U.S. faces growing calls to ease trade tensions with China

The U.S. is facing growing calls from economists and media pundits to mend trade ties with China, as the two countries move into a phase of stabilized economic engagement.

U.S. President Donald Trump imposed exceptionally high tariffs on Chinese imports in April, prompting China to respond with its own retaliatory tariffs. The two countries then suspended most of the tariffs as they agreed to begin talks on trade. While no formal agreements have been finalized, both Beijing and Washington have taken steps displaying signs of de‑escalation.

This recalibration is taking place against the backdrop of the consensus reached by their recent negotiations in Geneva and London. In the meantime, Calls to reverse tariffs and restrictive trade measures have gained traction among economists. 

Adam S. Posen, president of the Peterson Institute for International Economics, has repeatedly argued that tariffs are economically damaging and strategically ineffective. In testimony before Congress, he said tariffs are a "bad form of tax" that lead to "costs, chaos, [and] corruption." He warned that tariffs introduce uncertainty for businesses and consumers and contribute to supply chain disruptions.

In an article published on Foreign Affairs in April, Posen has also challenged the rationale behind the Trump administration's approach to China, arguing that the assumption the U.S. holds "escalation dominance" over China is misguided.

He wrote that China's position as a surplus country gives it more leverage in a trade dispute, while the U.S. risks economic harm by cutting off access to imports it cannot easily replace. "It is wildly reckless to cut off trade before securing reliable alternatives," he cautioned.

Bill O'Reilly, a former Fox News host, has urged cooperation. "We absolutely can work with the Chinese to make the world safer and more affluent – helping every decent person on earth," he wrote in a column.

Industry experts have also criticized the U.S. imposition of export controls on ethane shipments to China, a measure they say would hurt U.S. energy companies while having limited impact on China's petrochemical sector.

Philip Luck, director of the Economics Program at the Center for Strategic and International Studies (CSIS), wrote that such policies "inflict measurable harm on U.S. energy companies in service of imaginary national security benefits." He argued that the export controls were a case of "poor analysis, inadequate preparation, arbitrary implementation, and stubborn persistence in the face of obvious failure."

Luck noted that the ethane controls did little to disrupt China's petrochemical output because the country could shift easily to alternative feedstocks, while U.S. producers faced excess inventory, falling prices, and mounting losses. He warned that measures like these "undermine the broader reputation of American institutions for competence and predictability."

Enterprise Products Partners, a U.S.-based ethane trader, said on Wednesday the U.S. had lifted a previously imposed licensing restriction, allowing the company to resume ethane shipments to China.