Dr Qaisar Rashid<\/p>\n
With the emergence of Donald Trump for a second time as the President of the United States (US), the lingering academic discussion on the trade war between the US and China has become a reality. Trump has established a general principle that at least 10 per cent import tariff be imposed on all goods and services entering the US, except from China, which would face higher tariff rates.
\nIn the past, expatriate Chinese workers were the main earning hands of China. Foreign remittances, especially from the US, would help China\u2019s economy grow. It was in December 2001 that the US permitted China to join the World Trade Organization (WTO), ending fifteen years of accession negotiations. It was a godsend moment for China. Led by President George Bush, the US wanted to keep China on its side, replicating the US-China bonhomie expressed during the Cold War (1946\u20131991). In 2001, the US had plunged into the war on terror in China\u2019s neighbourhood. After 2001, Chinese products inundated not only the US markets but also European markets. It took the US and its European allies twenty years (2001\u20132021) to fight the war on terror, and it took China these twenty years to upgrade its economy from a regional supplier to a global supplier of products, especially in the fields of high technology.
\nThe war on terror not only opened the WTO for China, but it also helped China attract investment for manufacturing in a secure place. China\u2019s main strength was its cheap labour, utilising which China became able to replicate the dream of joining the ranks of the Asian Tigers, existing in its eastern and southern neighbourhood. The transfer of knowledge from multinational foreign investment companies (who wanted to have cheap electronic products) was a blessing in disguise. Owing to its vast land size and abundant manpower, China quickly bypassed the Asian Tigers economically.
\nIn these twenty years, development in technology also multiplied, offering Chinese workers firsthand experience of upgrading in information technology. The use of semiconductors (composed primarily of silicon, germanium and gallium arsenide) made China excel in the field of electronics. In 2024, China became the world\u2019s largest silicon producer, with a production volume estimated at 7.4 million metric tonnes. Products relying on semiconductors complemented lithium-ion batteries. Lithium, as lithium pegmatites, is mined in China, besides Australia, Canada, Brazil and Zimbabwe. Both silicon and lithium have enabled China to revolutionise the world of electronics. Both are minerals of the future. Interestingly, Pakistan also has reserves of silicon and lithium, but it is still obsessed with other minerals such as copper and gold. Pakistan lacks a manufacturing base.
\nIn these twenty years, the transfer of knowledge, which remained associated with manufacturing, and local raw materials (besides cheap, affordable labour) helped China consider quaternary technologies such as artificial intelligence, big data analytics, robotics, and nanotechnology. This was how new but small Chinese entrepreneurs emerged, who claimed to manufacture any product of a client\u2019s choice at an affordable price. Chinese workers-turned-entrepreneurs flooded international markets with China-made products. This development led to the US-China dispute on issues of copyright during the first presidential tenure of Trump.
\nIn these twenty years, not only did the US lose its domestic market to Chinese products, Europe also experienced the same challenge. Main manufacturing units (from electrical appliances to motor vehicles) in Germany, Italy and France faced closures. The economic loss accrued expressed itself in the form of the rise of right-wing political parties in Europe. Interestingly, without wielding right-wing ideology, even Trump could not ensure his rise, both the first and second times. That is, Trump had to assume the posture of a right-winger to ascend the throne of the US.
\nFor the US, the time from 2021 to 2025 fell into the category of ruminating on the future course. That is, it has taken the US four years to figure out a solution for economic drainage. Under Trump, the US has taken the lead in economic conservatism by closing its economy to the outside world, especially to China, though the US has not so far made any attempt to exclude China from the WTO. By adopting a compulsory tariff policy, Trump has decided to instigate the tariff age, which violates the trade conditions set by the WTO. In fact, the tariff age denies the existence of the WTO, and renders it irrelevant. It simply means that Trump has tried to take US-China trade relations back to the pre-2001 era.
\nFor China, the US has set higher tariff rates. The China-specific US tariff policy has been showing Europe a path to revive its economies. Trump has also advised Europe to refrain from wars. The rise of right-wing conservative political parties in several European countries is an expression of European worries. These parties are inclined to follow the path being set by the US. Examples of similitude are already emerging, such as tightening the borders, hardening immigration policies, and resorting to the forceful evacuation of migrant workers under one ruse or another. That is, discard the foreign manpower to make room for the locals. The next step is bound to be stopping the entry of Chinese products in order to stimulate local, abandoned manufacturing units, which would restart producing goods. Hitherto, Trump has not talked about any law regulating China\u2019s workers doing business in the US. Whereas no deportation scheme is under consideration, Chinese workers living in the US and Europe are vulnerable to being jettisoned.
\nIn the tariff age, the US and Europe may emerge as trade partners, as they used to be after the First and Second World Wars. Nevertheless, to join the tariff age, Europe has to stop war on its soil. Europe has to ask Ukraine to settle its terms with Russia quickly.<\/p>\n
The writer is a freelance columnist. He can be reached at qaisarrashid@yahoo.com<\/p>\n","protected":false},"excerpt":{"rendered":"
Dr Qaisar Rashid With the emergence of Donald Trump for a second time as the President of the United States (US), the lingering academic discussion on the trade war between the US and China has become a reality. Trump has established a general principle that at least 10 per cent import tariff be imposed on […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[13409],"class_list":{"0":"post-473668","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-article","7":"tag-dr-qaisar-rashiddr-qaisar-rashid"},"yoast_head":"\n