The US-China Tariff War: Finding Face-Saving Solutions in a Deadlocked Conflict

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The escalating trade conflict between the United States and China has reached unprecedented levels, with both nations now imposing triple-digit tariffs on each other’s goods.

As of April 11, 2025, the Trump administration has raised tariffs on Chinese imports to 145%, while China has responded by increasing its levies on US goods to 125%.

This rapid escalation has created what analysts describe as a “tariff trap” - a situation where neither leader wants to back down, yet neither knows how to resolve the impasse without appearing weak.

FAF examines the current deadlock and explores potential face-saving solutions for both nations.

The Anatomy of the Current Deadlock

The current trade war has evolved from a negotiating tactic into a geopolitical standoff with profound economic implications.

On Wednesday, April 9, Trump announced a 90-day tariff pause for most nations but specifically excluded China, instead raising tariffs against Beijing while offering relief to other trading partners. This selective approach has effectively isolated China from the global trading system.

For Trump, tariffs represent more than just economic policy - they are central to his political narrative and view of American power. He sees them as a means to redress perceived imbalances, punish rivals, and restore American industrial supremacy.

The president isn’t seeking compromise with China but rather capitulation, viewing each escalation as proof his strategy is working.

Meanwhile, Chinese President Xi Jinping finds himself in an equally rigid position. From Beijing’s perspective, genuine concessions would likely be pocketed by Washington with demands for more, making strategic patience seem like the only viable option.

Chinese officials have described US actions as “unilateral bullying” and “completely against the will of the world,” filing formal complaints with the World Trade Organization.

The Challenge of Saving Face

At the heart of this deadlock lies the concept of “face,” which preserves dignity, respect, and reputation—particularly crucial in high-stakes negotiations.

Both leaders have invested significant political capital in their tough stances, making retreat without apparent victory politically dangerous.

“Maintaining face” refers to the human desire to preserve a positive image or reputation, which allows for more connection and trust-building between negotiating parties.

When leaders feel forced into compromising situations that might make them appear weak, saving face becomes essential to any productive resolution.

Xi’s consolidation of power within China has created additional complications. His rigid hierarchy and propaganda-fueled nationalism leave few credible ways to retreat without eroding his authority.

At the same time, Trump has blurred lines of authority in Washington, leaving Beijing uncertain about who can credibly negotiate on his behalf.

Potential Face-Saving Solutions

Despite the deadlock, several viable pathways could allow both leaders to de-escalate tensions while preserving their political standing.

Staged Reciprocal Tariff Reductions

A carefully choreographed series of reciprocal tariff reductions could give both sides political wins. A phased approach would allow both sides to claim victory at each stage rather than demanding China remove all retaliatory tariffs at once (as Trump has threatened).

For example, a three-stage reduction plan could begin with both nations reducing tariffs on non-controversial goods, followed by graduated reductions on more sensitive sectors, culminating in a final round addressing the most contentious areas.

This approach allows both leaders to demonstrate progress to domestic constituencies while preserving the appearance of strength.

Leveraging Third-Party Mediation

Bringing in respected third-party mediators could provide both leaders with “diplomatic cover” for concessions.

This approach was successful during the Cuban Missile Crisis when backdoor diplomacy through third parties helped Kennedy and Khrushchev resolve the standoff without appearing to capitulate.

Vietnam’s recent agreement to begin trade negotiations with the US demonstrates how smaller nations can constructively meet Washington’s demands.

China could work through ASEAN or other regional forums to establish multilateral discussions that dilute the bilateral confrontation.

Sectoral Agreements Outside the Tariff Framework

Both sides could claim targeted victories by shifting focus from blanket tariffs to specific sectoral agreements. Beijing could offer increased purchases of American energy products and agricultural goods - areas Trump has prioritized for political reasons - while securing concessions in other sectors.

This approach would parallel Trump’s success with other trading partners. As noted in the search results: “With many countries, Trump is treating tariffs as tactical leverage to force quick, pragmatic deals… even as tariffs go into effect, he keeps dangling the prospect of side deals”.

Implementing Tariff De-escalation Mechanisms

Economic research suggests that simultaneous tariff changes across vertically-related markets often have differential impacts. By proposing sophisticated tariff de-escalation formulas that acknowledge this reality, China could frame concessions as technical adjustments rather than political retreats.

Such an approach would appeal to economic experts in both countries while providing a face-saving narrative: that both sides are simply implementing economically sound policies rather than capitulating to political pressure.

High-Profile Leadership Summit

A carefully staged summit between Trump and Xi could provide the theatrical elements both leaders value while creating a platform for announcing agreements. Trump has indicated he expects a call from Xi, suggesting openness to direct engagement.

However, the timing and framing of such a summit would be critical. Rather than appearing as China seeking relief, it could be positioned as two global leaders meeting to restore stability to the world economy - a framing that serves both leaders’ interests.

China’s Optimal Strategic Approach

Given these potential solutions, China’s optimal approach would combine several elements:

Signal openness while maintaining strength: China has already indicated “the door to talks is open,” but emphasized dialogue must be “conducted on an equal basis with mutual respect”. This balanced messaging should continue, presenting China as reasonable but resolute.

Identify achievable early wins: Rather than attempting to resolve all issues simultaneously, China should identify specific sectors where agreements could build momentum. Energy purchases, agricultural trade, or cooperation on non-tariff barriers could provide initial progress.

Engage through multiple channels: While direct leader-to-leader communication may eventually be necessary, China should utilize various diplomatic channels to explore solutions. This approach reduces the perception of desperation while maintaining lines of communication.

Frame concessions as mutual adjustments: Any tariff reductions should be presented as mutual adjustments within a broader framework of economic cooperation rather than one-sided concessions.

Leverage international institutions: China’s WTO complaints provide institutional leverage and international legitimacy. Continuing to work through multilateral bodies reinforces China’s commitment to rules-based trade while isolating Trump’s unilateral approach.

Conclusion

The current US-China tariff war has escalated to dangerous levels, with both leaders trapped in positions from which retreat seems politically impossible. Yet historical examples like the Cuban Missile Crisis demonstrate that even the most intractable conflicts can be resolved when face-saving paths are identified.

For China, the optimal strategy combines patience, multiple engagement channels, and targeted concessions that can be framed as mutual adjustments rather than capitulation.

By focusing on specific sectors for early agreements while maintaining a firm but reasonable public posture, Beijing can potentially break the current deadlock without compromising its essential interests or President Xi’s political standing.

Both Trump and Xi ultimately share an interest in resolving this conflict before it inflicts further damage on their economies and global standing.

The key lies in finding mechanisms that allow both leaders to claim victory while gradually unwinding the punitive tariffs that threaten global economic stability.