Tariffs, Technology, and Global Alliances in the Battle for Economic Supremacy
AS THE TARIFF war against almost the entire world—led by China, Mexico, Canada, and India—heats up, it portrays the leading hero, Trump in this case, frothing at the mouth, cursing, and cussing everyone if he does not get what he wants. This presents a completely new and unacceptable face of American democracy and diplomacy.
Accusations and counter-accusations are flying around, but the optics are definitely working against Donald Trump. If only he had described the tariff war against China as a war against drugs, he might have been able to garner much more sympathy.
Instead, he has chosen to restrict the transfer of technology to China and curtail its capacity to dominate the world’s chip and supercomputer technology industries.
The recent cumulative 20% tax on all Chinese goods comes on top of a slew of tariffs Trump imposed in his first term on tens of billions of dollars’ worth of Chinese imports.
Currently, countering those earlier tariffs imposed during Trump 1.0, China already has a counter-strategy in place, which had started yielding results then and continues to do so now.
By 2024, Beijing had blocked exports to the US of critical minerals used to make chips, restricted the supply chain for US-made drones, threatened to blacklist a prominent US clothing company, and launched an antitrust investigation into Nvidia. By taking these actions, Beijing demonstrated its capabilities to withstand American pressure.
Moreover, now Xi has warned the US that it is ready to fight “any type” of war as it retaliates against mounting US trade tariffs while simultaneously increasing military spending.
Trump has justified fresh tariffs on Chinese goods by blaming Beijing for the Fentanyl opioid crisis in the US, claiming that a “large percentage” of these deadly substances are made in China. In its defense, China has accused the White House of “blackmail” over the tariff hike, asserting that it has some of the world’s toughest anti-drug policies.
In his address to a joint session of the US Congress, Trump claimed that other countries have used tariffs against the US for decades. “Now it’s our turn to start using them against those other countries. On average, the European Union, China, Brazil, India, Mexico, and Canada … and countless other nations charge us tremendously higher tariffs than we charge them. It’s very unfair,” the president said.
This statement came within minutes of a new 10% US levy on Chinese imports that took effect on Tuesday (March 4), adding to existing tariffs from both Trump’s first term and those announced last month.
Meanwhile, as mentioned earlier, China had already begun taking preventive measures. Since 2023, Beijing has initiated fiscal and monetary stimulus to support businesses and, subsequently, consumers. These measures generated some positive results as banks and financial institutions, instead of supporting the real estate trade and ventures, diversified their lending toward industry and innovation. This shift was clearly necessary, but its scope and nature were also developed with a potential trade war in mind.
In fact, China had begun transitioning from a garments and footwear manufacturer to an advanced tech hub—focusing on robotics and artificial intelligence (AI)—long before Trump became president. This shift has given China an “early mover” advantage, not to mention the scale of production that comes with being the world’s second-largest economy.
Indeed, Chinese factories can produce high-end technology in large quantities at low costs—not merely due to cheap labor but by leveraging economies of scale.
Additionally, Beijing has focused on expanding economic ties globally while also announcing unilateral reductions in tariffs on imports from non-US partners. During his visit to Peru, Xi inaugurated a deep-water port that could reshape China’s trade with Latin America—a key non-US source of food, energy, and minerals.
This marks the second round of tariffs the two countries have imposed on each other since February. However, this time, China is targeting Donald Trump where it could hurt the most—by focusing on farmers, who are some of his core supporters.
China is one of the biggest US customers for chicken, beef, pork, and soybeans. Now, all these products will face a 10–15% tax, effective from today (March 10).
Beijing may hope that this move will apply pressure on the Trump administration ahead of any potential negotiations.
The latest announcements raise the prospect of an all-out trade war between the world’s top two economies. However, in various foreign ministry statements, China has made two things very clear.
Firstly, it is prepared to continue fighting. “Pressure, coercion, and threats are not the right way to deal with the Chinese side,” said Foreign Ministry spokesman Lin Jian.
Secondly, it is also willing to talk. Beijing is not escalating rhetoric or tariffs in the same manner it did in 2018, during the last Trump administration—although, back then, it imposed a 25% tariff on US soybeans.
Experts say Xi Jinping has left the door open for negotiations, but when these talks will take place remains uncertain.
Furthermore, unlike Canada and Mexico, Beijing has not announced new measures to target Fentanyl. Last week, the Chinese State Council released a White Paper titled Controlling Fentanyl-Related Substances: China’s Contribution.
The document outlines the measures Beijing says it has already implemented to crack down on Fentanyl-related crimes and the precursor chemicals used to manufacture the drug. It adds that China is “diligently fulfilling international drug control obligations.”
Despite stating that China “will not yield,” these latest tariffs are bound to sting. At the same time, the Chinese Commerce Ministry has reiterated that it is prepared to work with other countries worldwide to counter Trump’s tariffs.
Beijing appears to be seeking potential allies in this trade war while also portraying Washington as a troublemaker willing to target both friends and foes alike. 
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Asad Mirza
The author is a New Delhi-based senior commentator on national and international affairs, defence and strategic issues, and environmental concerns. He is also an interfaith practitioner and a media consultant. Previously, he was associated with the BBC Urdu Service and the Khaleej Times in Dubai.
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