STRATEGIC TARIFF & ECONOMIC LEVERAGE US – CHINA TRADE PHASE
AUTHOR – SRIHARI.S, LLM STUDENT AT AMITY SCHOOL OF LAW NOIDA
BEST CITATION – SRIHARI.S, STRATEGIC TARIFF & ECONOMIC LEVERAGE US – CHINA TRADE PHASE, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (14) OF 2025, PG. 13-23, APIS – 3920 – 0001 & ISSN – 2583-2344. DOI – https://doi.org/10.65393/UDHC4607
ABSTRACT
The ongoing trade confrontation between the United States and China has redefined the global economic order, signaling a transition from traditional protectionism to a new era of strategic economic statecraft. This research critically examines how the use of tariffs has evolved into a mechanism of geopolitical leverage, shaping trade diplomacy, technological competition, and international economic governance. By analyzing policy measures introduced since 2018, the study explores whether such tariffs have fulfilled their intended goals of correcting trade imbalances or have instead generated systemic[1] instability within global markets. Through the lens of neomercantilist and realist economic theories, the paper investigates how both nations have weaponized interdependence, influencing global supply chains and multilateral institutions such as the World Trade Organization.
The findings reveal that while strategic tariffs may offer short-term negotiation advantages, they often undermine long-term economic resilience and mutual interdependence, leading to supply chain fragmentation and institutional distrust. The research concludes that the U.S.–China trade relationship now stands at a critical crossroads—where economic competition must evolve into cooperative regulation to preserve global stability. Ultimately, this paper contributes to the understanding of how economic instruments, when used strategically, can both empower and endanger the global trade system.
Keywords: Strategic Tariffs, Economic Leverage, U.S.–China Trade War, Global Supply Chains, Economic Statecraft, WTO, Geoeconomics
[1] David A. Baldwin, Economic Statecraft(Princeton University Press, 1985), at 42–45 (discussing how nations employ economic instruments, including tariffs and sanctions, as tools of political influence rather than mere trade regulation).