Counter/Consensus: Trade War, Chinese Appetite for Retaliation, and the Wobbly Axis of Evil

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1. Global Trade War (Counter)

In tariffs we trust. With U.S. President Donald Trump now back in the White House, all eyes are on tariffs. Mere hours into his new term, Trump indicated he will impose tariffs on Canada and Mexico as early as Feb. 1, and while the exact timing of new tariffs on China is still up in the air, they remain a strong possibility for early February as well.

Given all the talk of a U.S.-led trade war as a public rallying cry during last year’s presidential campaign, one could easily assume that most Americans are highly enthusiastic about tariffs. One might also think that Americans are more enthusiastic about leveraging tariffs as a tool of economic statecraft than the public in major countries that are expected to be on the receiving end.

On both fronts, our data suggests the assumption is misguided. Per the latest edition of a monthly survey we’ve fielded on tariff sentiment for the past several years, only 48% of U.S. adults support using tariffs to help local producers, making the U.S. public among the least supportive of using tariffs in this capacity. By contrast, the public in most other major developed markets — e.g. Australia, Canada, France, Germany — is somewhat more in favor (Japan in the exception); the same holds for most emerging markets aside from Russia. 

Curiously, when assessed by region, North America — covering Canada, Mexico, and the United States — also shows a noteworthy 8-point decline in average support for tariffs over the past 6 months, covering the time period when Trump’s tariff rhetoric was on full display during the campaign trail. The trend was sustained by a roughly 7-point decline among U.S. adults specifically. Canada and Mexico meanwhile posted 9-point and 2-point declines, respectively.

What explains the U.S. dynamics, and is there a world in which Americans’ declining public support for tariffs causes the new administration to think twice before imposing them? The short answer is: partisanship, and no. 

When we break out the above data on support for tariffs by political affiliation, the downtrend in overall U.S. support is predominantly driven by Democrats, who have dramatically soured on tariffs over the past six months. By contrast, Republican enthusiasm for them has increased slightly over that time period and remains well above the majority mark. For Democrats, the shift mirrors trends in their views of the United States’ overall trajectory surrounding Election Day in November 2024, but with the shift in tariff sentiment occurring over a more extended time period.

There are myriad explanations for the decline in Democrats’ support for tariffs. One possibility pertains to expectations surrounding who pays them and their expected cost. Per our own research, Democrats are substantially more likely than Republicans to believe the costs will ultimately fall on U.S. consumers, and they are more likely to accurately estimate what those costs will be. Accordingly, they are far less likely than Republicans to support each of Trump’s major tariff proposals, with support diminishing as the proposed tariff rate increases. On this front, it’s also worth nothing that while the Biden administration largely maintained Trump’s earlier round of tariffs from 2018 and continued to expand some of them into late 2024, the expansion was far more limited in scope than what the Trump administration has envisioned, suggesting that it’s ultimately their magnitude that has tipped Democrats into the opposing camp. 

Where does this leave U.S. tariff policy in the weeks and months ahead? With Republicans firmly in the pro-tariff camp, public opinion will provide virtually no incentive for President Trump to ease up on his tariff pledges, though the administration’s true interests may ultimately lie in wielding them as a tool to extract concessions as opposed to imposing tariffs for their own sake. The stated reason for the Canada and Mexico tariffs, after all, is immigration. This also includes the proposed 60% China tariffs, which are expected to hit consumers’ pocketbooks in a serious way. Yet for those who think that Republicans specifically might reverse course when faced with a non-trivial increase in their household expenses, our research suggests they may double down or attribute blame to corporations rather than the government.

All that to say: Plan for public opinion to sustain the Trump administration’s tariff push in the coming days, and for countries on the receiving end to see public buy-in for their governments’ efforts to retaliate.

2. Axis of Evil (Counter)

Caught in a bad bromance. In recent months, much has been made of the potential emergence of a new “axis of evil” sustained by strong military and economic ties among China, Iran, North Korea, and Russia, or some combination thereof (see here and here). The onset of the war in Ukraine is often cited as one of the potential drivers of deepening ties among them.

While the emergence of such an axis would pose a clear challenge to the already topsy-turvy geopolitical landscape, we think there’s still a long way to go due to two trends in our data: (1) asymmetric public views on the value of bilateral relations among the Russian and Chinese publics, and (2) middling views of Iran among both groups, calling into question the likelihood of a trilateral bonhomie blossoming in the near term. (North Korea and Iran — two countries where we don’t survey — are omitted from our analysis).

Beginning with China, while a majority of Chinese adults view Russia and Iran as friendly, well below a majority view each country as an ally, suggesting that while they will continue to cooperate on closely aligned national interests à la “the enemy of my enemy is my friend,” the recent lovefest is ultimately a marriage of convenience. (Interestingly, our data suggests Saudi Arabia would be a more natural Chinese partner than Iran in such an axis, while the United States would clearly not be, to no one’s great surprise).

These data points — which come from a long-running monthly survey we field in China — mirror patterns in higher-frequency daily data drawn from our Political Intelligence product. Specifically, while Chinese favorability toward Russia is net-positive and saw a notable boost after the war in Ukraine began in February 2022, net favorability has fallen by roughly 30 points from peak to trough and is now back at pre-war levels, suggesting the war has not driven a sustained shift in the direction of warmer bilateral sentiment in line with the “axis of evil” designation.

Chinese views of Iran are meanwhile up slightly relative to the onset of the war in Ukraine. But similar to views of Russia, they are far from showing a consistent upswing in favorability that would imply a strong public endorsement of deeper bilateral ties. Chinese sentiment is also far closer to parity when it comes to whether the Chinese public likes or dislikes Iran overall.

Pivoting to Russia, our data shows a more pronounced boost in favorability toward China just after the onset of the war in Ukraine, and public views have largely stayed put since that time. But Russian views of China are far more positive than the inverse. This speaks to Russia’s heightened dependence on China as a purchaser of its energy exports and as a supplier of its warmaking inputs, but also to a potential misalignment in sentiment when it comes to how much value each country’s public would ascribe to closer bilateral ties.

Russian views of Iran similarly rose in the aftermath of Moscow’s invasion of Ukraine, but have since fallen back to baseline, standing just above pre-war levels at present and in more or less neutral territory, mirroring patterns in Chinese views of Russia. While Iran continued to support Russia militarily in its war efforts as of late 2024, our data suggests the collapse of both the Assad regime in Syria and Hezbollah’s diminished standing in Lebanon have called into question views of Iran among ordinary Russians.

While we expect cooperation to continue in limited areas, the foundation of this axis is unstable absent mutual regard at the people-to-people level. It bears mentioning that all of these countries are some flavor of autocracy. Nevertheless, authoritarian regimes can still be captive to public opinion. 

All of this is much to the benefit of multinationals who are already straining under persistent geopolitical and supply chain upheaval. Of course, whether such an axis ultimately materializes will be determined by a far wider range of factors than public opinion. But at this point in time, public sentiment is not especially conducive to such an outcome.

3. U.S.-China Business Ties (Counter)

Call of duties. As we noted at the top, with President Trump back in the White House, the long-running U.S.-China trade war is poised for escalation. Prevalent media narratives suggest that when it comes to tariffs specifically, China’s economy — which is dealing with marked domestic strain that has largely been offset by a buoyant trade surplus — is not equipped to weather the storm.

Contra this narrative, our data suggests that China’s economic doldrums won’t necessarily convince the public to throw in the towel on tariffs or cede ground in other areas of commercial interest for U.S. companies, even if retaliation risks further denting the Chinese economy. In fact, public opinion could ultimately pressure the regime to “show strength” by retaliating, even if doing so damages the domestic economy. We assess that some of this retaliation may be highly performative, seeking minimal local economic impact. But that will be cold comfort for the U.S. firms targeted.

With respect to tariffs, the majority of Chinese adults think existing tariffs on the United States benefit the Chinese economy. It’s not a far cry to think that new rounds of tariffs imposed by Beijing would be viewed similarly, potentially helping to explain rising public support for both new and existing tariffs on the United States (second chart below) when China’s economy was worsening over 2024.

Indeed, the Chinese public’s support for both existing and new tariffs targeting U.S. imports is up sharply year-on-year (see our related research here), with a noteworthy uptick in the share who “strongly support” the existing tariffs speaking to the intensity of Chinese sentiment on this front.

Casting a broader net, we see similar signs of Chinese willingness to stay the course when it comes to public support for a variety of investment restrictions targeting U.S. businesses. The most notable trend concerns public support for outright bans on U.S. companies’ ability to do business in China, which has increased by roughly 20 points year-on-year. Per the heatmap above (see “Global Trade War” section), the Chinese public nevertheless remains welcoming toward foreign investment in general, suggesting the public’s rancor is, to a large degree, uniquely directed toward investments coming from the United States.

Views on the victor of a future U.S.-China cold war — the direction in which both countries increasingly appear to be headed, albeit gradually — similarly provide evidence of growing Chinese confidence in Beijing’s ability to weather the storm, suggesting that even persistent economic malaise lasting through 2025 would not necessarily convince the public to throw in the towel (see our related research here). 

Given this pessimistic outlook, how should U.S. companies with business interests in China position themselves for 2025 and beyond? As we note in just-published companion research, the safest option is to make concerted efforts to reroute supply chains through other countries, while diversifying revenue bases by seeking out consumers in other markets. Both efforts will take time, and companies will likely see their business interests in China face hurdles in the meantime.

If there is a silver lining in our data, it’s that on many fronts, Chinese animosity toward the United States has softened slightly from November into December 2024, suggesting some degree of public willingness to judge the incoming Trump administration by its actions instead of just its rhetoric. But the improvement in sentiment is relatively muted overall, and for most data series we examine, support for trade- and investment-related restrictions and consumer action targeting U.S. firms (like boycotts) remains sharply elevated. U.S. companies should prepare for the worst.

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