The Pie: An Economics Podcast Tariffs, Trust, and the Twilight of Norms: U.S.–China Relations in the Trump Era
Apr 29, 2025
In this engaging conversation, economist Chang-Tai Hsieh from the University of Chicago explores the breakdown of trust in U.S.-China economic norms during the Trump administration. He discusses the struggles of China's post-COVID recovery and how U.S. tariffs have unexpectedly lessened their impact. Hsieh even suggests that Canada might face economic aggression instead of China. The dialogue highlights the implications of political rhetoric on economic relationships, raising concerns about global stability in an increasingly transactional world.
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China's Economic Malaise Explained
- China's economic malaise is driven by political crackdowns and public distrust after harsh COVID controls.
- Entrepreneurs doubt the Communist Party's competence and fairness, slowing investment and innovation.
Limited Impact of Trump Tariffs on China
- Trump's tariffs on China had less impact than anticipated because China prepared for them years ago.
- Most of China's economic problems are homegrown, not primarily caused by U.S. tariffs.
China’s Export Strategy Amid Tariffs
- China floods global markets with low-cost EVs and goods to offset U.S. restrictions.
- This benefits many countries but hurts those with domestic industries competing against cheap Chinese imports.
