The trade war between the United States and China has gone quiet, but it has not ended. It has moved somewhere harder to see.
On October 30, China and Switzerland signed a protocol upgrading their free-trade agreement (bilateral trade between the two reached $49.04 billion in 2025). The changes cover goods, services, investment, digital trade, competition and rules of origin, and China’s Ministry of Commerce said the agreement would deepen trade and investment ties and reinforce a rules-based trading system. [2]
And the same week, the larger U.S.–China conflict was moving the other way. A November 1 analysis in The Guardian argued that the tariff truce between Washington and Beijing has lowered the temperature for now but has not resolved the rivalry underneath it. Each side is working to protect the supply chains it needs and to restrict the ones that give the other technological and military power. [1]
So what has changed? For decades, trade was treated mainly as a way to make countries dependent on one another and therefore less likely to fight. Now the dependence itself is being treated as a security risk. That, I think, is the shift that matters, and it is not a new one.
Trade has done this before
Ronald Findlay and Kevin O’Rourke’s Power and Plenty: Trade, War, and the World Economy in the Second Millennium follows a thousand years of global commerce, and its central finding is that trade has never moved in a straight line toward greater openness. Globalization expands and contracts. Technology matters, but so do war, political power and the security of trade routes.
The authors tie economic growth to the way regions become linked through commerce, and they show that the same links can become sources of conflict. Trade creates prosperity, and it creates dependence. When a government decides that the dependence is dangerous, the networks that once connected economies become targets for control.
That is history, not prophecy. Nothing in the book says a U.S.–China war is coming. But it does tell you how to read the current struggle: as a change in what trade means politically, not as a disagreement over tariff rates.
From efficiency to resilience
For decades, companies built supply chains around efficiency. They bought components where costs were lowest, concentrated production where skills and infrastructure were strongest, and treated political risk as one more cost to manage.
The pandemic shook that, and the U.S.–China rivalry is now replacing it with a different priority, resilience. Washington wants to limit China’s access to advanced chips, chipmaking equipment and other sensitive technologies. Beijing is using its control over rare-earth processing, magnets and other industrial inputs as leverage. Neither side is trying to end trade altogether, only to make sure the other cannot interrupt its essential production.
That leaves both of them in an awkward middle. The two economies remain deeply connected, and each is trying to reduce the other’s ability to use the connection as pressure. A factory can stay open while the relationship around it turns hostile.
Why Switzerland matters
The Swiss agreement is the useful counterexample to the simple story of deglobalization. China is not withdrawing from trade; it is still signing agreements that widen market access, investment, digital commerce and common rules. The difference is that its openness is becoming selective. A country can open its market to Switzerland while restricting technology exports to the United States, and seek foreign investment in one sector while cutting its dependence in another. This is not the end of globalization but globalization organized around political trust.
Why can one country do both at once? Findlay and O’Rourke’s history explains it. Earlier waves of globalization were shaped by political coalitions, military protection and control of commercial routes. Trade expanded when governments believed the system served their power, and it contracted when they believed rivals were gaining too much from it. We are following the same broad pattern with different tools. Tariffs are only one of them. Export controls, investment screening, mineral restrictions, subsidies and rules about data and artificial intelligence now do some of the work that blockades once did.
The dangerous part of dependence
The United States and China are competing for control of the infrastructure of the next economy, not just for market share. The most important disputes concern materials and technologies with both civilian and military uses.
A shortage of rare-earth magnets hits electric vehicles, wind turbines and industrial equipment, and it also hits aircraft, missiles and naval systems. Advanced semiconductors run consumer products, data centers and weapons. That overlap is what makes ordinary commerce so easy to describe as a national-security issue.
The Guardian cites an International Energy Agency estimate — an estimate, not a forecast — that losing access to rare-earth magnets could cost the United States and Europe about $1.5 trillion a year. The mechanism behind the number is plain: a commercial dependency becomes a strategic vulnerability the moment supplier and customer stop trusting each other. [1]
What to watch next
The next phase will be decided by what each side counts as an acceptable security risk. If the “security” category keeps expanding, the room left for ordinary trade shrinks, and businesses face higher costs, duplicate production and pressure to choose a political side. If the category stays narrow, the two powers may keep a workable economic relationship inside a strategic rivalry.
So watch three things: whether critical-mineral restrictions are relaxed or widened, whether semiconductor controls spread to more ordinary technologies, and whether countries such as Switzerland can keep trading openly with China without being forced into one bloc or the other.
The trade war has gone quiet because, for now, the tariffs really are paused. The deeper conflict is getting harder to see and more expensive to reverse. Findlay and O’Rourke show that globalization has never been the opposite of geopolitics; it has been one of its main instruments. The United States and China are learning that lesson from opposite sides: dependence creates wealth, but it also creates leverage.
This week’s book: Ronald Findlay and Kevin H. O’Rourke, Power and Plenty: Trade, War, and the World Economy in the Second Millennium (Princeton University Press, 2007; paperback edition, 2009).
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References
[1] The Guardian, “The US-China trade war seems to have subsided,” November 1, 2026.