A China-US trade war will be harmful to the world economy and hurt fragile open economies like ours
11 April 2025 - 05:00
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington on April 2, 2025. Picture: REUTERS/Carlos Barria/File Photo
The world economy woke up yesterday relieved after US President Donald Trump paused his tariff war for 90 days, except with his arch-rival, China. However, the costly uncertainty continues about what his next erratic step will be.
On Wednesday, Trump’s administration announced that the sweeping tariff hikes he imposed on America’s trade allies would not be implemented for 90 days. China, which retaliated strongly, will continue to suffer from Trump’s tariffs on its exports to the US.
Already, the impact of Trump’s tariffs is evident for all to see. The stock markets have felt the shock immediately. Global trade will take longer to suffer.
It remains unclear exactly what Trump is seeking from the world. He says the US is being ill-treated by its trading partners. He argues that the US is enduring a trade deficit with its partners. This is false. It applies only to a few partners like China.
His approach, which remains opaque and unknown to his advisers, is based on products not global figures.
This week’s reversal of his earlier executive orders suggests ominously that Trump’s target is China or, more precisely, Xi Jinping, China’s president.
Trump has an unhealthy obsession with Xi.
Secretly, he admires Xi’s power. In China’s democracy, Xi can stay on in power as long as he wants. The Communist Party, on which he has an octopus-like grip, decides how long they can tolerate him.
Trump, on the other hand, has no such latitude. He has four years only.
In 2020, when Covid-19 broke out, his instincts were to praise Xi for the hard lockdown he imposed to suppress the spread of the pandemic. When evidence showed that Trump was mishandling the pandemic in the US, he turned to XI and accused him of spreading the disease.
For the better part of his first term, he waged a trade and currency war against China. China’s companies were slapped with restrictions and their products were levied tariffs.
This was a unique strategy. With the rest of the world, Trump chose to disengage, pulled out of trade agreements signed by his predecessors and withdrew from multilateral institutions.
His successor Joe Biden reversed this retrenchment of America’s role in global affairs.
With his return to the White House, Trump has begun to go it alone again. As in the first term, he has set his sights firmly on China.
The rest of the world has reacted with rare calm to Trump’s tariff policy. Unusually, China has been less diffident.
The world has to be concerned. A China-US trade war will be harmful to the world economy. It will disrupt global trade and hurt fragile open economies like ours.
Xi can tough it out with Trump’s remainder in office. China will probably be the biggest winner.
Most countries will likely replace the US market with China’s.
Quite rightly, SA is looking at diversifying away from the US. It is strengthening relations with the EU and the Global South.
The international economy should resist Trump’s protectionist instincts. This is the time to strengthen the global trading system such as the World Trade Organisation. It would be a mistake for SA to close its economy by re-erecting tariffs and non-tariff barriers to trade.
Americans, who will be deprived of low prices and competition, need to decide what to do with Trump’s reckless policies.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
EDITORIAL: Trump’s tariff warfare
A China-US trade war will be harmful to the world economy and hurt fragile open economies like ours
The world economy woke up yesterday relieved after US President Donald Trump paused his tariff war for 90 days, except with his arch-rival, China. However, the costly uncertainty continues about what his next erratic step will be.
On Wednesday, Trump’s administration announced that the sweeping tariff hikes he imposed on America’s trade allies would not be implemented for 90 days. China, which retaliated strongly, will continue to suffer from Trump’s tariffs on its exports to the US.
Already, the impact of Trump’s tariffs is evident for all to see. The stock markets have felt the shock immediately. Global trade will take longer to suffer.
It remains unclear exactly what Trump is seeking from the world. He says the US is being ill-treated by its trading partners. He argues that the US is enduring a trade deficit with its partners. This is false. It applies only to a few partners like China.
His approach, which remains opaque and unknown to his advisers, is based on products not global figures.
This week’s reversal of his earlier executive orders suggests ominously that Trump’s target is China or, more precisely, Xi Jinping, China’s president.
Trump has an unhealthy obsession with Xi.
Secretly, he admires Xi’s power. In China’s democracy, Xi can stay on in power as long as he wants. The Communist Party, on which he has an octopus-like grip, decides how long they can tolerate him.
Trump, on the other hand, has no such latitude. He has four years only.
In 2020, when Covid-19 broke out, his instincts were to praise Xi for the hard lockdown he imposed to suppress the spread of the pandemic. When evidence showed that Trump was mishandling the pandemic in the US, he turned to XI and accused him of spreading the disease.
For the better part of his first term, he waged a trade and currency war against China. China’s companies were slapped with restrictions and their products were levied tariffs.
This was a unique strategy. With the rest of the world, Trump chose to disengage, pulled out of trade agreements signed by his predecessors and withdrew from multilateral institutions.
His successor Joe Biden reversed this retrenchment of America’s role in global affairs.
With his return to the White House, Trump has begun to go it alone again. As in the first term, he has set his sights firmly on China.
The rest of the world has reacted with rare calm to Trump’s tariff policy. Unusually, China has been less diffident.
The world has to be concerned. A China-US trade war will be harmful to the world economy. It will disrupt global trade and hurt fragile open economies like ours.
Xi can tough it out with Trump’s remainder in office. China will probably be the biggest winner.
Most countries will likely replace the US market with China’s.
Quite rightly, SA is looking at diversifying away from the US. It is strengthening relations with the EU and the Global South.
The international economy should resist Trump’s protectionist instincts. This is the time to strengthen the global trading system such as the World Trade Organisation. It would be a mistake for SA to close its economy by re-erecting tariffs and non-tariff barriers to trade.
Americans, who will be deprived of low prices and competition, need to decide what to do with Trump’s reckless policies.
EDITORIAL: Manic Monday … and more to come
EDITORIAL: Help Zimbabweans help themselves
EDITORIAL: Business, politics and economy
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Banks and retailers lead JSE rebound
US apparel outlets halt orders and hiring due to tariffs
US treasury secretary to lead tariff talks with more than 70 countries
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.