In his book The Rise and Fall of the Neoliberal Order published in 2022, Gary Gerstle described that the idea of the neoliberal order being founded upon the idea of free trade, deregulation, and globalization would result in an era of unforeseen economic prosperity, global peace, and democracy across the world because of economic interdependence and the increasing ability to share information. While it is still debatable whether the “Neoliberal Order” that Gerstle defines has truly begun to fail,as he admits in the book, one undeniable idea is that the public opinion regarding supporting what the order had to offer is waning, and waning fast in its core territories. Donald Trump’s victory in the 2016 election was partially based on a distrust and anger towards China and its perceived role in the decrease of manufacturing jobs in the United States and the decline of many businesses through the use of international trade tactics. It may be a hyperbole to say that China is “raping” the US through its manufacturing and international economic policies and how it is “the greatest theft in the history of the world,” but the sentiments and circumstances it is based on certainly are not hyperbole nor is it uncommon and currently is a major reason why many states seek to strategically “decouple” from the global trading system or use tools of trade to gain national benefits.

Germany, one of the premier economies of Europe that arose in the early 21st Century after its reunification in 1990, and a major economic partner with China, similarly faced increasing questions regarding its economic reliance on both goods produced in China and the Chinese market for foreign imports ranging from automotive to engineering sectors. This became an increasing concern when China announced its “Zero-COVID Policy,” which devastated international economies as factories of multinational corporations in China shut down in order, implementing the policy of quarantine and testing to reduce COVID. When the Russo-Ukrainian War ignited into a hot war in 2022 by a Russian invasion, a major question facing Germany was regarding the importing of natural gas and other energy from Russia, which led to a massive effort to diversify inputs and increase domestic energy generation via coal plants and nuclear power plants.

When the peak of the COVID pandemic largely subsided in 2023, and economies recovered from the shock, Western corporations faced another shock in China as Xi Jinping placed pressures on foreign corporations in the name of national security – police raids, espionage charges, fines, arrests, expanding state oversight over foreign corporations, and tightening foreign corporations’ access to information – to the fear of corporations seeking to remain in or return to China that has made many question long-term commitments in the country; this occurring alongside an increased shift by the Chinese Communist Party (CCP) to a domestic-focused economic strategy. While China still participates in the international economy, it is no longer purely focused on growing national power on the international stage through economic strength but to actively use its economy and central position as a manufacturing hub for both daily goods and vital components, which it can use as leverage in international affairs, particularly in the weapons-building department due to its dominance in the rare earths market.

This change has not gone unnoticed, even as democracies in the West change leaders and shift directions. When Joe Biden was elected, he did not let up on the pressure to keep China subdued through trade, hampering its development in critical areas such as computer chips through halts on sales, and continuing Trump-era tariffs. The Biden Administration further acted to preserve businesses it deemed too critical for sale to foreign control, like when they blocked the sale of U.S. Steel to Nippon Steel, focused on domestic capabilities through the CHIPS Act, and encouraged economic protectionist arguments regarding the state of the American economy against an increasingly aggressive China.

Now, as Trump returns to office, he has again taken the mantle of the American protectionist who threatens to upend global commerce so prevalent to daily life with growing threats of tariffs and other acts of economic protectionism. His policies mirror those of Chinese President Xi Jinping, who has already begun this process around a decade ago, to which Trump responded to in his first term, and has continued to this day.

This comparison between China’s and the US’ policies, with a special emphasis on China’s economic history, is conducted due to the convergent nature of both nations’ economic histories after World War II as both states liberalized socially and economically to relatively equal extents from their initial points. I will argue that the convergence in policies are not merely coincidental, but a natural result of the economic interdependence brought forth by the liberal international economic order that encodes within itself seeds of its own destruction as leaders use their economic prowess to enact aggression through channels of free trade and neoliberalism.

China’s Economic Journey to the West

The engineer of the modern China that is internationally known as a manufacturing the economic powerhouse, Deng Xiaoping, was actually caught up in the Cultural Revolution he once led, although his fate was more tame than those of some of his more unfortunate compatriots. As Deng swept into key positions after the end of Mao’s reign and became a key voice in the policymaking process in the CCP, he began speaking, inspired by his own musings and the socioeconomic progress he saw from other parts of China while in exile and his own connections to the south, about the existence of a socialist market economy. Far from the socialist isolationism – mainly with foreign capitalist powers – his predecessors and remaining Maoists wanted to promote, Deng embarked on a remarkable journey across the world, visiting Southeast Asia, Japan, and even the US, who had aligned itself with China even under Mao due to the Sino-Soviet Split and a mutual interest against the Soviet Union, and saw the possibilities of market forces for an economy. He returned to China aiming to start the economic reform for Chinese interests and posterity, investing in foreign education and machinery, reintroducing private enterprises on a small-scale and limiting the state ownership of many tracts of society, opening Special Economic Zones (SEZ) – areas specially set aside for foreign investment and technical cooperation with foreign countries that allowed such regions to become heavily export-oriented industrial zones that boosted foreign trade and China’s global economic standing, and beginning a genuine and generational push within China from central planning in all aspects to a limited market economy. 

The US, coincidentally, also began its own period of economic liberalization during this time. Jimmy Carter can be seen as one of the first presidents in post-World War II US history to begin the trend of deregulation rather than the welfare state aimed to be created by Franklin Delano Roosevelt, the latest contemporaneous example of FDR’s legacy being Lyndon B. Johnson’s Great Society programs of expanding the welfare state – notable examples being Medicare, Medicaid, housing reform, the War on Poverty, and acts aimed at expanding civil rights for African-Americans. Timeline wise, Carter was voted into office in 1977, and the Reform and Opening Up program was initiated in 1978 by Deng Xiaoping and fellow reformists in the CCP. Despite some movements that threatened party rule,, namely the student protests that resulted in a violent crackdown in Tiananmen Square in 1989, Deng Xiaoping continued with his economic reforms, holding the status quo of the CCP. Reforms and development continued under Jiang Zemin, Deng Xiaoping’s successor, and Hu Jintao, both in terms of the continuation of the idea of economic reform and further entrenching party authority in China. Deng and future Premiers of China, including Xi, saw the party as the only stable and sure road to China’s rejuvenation and rise globally. Contrary to the Western paradigm during the Cold War that by reforming China into a market economy and exposing it to the West through globalization it would eventually result in a shift to liberal democracy, or at least some form of democratic state, the CCP was able to achieve both a thriving market economy and party domination at the same time.

The Rise of Xi Jinping and Donald Trump

Xi Jinping’s rise in 2012 as the General Secretary of the CCP came at the time when the Chinese economic outlook was at its best. 2010 was one of the most dominant years for the Chinese economy in the global perspective: China’s GDP grew by 10.3%, officially surpassing Japan to wear the crown as the world’s second largest economy; total trade volume went up 34.7%; foreign direct investments both into China and from China rose 17.4% and 23.4%, respectively; and total investments rose 23.8%. To foreign observers, and indeed to many people within China, Deng Xiaoping’s reforms and its continuation by his successors was the catalyst for the Chinese resurgence onto the world stage, like the Silk Road days. It wielded influence over major international trade, economic, and humanitarian organizations and formed its own security and economic cooperations. 

When successive Western leaders promoted the virtues of globalism and free trade, China was one country out of many non-Western states who seized the opportunity to bring itself into the international fold not only as a participant but a leading figure of the new neoliberal order and the one of the few to do so while regarded by the West as a pariah. However, when leadership changed, fear naturally took over regarding the future of Chinese policy. Xi Jinping soothed worries for foreign governments and corporations when he said he would pursue the “Chinese dream of great rejuvenation of the Chinese nation,” meaning a continuation of the Chinese economic miracle started by Deng Xiaoping. Under Xi, the state actually began to reassert the role of the state into the firms which had been left alone to serve the Chinese economy in their own ways the past three decades, placing party secretariats into board positions and integrating firms and their CEOs into the party’s purview by giving them seats in the CCP itself. 

Trump, similarly, used tools of trade protectionism in his effort to “Make America Great Again,” echoing Xi’s language of the restoration of national pride that has once been lost due to foreign influences as justification for greater economic interventions. His efforts to maintain stake over national industries also employed similar tactics, negotiating with Nippon Steel to gain a “golden share” – the ability to appoint a board member – in order to direct steel production by Nippon Steel to US interests.

The Future of the Neoliberal Order

With such a similar set of policies, developments and reactions seemingly acting in tandem, both China and the US are responding to the other state’s moves to economically nationalize in an attempt to avoid being the more dependent state when more avenues to trade gets restrictive. One of the greatest effects of the expansion of neoliberalism is globalism and the interconnectedness of the global system. The same interconnectedness that provided the tools for the growth of the neoliberal outlook has provided the same weapon of which resulted in its own destruction. Donald Trump and Xi Jinping’s ability to wield the economic prowess of their states as effective weapons to wage “economic wars,” both against each other and as tools of neocolonialism, with projects such as Prosper Africa and the Belt and Road Initiative, showcases how the neoliberal tools of free trade and international investment can be exploited to project national power or as tools to increasing relative power at the expense of other states, and the open acceptance of terms of free trade to be used as power considerations in interstate power dynamics.

When the current global status quo is built off the idea of free and open trade, its ubiquity on par with terms of sovereign territory and military prowess, and only held together through international norms, it can be very easy for the domino to fall. The attempts to use free trade to national advantage can easily lead to a cascading effect of mutual and reciprocal attacks. This phenomenon is not new, nor are its repercussions, as seen with the Smoot-Hawley Tariff Act in 1930 that triggered a global wave of reciprocal tariffs that effectively halted global trade and exacerbated the Great Depression worldwide. Its scope and context, however, is new. Today’s connected network of trade is more expansive and more rooted, and states more reliant upon others for domestic prosperity. Countries, especially democracies, have more of a stake in the existence of a system of relative free trade due to sensitivity to domestic concerns. Nonetheless, when states use it to expand their control, they will seek alignment with one trading partner – either China or the US – rather than economic isolation from both or trying to preserve neutrality, both moves which will have the risk to be coerced into trade deals by both states, in order to preserve their markets and their sources of prosperity, especially for export-heavy nations. China, especially, has warned states to not strike any deals with the US on tariffs that would sideline China, lest they be struck with other trade punishments. Even though Xi Jinping accelerated the crisis of neoliberalism with growing efforts to nationalize China’s economy into a sense of autarky that triggered US fears of a destabilizing China on world trade, the cascading effects of such trade conflicts really showed itself with Donald Trump’s insistence on a “trade war” with China over trade deficits and currency manipulation concerns. If left unchecked, the continuous tipping of dominoes may result in an irrevocable shift away from the neoliberal status quo that has dominated the world since the late twentieth century – a system that has generated wealth for many states and their people despite certain and pervasive shortcomings in global wealth distribution. The end of such a status quo will not lead to the regaining of lost national power, perceived or otherwise, but rather only lead to greater economic hardship for those who had come to benefit from it and to the erosion of mutual peace among interdependent nations, especially as a new Sino-American Cold War looms on the horizon, with its first shots fired through tariffs and trade rather than artillery and bombs.

Work Cited

¹ Gary Gerstle, The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era (New York: Oxford University Press, 2022).

² Nick Corasaniti, Alexander Burns, and Binyamin Appelbaum, “Donald Trump Vows to Rip up Trade Deals and Confront China,” The New York Times, June 28, 2016, sec. U.S., https://www.nytimes.com/2016/06/29/us/politics/donald-trump-trade-speech.html.

³ BBC, “Trump Accuses China of ‘Raping’ US with Unfair Trade Policy,” BBC News, May 2, 2016, https://www.bbc.com/news/election-us-2016-36185012.

⁴ Liana Fix, “Germany’s China Policy: Has It Learned from Its Dependency on Russia?” Council on Foreign Relations, November 14, 2022, https://www.cfr.org/in-brief/germanys-china-policy-has-it-learned-its-dependency-russia.

⁵ Reuters, “What Is China’s Zero-COVID Policy and How Does It Work?” Reuters, November 3, 2022, sec. China, https://www.reuters.com/world/china/what-is-chinas-zero-covid-policy-how-does-it-work-2022-11-03/.

⁶ Reuters, “How Will Germany End Its Reliance on Russian Gas Imports?” World Economic Forum, August 24, 2022, https://www.weforum.org/stories/2022/08/energy-crisis-germany-europe/.

⁷ Michael Enright, “China’s Deteriorating FDI Environment for Foreign Firms,” Hinrich Foundation, September 10, 2024, https://www.hinrichfoundation.com/research/article/us-china/rising-challenges-for-foreign-firms-in-china.

⁸ Jerome Doyon, “Party Penetration Deepens in China’s Private Sector,” Asia Times, August 11, 2023, https://asiatimes.com/2023/08/party-penetration-deepens-in-chinas-private-sector/.

⁹ Jeffery Becker, “Fused Together: The Chinese Communist Party Moves inside China’s Private Sector,” CNA.org, September 6, 2024, https://www.cna.org/our-media/indepth/2024/09/fused-together-the-chinese-communist-party-moves-inside-chinas-private-sector.

¹⁰ Marc Levy, “Trump Gets ‘Golden Share’ Power in US Steel Buyout,” AP News, June 25, 2025, https://apnews.com/article/7981a41d2e518fad07c347042f9fdc38.

¹¹ BBC Visual Journalism Team, “Trump Tariffs List: See All the Tariffs by Country,” BBC News, August 7, 2025, https://www.bbc.com/news/articles/c5ypxnnyg7jo.