Unfortunately, people, products, prosperity and even penguins are caught in the crossfire of the drastically changing reciprocal tariffs imposed by US President Donald Trump, eroding free, fair and transparent international trading systems and the global economy.
In a politi-cally motivated manoeuvre, the US Administration has escalated the US-China trade war, with tariffs exceeding 10% on most countries now given a ninety-day reprieve, while those on China are hiked to a staggering 145% after Beijing raised its levies on the US to 84%.
Strangely, many economists and regional experts from Pakistan have labelled this ongoing war as a clash of economic civilizations, neglecting the real underlying grand strategy behind the series of US reciprocal tariffs.
It appears the US Administration has its own secretive plans to further contain and marginalize China’s economy, aiming for a collapse dictated by its own whimsical lists in the future.
Thus the announcement by ASEAN not to retaliate against US tariffs, the EU’s deferment of countermeasures for the next 90 days and Cambodia’s diplomatic alignment with Washington DC clearly point to a plan of isolating China and forming a global coalition to jointly address it.
This emerging geo-politics and geo-economics should serve as a wake-up call for China’s policymakers, urging immediate corrective action through greater socio-economic integration, trans-regional connectivity, financial cooperation and digitalization with ASEAN, RCEP, BRICS and SCO, in order to mitigate the spillover repercussions of the US tariffs.
The Chinese Commerce Ministry rightly labelled the US’s escalating tariffs as a big mistake on top of another, exposing the blackmailing nature of the US, while emphasizing China’s commitment to never accept this.
If the US persists, China will fight to the end, demonstrating its unwavering spirit to resist all odds.
This escalating tariff conflict seems to be the strongest indication of a likely hard decoupling between the US and China in the near future.
Most recently, Chinese Premier Li Qiang emphasized the Chinese economy’s multiple strengths, resilience and immense potential, noting that China has long been preparing for Trump’s tariffs by diversifying its trade away from the West, particularly the US.
According to reliable Chinese data, exports to the US accounted for 14.7% of China’s total in 2024, down from 19.2% in 2018, while shipments to Southeast Asia and BRI countries have in-creased.
Additionally, China’s exports to the G7 fell from 48% in 2000 to 30% last year, yet its global export share has grown by 1% to 14% since Trump’s first term, highlighting the strength of its macro-economy and manufacturing capacity.
Furthermore, interestingly the policy makers of China have specifically targeted industries such as agriculture that are located largely in Trump-supporting red states, with new tariffs on wheat, beef, pork and soybeans.
Additionally, it has slapped restrictions on the export of more rare-earth minerals, which are used to manufacture everything from smartphones and automobiles to advanced semiconductor chips and anti-ballistic missile systems.
Moreover, China has added a host of new US companies, including drone maker Skydio, to its export control list, expanded its unreliable entities list and strengthened its anti-foreign sanctions law all part of a growing toolkit for economic retaliation.
Remarkably the Chinese policy makers have clearly instructed the Chinese firms to delay any planned investment in the USA along with warning its banks and financial institutions to decrease their purchase in the US dollar.
The author suggests that policymakers in China should consider placing restrictions on pur-chases of services from US firms, significantly increasing tariffs on US soybeans, banning imports of US poultry and Hollywood films, suspending cooperation on controlling the ille-gal drug fentanyl and investigating US companies in China over intellectual property-related issues.
Moreover, the author submits that China’s economy has the ability to target the US services sector in an effective way, such as by restricting US firms from participating in Chinese government procurement processes or limiting cooperation between Chinese companies and US law firms and consultancies.
In summary, it is suggested that Chinese policymakers must chalk out a holistic, comprehensive, coordinated and integrated economic roadmap, further expanding domestic demand as a long-term strategy and striving to make consumption the main driving force and stabilizer of economic growth.
It is proposed that the Chinese government should implement more practi-cal macro policies through the timely introduction of new incremental measures in light of the evolving situation, ensuring that uncertainties in the external environment are met with strong and effective policy responses.
Further stimulation of the private sector and all business entities should also be explored and expanded.
Hopefully, Chinese entrepreneurs will proactively adapt to changing circumstances, driving growth and strengthening their enter-prises.
The writer emphasizes that high-quality development, technological innovation, the deepening of structural reforms and adoption of futuristic policies must be prioritized to sustain economic momentum.
At the international stage, China’s commitment to global shared prosperity as well as Presi-dent Xi Jinping’s three initiatives on development, security and civilization—alongside mul-ticulturalism—are projected as the future custodians and guarantors of economic globaliza-tion and international cooperation.
Last but not least, China’s high-level opening-up, qualita-tive industrialization, digitalization, artificial intelligence, quantum and green technologies and hybrid agriculture should collectively strengthen the corridor of knowledge and human-ity.
Thus, China’s “fight to the end” stance is supported by deep-rooted confidence and the resilience of its long-term economic strategy.
—The writer is President, Pak-China Corridor of Knowledge, Executive Director, CSAIS, regional expert: China, CPEC & BRI. (mehmoodulhassankhan@yahoo.com)
