Liberation Day" inadvertently outlined the true picture of today's world: the U.S. is no longer the central role on the international political and economic stage.叠加 its strategic misjudgments (especially the 90-day grace period), the tactical dynamics after policy implementation actually incentivized countries to adopt strategies of delay, hedging, and multilateral coordination. These negotiation strategies did not consolidate U.S. hegemony but exposed the decline of its dominant position.

The best interpretive framework for the current situation is: strategic patience, alliance building, and power dispersion have become common features. When the U.S. hurriedly sought to restart contact with China in Switzerland, it was not due to strength but out of practical necessity. Other countries around the world continued to adapt to the multipolar reality — they knew that no single player could unilaterally set rules, and strategic coordination was not only feasible but increasingly becoming the preferred option.

This article is an exclusive piece from the Guancha Observer, and the content purely reflects the author's personal views, which do not necessarily represent the platform's views. Unauthorized reproduction is prohibited, and legal responsibility will be pursued. Follow the WeChat account guanchacn for daily interesting articles.

Original Source: https://www.toutiao.com/article/7504079579569472015/

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