Opinion | The US is burning bridges as China builds relationships

Name: Donald Trump unveils US$100 billion investment plan by Taiwanese chip giant TSMC
Uploaded: 2025-03-06T01:30:09.000Z
Duration: 2 min 14 s
Description: Donald Trump unveils US$100 billion investment plan by Taiwanese chip giant TSMC

Tariffs may quickly reduce US imports, then what? To revitalise US industries, Trump must rebuild the ecosystem, and that takes time

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Christopher Tang

Published: 9:30am, 6 Mar 2025Updated: 12:11pm, 6 Mar 2025

The United States is imposing various tariffs to protect its manufacturing sector, which has been significantly weakened. However, burning bridges with its trading partners before revitalising its industrial ecosystem can be risky. In contrast, China is building bridges with developing countries and making plans to become self-sufficient in food production and technology development.

This week, President Donald Trump imposed an additional 10 per cent tariff on Chinese imports, citing China’s role in the fentanyl trade. This move, doubling the 10 per cent tariff that was to take effect on Tuesday, is part of a broader strategy to pressure China. Trump also carried out his threat to impose 25 per cent tariffs on products from Canada and Mexico, criticising these countries for not doing enough to curb drug smuggling.

In addition, Trump is planning reciprocal tariffs against other countries that impose tariffs on the US. This approach is intended to address what Trump perceives as unfair trade practices that disadvantage American exporters. According to Trump, the current tariffs system is unfair to the US because many countries impose higher tariffs on American goods than the US imposes on theirs.

This evolving set of tariffs aims to protect domestic industries by discouraging imports. However, this strategy is fraught with risks and challenges.

First, it is unclear whether the US has the capacity to rebuild its industrial ecosystem within a short period. Since the globalisation movement that began during the Reagan era in the 1980s, countries have specialised in specific aspects of the manufacturing ecosystem to facilitate global trade.

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Donald Trump unveils US$100 billion investment plan by Taiwanese chip giant TSMC

Over the decades, US firms have offshored many operations, focusing on design and marketing with higher profit margins while allowing China and other developing countries to handle production with lower profit margins.