An unpredictable, whimsical and disruptive tariffs policy of US President Donald Trump could be counterproductive for US consumers and its geopolitical and geostrategic interests as unpredictability spawns uncertainty, which stymies investment and hiring.
According to The Economist, Trump announced and then postponed 25% punitive tariffs on goods from Canada and Mexico. The US president was using the tariff threat to press both countries to stop the flow of migrants and fentanyl across the border. He granted a 30-day reprieve following urgent talks with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau. Both leaders promised to boost their border security.
It is a heady time for the supporters of Trump as allies will not appease him forever. Both countries had earlier vowed to retaliate with tariffs of their own on American products. The European Union said it would also retaliate after Trump announced that he would "definitely" impose tariffs on EU imports over America's trade deficit with the European bloc. Consequently, the global markets shuddered.
When it comes to China, Trump did impose extra 10% tariffs on Chinese imports. China has set out its retaliation, which comes into force on February 10. Trump has vowed to strike more blows, including, perhaps, to fulfil his threats against the European Union and Taiwan.
On February 4, in addition to the new tariffs, the Chinese government listed several rare metals as controlled exports, giving Chinese President Xi Jinping the power to ban shipments to America at a moment's notice.
Although many rare metals are found in places such as Australia, Brazil, Greenland and South Africa, about 90% of the world's capacity for refining them is in China. China produces almost all of the world's germanium and manganese, three-quarters of its lithium and natural graphite and half its antimony.
Although Trump is convincing allies that the incentives will reverse, strong voices in European countries such as Germany and others are being raised to move closer to China.
Recently, on February 8, according to Reuters, Trump paused his administration's repeal of duty-free treatment of low-cost packages, known as de minimis, from China, giving the Commerce Department time to make the order workable, after the rapid change created disruptions for customs inspectors, postal and delivery services and online retailers.
Trump also said US consumers would feel the heat of tariffs on Chinese products. However, the newly imposed tariffs will not impact Chinese exports. China can easily diversify and enhance exports to other countries without caring about the US tariffs, while offsetting the potential shortfall in its exports to the US.
Regional expert and Centre for South Asia & International Studies Islamabad Executive Director Dr Mehmoodul Hassan Khan said China was the "largest" trading partner of 150 countries. Trump's "dissenting" tariff "syndrome" and imminent actions against the European Union forced it to once again reach out to China for a "win-win" competition and cooperation.
The latest statement of European Commission President Ursula von der Leyen, projecting the EU and China mutual agreements to expand trade and investment ties, is a healthy sign for both sides and "strategic shield" against Trump's tariffs.
China's exports to the EU totaled 3,675.1 billion yuan, a year-on-year growth of 4.3%, reflecting strong European demand for Chinese goods. Imports from the EU reached 1,916.4 billion yuan in 2024.
Hopefully, China will easily manage its trade deficit with increasing ties with the Association of Southeast Asian Nations (Asean), Asia-Pacific Economic Cooperation (APEC), BRICS, Shanghai Cooperation Organisation (SCO) and Africa.
Trump's tariff threats have been termed the "demise" of geo-economics, global free trade, a severe violation of principles of the World Trade Organisation (WTO), the collapse of global supply chains and "renaissance" of geopolitics, creating trade tensions and producing "ripples" in stock exchanges, money, commodity and energy markets.
The exemption of India investing in the Iranian Chabahar Port, Israel into the United States Agency for International Development (USAID) and land grabbing of Gaza and Ukraine all vividly reflect the new grand geopolitical war and double standards of the US foreign policy.
It is feared that the rapid pace, wide canvass, multi-dimensional extension and ill-conceived logic of these series of new tariffs against China, Canada and Mexico have qualified Trump as "Mikhail Gorbachev, former president of the Union of Soviet Socialist Republics (USSR)", of the US, producing "diminishing" effects on its macro-economy, manufacturing capacity, generation of new jobs, reduction of poverty, provision of social security and attraction of investment.
Comparatively, China is less "dependent" on the US and less "reliant" on trade. Over the last 20 years, it has continually "reduced" the importance of trade for its economy and has "revolutionised" domestic production. Now, imports and exports account for only about 37% of China's gross domestic product (GDP), compared to more than 60% in the early 2000s. Thus, China is less prone to any global trade shock.
Furthermore, its "diversified" trade partnerships with Asean, BRICS (Brazil, Russia, India, China and South Africa), SCO, Africa, Central Asia and Belt and Road Initiative (BRI) members have increased "immensely", which creates a strategic balance and counters any external trade shock.
On the other hand, certain US sectors mainly automobile, energy, furniture, food, construction and grocery will be badly affected. Ultimately, the US will be a "loser" in the long term.
Trump's tariffs are an escalation of US protectionism with no clear economic justification, driving up costs for consumers and businesses while disrupting global supply chains. It will also fuel inflation, raise living expenses and make it harder for the US government to keep control over the situation.
It is feared that the US may extend a flurry of new tariffs against China and its products on the pretext of fentanyl drugs, attempts of de-dollarisation by BRICS, Xinjiang economy/products, rare mineral exports, so-called cybercrime against Chinese firms, withholding the use and utility of DeepSeek, military sanctions on so-called nuclear energy cooperation with Pakistan, Iran and Africa and last but not least, fabricated allegations of digitalised espionage in the days to come.
The writer is a staff correspondent
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