[The Editors' Verdict] US-China 'Chicken Game': Is Survival the Only Victory?

Trump and Xi Jinping Stand Firm Without Compromise
Both Sides Head Toward Mutual Losses
South Korea Seeks Survival Strategy Amidst Clash of Giants

On a single-lane road, two cars drive toward each other head-on. If one swerves, that driver is labeled a "chicken" (coward), but if neither swerves, they risk serious injury or even death. This is the "chicken game," a classic model in game theory.

The trade war between the United States and China is taking on the characteristics of a "chicken game" with no exit in sight. Through a tit-for-tat approach of retaliation and countermeasures, tariff rates on both sides have soared to unprecedented levels, leading to the collapse of normal trade and pushing their goods trade relationship to the brink of severance.

So far, it appears that the United States, which fired the first shot, is showing more impatience than China. President Donald Trump, who has maintained a hardline stance against China, has recently begun to make conciliatory gestures, stating that "tariffs could be lowered." While Trump's unique "art of the deal" often involves making bold moves and then dealing with the aftermath to secure favorable outcomes, it remains unclear whether this approach is working as intended.

In response to not only retaliatory tariffs but also U.S. export controls on advanced technology and sanctions against Chinese tech companies like Huawei and SMIC, China has introduced various countermeasures, such as restricting rare earth exports and limiting the screening of Hollywood films within China. Controlling 70% of global rare earth production and 90% of refining processes, China is weaponizing its resources for retaliation. Additionally, China is preparing further economic stimulus measures, such as interest rate cuts, and developing support plans for domestic companies in anticipation of a prolonged trade war.

This trade war differs from those in the past. China, with its independently developed artificial intelligence DeepSeek, delivered a "DeepSeek shock" to the world in January. Huawei, China's largest telecommunications equipment manufacturer, is developing its own AI chips to replace high-performance AI chips from Nvidia. BYD's electric vehicles are already threatening Tesla's dominance. These advances are the result of lessons learned during Trump's first term eight years ago.

Some even predict that the United States may not be able to withstand the pressure. Apollo Global Management, a major U.S. asset manager, warned that "within weeks, store shelves across America will be empty, and shortages similar to those experienced during the pandemic will occur."

It is often said that it is not the strong who survive, but those who survive who are strong. Recently, social media has been flooded with images depicting Trump anxiously waiting for a call from Xi Jinping, or appearing to be outmaneuvered by Xi. In China, a socialist country, "patriotic consumption" campaigns are being promoted, with scenes circulating of people boycotting Starbucks and KFC or throwing away Nike shoes.

Meanwhile, in the United States, a Washington Post poll found that President Trump's approval rating stands at just 39%, the lowest among all presidents at the 100-day mark. Trump's response was to dismiss it as "a fake poll from a fake news outlet," claiming that these organizations should be investigated for election fraud.

No one knows who will win this unprecedented trade war, but for now, it resembles two rams facing off on a narrow bridge. In Aesop's fable, the two rams fought to cross first, only to both fall into the water and perish. The answer is simple: even if the United States and China do not collapse, it is clear that both will suffer significant losses. In this clash of giants, can smaller countries like ours remain unscathed?