As the world’s two largest economies edge closer to a new round of trade brinkmanship, the stakes for global markets and everyday Americans could hardly be higher. On Friday, October 17, 2025, U.S. Treasury Secretary Scott Bessent announced plans to meet with Chinese Vice Premier He Lifeng in Malaysia next week, aiming to head off a dramatic escalation in tariffs on Chinese goods. The meeting, confirmed after a frank video call between the two officials, comes as President Donald Trump threatens to slap a punishing 100% tariff on all Chinese imports starting November 1—unless Beijing backs down from sweeping new export restrictions on rare-earth minerals and magnets, according to Ammon News and Xinhua.
The timing is critical. The current truce, hammered out over four European cities and six months of negotiations, is set to expire on November 10. Without a new deal, tariffs that once soared to triple-digit levels could return, and the ripple effects would be global. Malaysia, the venue for the latest talks, finds itself in the crosshairs too, facing a threatened 100% U.S. tariff on semiconductors and electronics—industries that are vital to both the American and Chinese supply chains.
Trump’s approach has been anything but subtle. He told the Fox Business Network, “It’s not sustainable, but that’s what the number is,” referring to the 100% tariff, and squarely blamed China for forcing his hand. He’s also threatened to halt exports of “any and all critical software” in retaliation for China’s dominance and recent restrictions in the rare-earth market, which remains essential for tech manufacturing worldwide.
Wall Street, which has weathered a week of volatility fueled by tariff anxieties and credit concerns, perked up slightly on Friday after Trump confirmed that he would meet Chinese President Xi Jinping in South Korea in two weeks. “I think we’re going to be fine with China, but we have to have a fair deal. It’s got to be fair,” Trump told FBN’s “Mornings with Maria.” He added, “China wants to talk, and we like talking to China.”
Yet, optimism is in short supply among global institutions. World Trade Organization Director-General Ngozi Okonjo-Iweala urged both countries to de-escalate, warning in an interview with Reuters that a full decoupling could shrink global economic output by as much as 7% over the longer term. The WTO has grown increasingly concerned as the U.S. and China trade barbs and threats, with China’s Commerce Ministry accusing Washington of undermining the rules-based multilateral trading system and vowing to intensify dispute settlement actions at the WTO.
These high-level disputes are not just abstract policy debates—they’re hitting American wallets hard. As reported by Moneywise and The Budget Lab at Yale University, tariffs imposed by the Trump administration have already raised costs across major industries, translating to an average additional expense of about $3,800 per U.S. household in 2024. Major brands like Walmart, Nike, and Hasbro have warned that consumers will feel the pinch as higher import fees drive up prices. Goods such as coffee have already seen sharp price hikes, and further increases are expected in 2026, with even cars and housing materials caught in the crossfire.
Retailers aren’t faring much better. RSM US economist Joe Brusuelas notes that goods-related businesses have experienced “four straight months of declines since May.” The Tax Foundation estimates that tariffs could reduce GDP by 0.8%, cut market income by 1.5% in 2026, and leave households shouldering an average burden of $1,300 to $1,600. Even Treasury Secretary Bessent, while touting the long-term promise of job growth in construction and manufacturing, admitted, “We can’t snap our fingers and have factories built.”
In response to mounting public frustration, the American Worker Rebate Act has emerged as a possible lifeline. Introduced by Republican Sen. Josh Hawley of Missouri, the bill would provide payments of at least $600 to lower- and middle-income adults and their dependent children to help offset the sting of tariffs. The rebates would phase out for individuals earning above $75,000 and married couples over $150,000, but wouldn’t be issued until after December 31, 2026, as Congress tallies up tariff revenues. As of October 2025, the bill remains stuck in Senate committee, with no vote scheduled.
The proposal has sparked debate on Capitol Hill and beyond. Supporters argue direct payments could help families manage higher costs for essentials like groceries, fuel, and housing materials. Critics, however, say the rebates would only recoup a fraction of what families have lost, and some see them as little more than political messaging ahead of the next election cycle. As Forbes contributor Robert Goulder notes, rebates are often wielded as “political tools during election cycles,” rather than as lasting economic solutions.
Meanwhile, the Supreme Court is set to review the legality of some of Trump’s tariff actions in November, a decision that could determine whether the measures—and any associated rebates—remain in place. If the Court upholds the tariffs, Congress may face mounting pressure to pass relief measures. For now, Americans must continue to budget carefully and watch Washington for signs of actual relief.
Criticism of Trump’s tariff policy extends beyond the political arena. In his new book, The Economic Consequences of Mr Trump: What the Trade War Means for the World, veteran journalist Philip Coggan delivers a scathing assessment, arguing that Trump’s tariffs have made goods more expensive and disrupted the global economy. Coggan points out that the global trade system, painstakingly built over decades, has been undermined by Trump’s actions, effectively neutering the World Trade Organization. He writes, “The US does not make wholly American goods… Around half of all US cars are made from imported parts. When you impose tariffs on imported components, you increase the costs of domestic producers.”
Coggan also highlights the unpredictability of Trump’s approach, noting his sudden decision in May 2025 to double tariffs on steel and aluminum to 50%. The author argues there is “no sign that Trump has a plan to replace the global system he has been smashing,” and warns that even if countries strike deals with the U.S., they know that high tariffs could be re-imposed at a moment’s notice. The post-1945 trading system, which fostered decades of economic growth, is now at risk, he contends, with protectionism threatening to reverse those gains.
As the next round of negotiations looms and Americans brace for further price hikes, the world watches closely. Will the U.S. and China find common ground, or will escalating tariffs trigger a new era of economic turbulence? Much depends on the outcome of the talks in Malaysia, the Supreme Court’s decision, and whether Congress can deliver meaningful relief for households caught in the crossfire of a global trade war.
For now, uncertainty reigns—from the halls of power in Washington and Beijing to the aisles of American supermarkets. The choices made in the coming weeks will shape not only the cost of living but the future of the global trading system itself.
