US-China Trade – A Zero Sum Game?

By Joel Wong

The zero-sum framing has intensified during trade tensions that began in 2018 and has continued under both the Trump and Biden administrations, reflecting a broader shift in US-China relations toward strategic competition.

The U.S. often approaches trade with China as a zero-sum game—where one side’s gain is seen as the other’s loss—due to several strategic, economic, and political concerns:

Trade Deficits and Economic Nationalism: A persistent U.S. trade deficit with China is perceived as a sign that China is “winning” economically at America’s expense. This fuels the narrative that U.S. jobs and manufacturing capacity are being outsourced or undercut, especially in politically sensitive industries like steel, electronics, and textiles.
Industrial Policy and Technology Theft: The U.S. believes that China uses unfair trade practices, such as forced technology transfers, IP theft, and state subsidies to national champions. These practices are viewed not as mutual economic development but as China advancing at the direct cost of U.S. industries.
Geopolitical Competition: As China rises, it challenges U.S. dominance in global institutions and strategic influence. U.S. policymakers increasingly view economic engagement as part of a broader strategic rivalry, especially in high-tech sectors (like semiconductors and AI), where superiority has military and security implications.
Decoupling and National Security: Trade in sensitive goods is now intertwined with national security concerns. Supply chain dependence on China—especially after COVID-19—has been framed as a vulnerability, prompting calls for reshoring industries and restricting Chinese access to critical technologies.
Political Messaging: Domestically, treating trade as a zero-sum game appeals to voters who feel left behind by globalization. Leaders often frame tough-on-China policies as defending American workers, even if the economic logic of mutual gain from trade suggests more complexity.

However, many economists argue that trade is generally positive-sum, with both countries benefiting from comparative advantages, lower consumer prices, and expanded markets. The relationship is more complex than just a simple win-lose proposition!