I Ching Analysis of the U.S.-China Trade War and Global Economic Shifts

The trade war between China and the U.S. has reshaped global economic alliances, particularly in technology, supply chains, and financial systems. Based on I Ching wisdom, we can analyze different aspects through relevant hexagrams.

1. Technology War (Hexagram 26 – 大畜 “Great Accumulation”)

Context:

The U.S. has restricted China’s access to advanced semiconductor technology, particularly from Taiwan (TSMC), the Netherlands (ASML), and Japan. Meanwhile, China is investing heavily in domestic semiconductor production, AI, and quantum computing to break its dependence on Western tech.

Hexagram 26 Interpretation:

• “Great Accumulation” means storing strength before a breakthrough. China is not yet at par with the U.S. in semiconductor technology, but it is making steady progress (e.g., Huawei’s 7nm chip breakthrough despite sanctions).

• This hexagram advises patience: China should continue accumulating talent, patents, and industrial capabilities until it can challenge U.S. dominance.

• Long-term strategy: Rather than direct confrontation, China should expand partnerships with BRICS nations and develop alternative supply chains.

Outcome Prediction:

• China won’t completely decouple from Western tech but will build a parallel system (e.g., RISC-V chips, quantum computing).

• The U.S. may win in the short term, but China’s “accumulation” strategy ensures long-term resilience.

• “He who controls the wellspring of knowledge will lead the future.” China must continue investing in R&D and industrial policy.

2. Supply Chain Shift (Hexagram 64 – 未济 “Before Completion”)

Context:

The U.S. and its allies (Japan, EU, India) are trying to shift supply chains away from China, favoring Vietnam, India, and Mexico. However, this process is incomplete and full of setbacks (rising costs, lack of skilled labor, infrastructure gaps).

Hexagram 64 Interpretation:

• “Before Completion” symbolizes a transition period where things are uncertain, and the final outcome is not yet determined.

• The West wants to weaken China’s dominance in global trade, but China’s deep-rooted industrial ecosystem is hard to replace.

• Vietnam, India, and Mexico benefit in the short term, but they cannot yet match China’s efficiency, infrastructure, and scale.

• China is restructuring its trade alliances (e.g., strengthening ties with ASEAN, the Middle East, and Latin America), ensuring its position remains strong even as supply chains diversify.

Outcome Prediction:

• The realignment of global supply chains will continue, but China will still hold a dominant position.

• Western companies may move low-tech manufacturing out of China, but China will retain control over high-tech and critical industries.

• “Completion is near, but patience is required.” The global economy is still in flux, and new trade partnerships will emerge.

3. BRICS Expansion & Financial Strategy (Hexagram 11 – 泰 “Peace”)

Context:

• China is leading de-dollarization efforts, promoting the yuan in global trade and strengthening BRICS as an alternative economic bloc.

• The BRICS alliance (China, Russia, India, Brazil, South Africa) has expanded to include Saudi Arabia, Iran, UAE, and others, challenging Western economic dominance.

• The push for a BRICS currency or alternative financial system is a direct response to U.S. sanctions and dollar dependency.

Hexagram 11 Interpretation:

• “Peace” (泰) represents a period of balance and integration.

• The West tries to isolate China, but China builds stronger ties with emerging markets.

• China-Russia energy trade in yuan is already reducing U.S. dollar dominance, and Saudi Arabia’s potential shift toward yuan for oil sales is a game-changer.

• BRICS+ will not replace the dollar overnight, but the financial shift is gaining momentum.

Outcome Prediction:

• The global economic system will become more multipolar, with China playing a leading role in alternative trade and finance.

• “When the old order weakens, the new order rises.” The U.S.-led economic structure will not collapse immediately, but a parallel system will emerge.

• BRICS expansion gives China leverage, but success depends on how well member nations coordinate economic policies.

4. Geopolitical Strategy & Military Considerations (Hexagram 6 – 讼 “Conflict”)

Context:

• The Taiwan issue, South China Sea tensions, and U.S. military presence in Asia-Pacific are potential flashpoints.

• The U.S. has strengthened alliances (AUKUS, QUAD, NATO-Asia partnerships), while China is expanding its military capabilities.

• If economic tensions escalate into military conflicts, it could reshape global power dynamics.

Hexagram 6 Interpretation:

• “Conflict” (讼) warns of disputes that cannot be easily resolved.

• Direct war is unlikely, but tensions will continue in economic, cyber, and technological warfare.

• Diplomacy and strategic patience are key—China must balance assertiveness with restraint to avoid direct confrontation while securing strategic gains.

Outcome Prediction:

• The U.S. will continue provocations in Taiwan and the South China Sea, but China will avoid direct military conflict, focusing instead on economic warfare.

• “The wise leader wins without fighting.” China will push for diplomatic and economic solutions while strengthening military deterrence.

Final Conclusion:

Based on these I Ching hexagrams, the U.S.-China trade war is not just about tariffs and sanctions—it is a long-term struggle over technology, financial dominance, and geopolitical influence.

Who Benefits?

• Short-term winners: Countries like Vietnam, India, and Mexico, which receive supply chain investments.

• Long-term winners: China, if it successfully builds self-sufficiency in semiconductors, finance, and alternative trade routes.

• The U.S. can slow China down but cannot stop its rise. The more China adapts, the more resilient it becomes.