Cultural Battlefield: How China's Tariffs Target American Identity

When Beijing taxes bourbon and Harleys, it's waging more than economic warfare

Goldman Sachs’ Jared Cohen and David Solomon discussing geopolitics

The latest U.S.-China trade escalation reveals something more calculated than typical commercial sparring. While Trump's 125% tariffs on Chinese imports sparked Beijing's 84% retaliation on American goods, the fascinating story lies in what China chose to target—and why.

In recent months, the U.S. imposed tariffs as high as 145% on Chinese imports, prompting China to retaliate with tariffs up to 125% on American goods. This standoff brought bilateral trade to a near standstill and rattled global markets. However, after tense negotiations in Geneva, both sides agreed to a 90-day truce: U.S. tariffs on Chinese goods are now temporarily reduced to 30%, and China’s tariffs on American imports are reduced to 10%. While this has eased immediate economic pressure and buoyed financial markets, most pre-existing tariffs and non-tariff barriers remain in place, and the threat of renewed escalation still looms.

We're past soybeans and steel. Beijing has aimed its economic artillery at America's cultural crown jewels: Harley-Davidson, Jack Daniel's, Coca-Cola, and Crayola—emblems of American life that have spent decades embedding themselves in global consciousness. When China taxes these exports, it's not just imposing economic pain—it's attempting to sever the emotional connective tissue between America and world consumers.

These cultural icons are serious revenue generators. Coca-Cola, for example, reported $47.1 billion in global revenue in 2024, with China cited as a key driver of growth; its China business saw improved trends and increased marketing investments. Despite recent struggles, Harley-Davidson has spent years cultivating a Chinese customer base. Crayola is expanding its footprint in China, with its first international Crayola Experience set to open in Beijing in 2026, tapping into China’s booming family entertainment market.

To be sure, China's retaliation extends to strategic sectors like aerospace, where Boeing faced the potential collapse of aircraft orders. China recently lifted its Boeing delivery ban after the tariff truce, highlighting how quickly access can vanish. With China accounting for 10% of Boeing's backlog, political shifts mean hundreds of millions at stake.

But targeting lifestyle brands reveals Beijing's sophisticated understanding of soft power economics.

This precision targeting forces American C-suites to confront uncomfortable questions: How exposed is our business to Chinese political risk? What percentage of our valuation depends on access that could vanish overnight? For investors, the calculus shifts from growth projections to geopolitical resilience. Analysts must now factor “China-proofing” into their recommendations.

Investment banks are responding to this new reality. Goldman Sachs and Lazard, for example, have launched dedicated geopolitical advisory practices, reflecting how geopolitical risk is now a central concern for corporate boards and investors. Last year, in a discussion with the bank’s President of Global Affairs, Jared Cohen, Goldman CEO David Solomon noted that, “geopolitical competition is sending more frequent shockwaves through the global economy, and investors are paying increased attention to great-power politics.”

While some companies might successfully reshore or diversify, others, particularly those whose brands embody American identity, may find China permanently closed.

This transcends traditional trade warfare. We're witnessing superpowers weaponize economics to erode cultural influence. Just as Hollywood and Starbucks once surfed waves of American soft power across the Pacific, today's tariffs expose how politically fragile brand affinity has become. If China can reshape global consumer preferences through strategic retaliation, we're not merely in a trade dispute—we're in a battle over which nation sets the world's cultural defaults.

The tariffs themselves may prove temporary. Their psychological impact on markets, minds, and the machinery of global influence could resonate for decades.