The US-China trade relationship has been fraught with tension since the trade war ignited in 2018, leading to mutual economic slowdowns and persistent trade deficits. Washington’s caution stems from a blend of national security concerns, economic vulnerabilities, and ideological differences. Here’s a breakdown of the key reasons:
National Security Risks and Strategic Vulnerabilities
At the heart of US hesitancy is the fear that over-reliance on China poses direct threats to national security. For instance, the US is heavily dependent on Chinese imports for critical minerals and battery supply chains, which could leave the country vulnerable in times of conflict or disruption. Experts argue that limiting China’s economic growth is essential for US security, as Beijing’s unfair trade practices—like subsidies and forced technology transfers—threaten high-wage jobs and advanced manufacturing in America. The Chinese Communist Party’s potential to interdict strategic trade further amplifies supply chain risks.
Geopolitically, the trade imbalance is seen as undermining US manufacturing bases and critical supply chains, potentially eroding military and technological edges. Rising nationalism in both countries has fueled this caution, with the COVID-19 era exacerbating conflicts over origins and responses.
Economic Dependency and Trade Imbalances
Economically, the US worries about its massive trade deficit with China, which hollows out domestic industries. In 2024, the deficit reached $295.5 billion, a 5.7% increase from 2023. Critics point to China’s practices, such as intellectual property theft and currency manipulation, as creating unfair advantages. Retaliatory risks from China could impair US industries still reliant on Chinese components.
Human rights issues, including labor practices in Xinjiang and Hong Kong, also factor in, clashing with American values and prompting calls for reduced engagement. Overall, the US views deepened trade ties as a double-edged sword—boosting short-term growth but risking long-term strategic disadvantages.
Broader Geopolitical and Ideological Angles
From a global perspective, the trade war has reshaped alliances, with the US pushing for “derisking” to diversify away from China. This caution extends to tech sectors, where concerns over data security and espionage loom large. As one analyst notes, national security always trumps economic policies in US-China dealings.
A Comparative Look
While the US is undeniably reliant on China—importing $438 billion in goods and services in 2024, making it China’s largest export destination—the answer is no; America is not the most dependent nation. Dependency is measured by trade share as a percentage of GDP, import/export ratios, and supply chain integration. Here’s how the US stacks up:
Global Dependency Rankings
Around 70% of world economies trade more with China than with the US, and over half trade twice as much with Beijing. Countries like Taiwan (trade volume: $293 billion), South Korea ($328 billion), and Japan ($308 billion) are far more intertwined, with China accounting for a larger portion of their total trade. Neighbors such as Australia and Vietnam also show higher dependency due to mineral exports and manufacturing hubs.
In contrast, China’s share of US imports dropped from 22% in 2017 to 13.8% in 2024, thanks to tariffs and diversification efforts. The US relies on China for about 17.9% of its imports, but exports to China represent only 8.6% of total US exports. Smaller economies in Asia and Africa, like those in ASEAN, exhibit greater vulnerability, with China dominating their export markets.
US-Specific Vulnerabilities
Despite not being the most dependent, the US faces risks in sectors like electronics and pharmaceuticals. China remains crucial for US exports too, absorbing $143 billion in 2024. However, experts argue China’s economy is more reliant on US markets, as a reduction in American imports could implode Beijing’s export-driven model.
CountryTotal Trade with China (2024, $B)Dependency Level (as % of Total Trade)United States582Medium (13-18% imports)South Korea328High (25-30%)Japan308High (20-25%)Taiwan293Very High (30-40%)ASEAN Bloc~1,000+Very High (varies by nation)
US Trade Volumes with Key Countries and the Ripple Effects of Tariffs
The US maintains robust trade ties globally, but tariffs—especially those targeting China—have reshaped volumes and costs. In 2024, total US goods trade reached trillions, with a narrowing deficit of $60.2 billion in June 2025.
Trade Partners and Volumes
China: Exports: $143 billion; Imports: $439 billion; Total: $582 billion (deficit: $296 billion).
Mexico: Largest partner, with imports at 13.8% of US total (surpassing China).
Canada: Balanced trade, focusing on energy and autos.
EU: Exports could drop 8-66% under new tariffs if no deals are reached.
Japan/South Korea: Tech and autos dominate, less affected by China-specific tariffs.
Monthly data shows fluctuations: In May 2025, US exported $6.55 billion to China but imported $20.5 billion.
How Tariffs Are Affecting Trade
Tariffs imposed since 2018, escalating in 2025, have raised $2.7-2.9 trillion in projected revenue over 2026-2035 but with negative dynamic effects like higher consumer prices. US tariffs on China averaged 27% by April 2025—the highest in a century—reducing China’s import share but not overall foreign reliance.
Impacts include supply chain shifts to Vietnam and Mexico, but retaliation has hurt US exporters (e.g., agriculture). The recent 90-day suspension offers breathing room, potentially stabilizing volumes, but long-term effects depend on negotiations.
Global Trade Shifts
The Stockholm joint statement, extending tariff suspensions, reflects mutual recognition of economic interdependence. China will also suspend non-tariff measures, paving the way for further talks. As global trade evolves, the US’s caution underscores a push for resilience, but complete decoupling remains unlikely given intertwined economies. Businesses and policymakers must navigate these dynamics to mitigate risks and capitalize on opportunities in 2025 and beyond.
