Read part I here and part II here
Trump has not succeeded in checking China
Trump’s policy since his first term, in 2017 (which Biden continued and escalated in his own term, 2021-2024), has as its main target Chinese businesses and the Chinese economy. Let’s see what he has achieved.
- Reducing China’s large trade surplus (the difference in the value of exports and imports) with the rest of the planet is a central goal of American policy. At the end of 2024, China’s trade surplus had approached 1 trillion dollars (to be exact $992 billion), a historical record, and this increased the concern of the West. At the end of 2025, after Trump’s new aggressive actions, the trade surplus not only did not decrease, but increased to $1.2 trillion (to be precise, $1.19 trillion) – a new historical record. For comparison, at the end of 2017, China’s trade surplus was $422.5 billion (2.87 trillion yuan).
- Economic growth of Chinese GDP was around 5% for 2025 and is estimated (by Western international bodies) at between 4.2% and 4.5% for 2026. It is almost 3 times higher than the growth of the USA and 4 times higher than that of the EU.
- For 2026, it is predicted (based on estimates by the International Monetary Fund – IMF) that global GDP will increase by 3.1%. China will contribute 26.6% to this increase, India 17% (the two together 43.6%), the US 9.9% and Europe (EU with Britain) 9.5%. In other words, the West’s tendency to lose ground in relation to both China and India, doesn’t seem to be arrested.
- On the question of whether the US (and European) trade war against China has managed to cut it off from technological development, let’s listen to the words of those who (do indeed) know better. The CEO of Google Deep Mind (which has developed Gemini, which according to many is the best Artificial Intelligence tool today), and Nobel laureate Demis Hassabis, recently stated that Chinese artificial intelligence models are closer to the capabilities of the US and the West “than we might have thought a year or two ago. Maybe right now they are only a few months away.” Along the same lines, Nvidia CEO (the company with the largest market capitalization on the planet, valued at this moment at $4.6 trillion) Jensen Huang made statements such as: “as I have been saying for a long time, China is nanoseconds behind the US in Artificial Intelligence”, “we are very, very close… China is right behind us…” and “China will beat the US in the AI race”.
- If we look at the overall picture of the US-China confrontation, it is probably best summarized by the headlines in two of the most important capitalist media outlets in the US. “China at the epicenter, amid American chaos”, wrote Bloomberg on January 15, while the New York Times on January 31, wrote: “US allies reach out to China, but on Beijing’s terms”.
In conclusion, looking at the US policy towards China… you can’t really call it a success.
All of the above, of course, do not negate the serious contradictions and problems inherent in the Chinese economy, which despite the very strong intervention of the state, operates on the basis of the capitalist market.
Nor does it negate the fact that Trump’s trade war, although much milder than the war cries with which he started off in early 2025, has a negative effect on all capitalist countries and will certainly affect China as well, contributing to the reduction of its growth rates. But these are different issues, another, important, discussion, which we cannot deal with here.
… nor did America “take off”
The economy is the key. If we consider, as a working hypothesis, that Trump manages to achieve his goals, this will be mainly due to the economy. If it (the economy) goes well, and provides some crumbs for working-class and poor households in the US while the billionaires are becoming trillionaires, then he will have consolidated his position for a while. And the European and NATO “allies” of the US, who behind the scenes are currently cursing Trump and his administration will swallow the pill and the insults and adapt to the new reality.
Trump, of course, presents whatever happens as a success and as his own victory. As he constantly repeats, to ridicule, “Trump is always right.” However, the facts and figures of the US economy tell a different story.
- At the base of the American economy is a time bomb namely the budget deficit (deficit in the annual federal budget) and national debt (consisting of the total accumulation of all deficits from the past). Trump’s policies are far from providing any solution to these problems.
- Over the past decade, the annual budget deficit has risen from $585 billion in 2016 to about $1.8 trillion by the end of 2025 (more than tripling in absolute terms). As a percentage of GDP, it has doubled, from ~3.1% in 2016 to ~6%. The IMF and other international financial institutions believe that for the economy to be stable, the deficit should not exceed 3%.
- Public debt has doubled in a decade – from $19.5 trillion in 2016 to $38.5 trillion today. This represents over 124% of GDP. For comparison, in the decades from 1940 to 2024 the average public debt was 66.38%. What international capitalist organizations consider necessary (for economic stability) is that it does not exceed 60% of GDP.
- The servicing of the American public debt has reached the unprecedented level of 1 trillion dollars per year. This corresponds to approximately 15% of budget expenditure, is on par with spending on health (15%) and exceeds spending on “defense” (13%).
- With an inflation target of 2%, the initial forecast was for 2.1% for 2025. Estimates now are that it will probably fluctuate around 2.7%, while for 2026 an increase to 3% is predicted. As a result, the US Federal Reserve appears reluctant to lower interest rates further (despite Trump’s protests). High interest rates keep public debt servicing costs higher, and keep both the deficit and debt at higher levels.
- In early 2025, the OECD forecast annual growth for the US at 2.4%. It now estimates that the economy grew (in 2025) by only 2%. And it estimates that for 2026 it will grow by 1.7%. Rates that are far from the miracles promised by Trump.
- The US has been running a trade deficit with the rest of the world since the 1970s. The tariffs imposed by Trump on imports from third countries are supposed to reduce (and even reverse) the deficit. Instead, we had an increase in the deficit in the balance of trade with foreign countries from approximately $903 billion in 2024 to $936 billion by November 2025.
No matter what Trump says, the news from the American economy is anything but good.
The above data does not seek to provide a comprehensive assessment of the American economy. They provide a picture of the problems that Trump’s policies cannot in any way solve.
The central emphasis of Trump’s policies was and is on the imposition of tariffs from which he would supposedly collect huge funds, with which he would solve many of the problems of the economy and give it a huge boost.
He declared that by imposing tariffs he would bring back to the United States industries that left the country a long time ago, creating many well-paid jobs. Nothing of the kind has happened. On the contrary, there are job losses. As Bloomberg reports for January just passed:
“US companies announced the largest number of job cuts for any January since the depths of the Great Recession in 2009… Companies last month announced 108,435 job cuts, a 118% increase from a year earlier.”
There is an increase in customs revenue that is estimated to reach $200 billion by 2025, but this will not solve any of the aforementioned problems because Trump plans to use these amounts to make tax breaks (which always benefit the rich). At the same time tariffs push up inflation which hits working class people.
With deficits and bubbles, the economy cannot go far
The growth of the American economy in the present time is based to a large extent on two factors. First, the large budget deficits that were mentioned above and second, the Artificial Intelligence bubble in which hundreds of billions of dollars are being invested.
The problem with deficits (and high) debt is that at some point they cause a sharp landing (recession) of the economy. The problem with bubbles is that at some point they burst.
To reduce debt and deficits smoothly in a capitalist economy, it is necessary (a necessary but not sufficient condition) to have very high GDP growth rates. America does not have high growth rates, so the only way to reduce deficits is through austerity policies. Trump has no intention of doing this (unless this if forced upon him at a later stage) because it is tantamount to political suicide.
The contradictions of the US economy lead in one way or another to recession. What cannot be determined is the timing and depth of that recession. And it is very likely that Trump will pay the price. But that does not mean that Trumpism – a truly dangerous phenomenon – will end.
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Part 4 will follow in the coming days.
