In a breakthrough for global trade, China and the United States concluded ice-breaking talks in Geneva with a deal to temporarily roll back tariffs and create a new bilateral consultation mechanism.

The White House swiftly claimed the deal, concluded last week, as a triumph, hailing President Donald Trump’s “unparalleled expertise in securing deals that benefit the American people”. Yet many analysts and media outlets interpreted it as a win for Beijing, whose tactics forced Washington to compromise.

Indeed, the smooth progress and surprisingly constructive outcome of the talks defied expectations, given the years of tit-for-tat escalation that defined this trade war. Yet, looking back at the past month’s turmoil, the unexpected ceasefire appears less shocking and almost inevitable.

While both sides can rightfully claim tactical victories, the greatest winner is globalisation itself. Though battered by unprecedented trade hostilities, the interconnected global economy has demonstrated remarkable resilience – rebuffing protectionism’s strongest assault in decades and reasserting the fundamental logic of international exchange.

The tariff ceasefire underscores a fundamental truth of our age: in an era of deeply intertwined supply chains and financial systems, economic nationalism ultimately hits a hard ceiling. While globalisation now faces its most serious reckoning in decades, this temporary thaw proves the system’s foundations remain intact – battered, but unbowed.

As British economist David Ricardo argued in the 19th century, differences in natural resources, productivity and human ingenuity grant each nation comparative advantages in certain areas of production. When countries specialise accordingly and engage in free trade, the result is greater efficiency, mutual benefit and global prosperity.

The United States has literally been one of globalisation’s greatest beneficiaries, yet its domestic policy failures have created a dangerous paradox. While Wall Street and Silicon Valley reaped historic rewards from global integration, Washington neglected to modernise industrial policy or strengthen social safety nets. The resulting inequality — with manufacturing hollowed out as high-value services thrived — created fertile ground for political opportunism.

For decades, Washington pursued liberalised trade and open markets with near-religious fervour, confident that the rising tide of global capitalism would lift all boats. But while capital soared, entire communities rooted in manufacturing were left to sink. Factories shuttered. Towns hollowed out. Workers — once the backbone of American prosperity — were cast adrift, victims not just of global competition, but of a government that failed to cushion the blow. Rather than address these self-inflicted wounds, successive administrations have found it easier to blame external actors, with China becoming the favourite scapegoat for American governance failures.

Recognising these problems, the Trump administration appeared to signal a policy pivot by imposing the so-called “reciprocal tariffs”. However, its approach — blaming foreign competitors and resorting to sweeping unilateral tariffs — was a misdiagnosis. These blunt instruments are comparable to a technician trying to fix a chaotic server room by indiscriminately ripping out cables and wires: not only ineffective, but deeply damaging.

This represented the full maturation of “America First” into a radical trade doctrine – one that repurposed tariffs from mere regulatory levers into blunt instruments of economic coercion. By willfully violating the WTO’s non-discrimination principle, Washington pursued a dangerous two-fold objective: dismantling multilateral trade orders while reconstructing ones serving Washington’s strategic interests. Such coercive recalibration went beyond protectionism – it constituted nothing less than an audacious bid to institutionalise American economic hegemony through transactional force.

This aggressive strategy underestimated globalisation’s structural depth and resilience. While Chinese exporters absorbed significant blows, the ricochet effects proved also damaging to American interests. US businesses faced supply chain whiplash, consumers bore the brunt of inflationary spikes, and macroeconomic stability deteriorated – all reflected in volatile equity markets.

The escalating tariff war had reached de facto trade embargo levels – a mutually destructive outcome neither nation truly desires. Decades of globalisation have woven China and the United States into an intricate economic tapestry – one that cannot be unravelled without collateral damage. Chinese manufacturers thrive on access to America’s consumer market, while US households and businesses rely on China’s unparalleled supply chains for affordability and efficiency. Meanwhile, China’s burgeoning middle class — poised to become the world’s largest consumer market — offers American firms a critical growth frontier at a time of slowing domestic demand. This symbiotic relationship underscores a hard truth: economic decoupling is not just impractical, but mutually destructive.

The economic blowback of the tariff war delivered an undeniable lesson to Washington: America’s internal challenges cannot be resolved through protectionism and isolation. They require systemic reforms grounded in data, planning, and public engagement. At the same time, the new challenges posed by globalisation — from supply chain security to fair competition — necessitate international co-operation and improved global governance. It’s not just about growing the economic pie, but ensuring it is shared more equitably. Just as important is the fact that the China-US relationship was never an exploitative arrangement as portrayed by protectionists, but rather a mutually beneficial partnership.

Yet this ceasefire remains haunted by the ghosts of Washington’s unpredictable track record. Washington’s 2018 about-face — when it tore up a draft agreement and triggered more than 18 months of escalating tariffs — established a dangerous precedent of credibility erosion. Without binding enforcement mechanisms or genuine political will, such temporary truces risk becoming mere interludes in what increasingly resembles a new Cold War economic paradigm.

While globalisation’s long-term trajectory remains unstoppable, the tariff war has left deep scars – eroding business confidence, distorting supply chains and slowing global growth. The world now watches to see whether Washington will finally abandon its zero-sum mindset and engage China through good-faith diplomacy – one that features mutual respect, equality and shared interests.

The views expressed in this article may or may not reflect those of Pearls and Irritations.