China, Japan and South Korea can find ways to coexist peacefully

By: Azhar Azam

At a trilateral summit with Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk-yeol, Chinese Premier Li Qiang stressed that all three countries should regard each other as partners and oppose turning trade and economic issues into political or security matters.

The summit's restoration, after a four-year hiatus, holds great significance as the leaders agreed to speed up negotiations on a tripartite free trade agreement and boost people-to-people exchanges. They also reaffirmed support for an open, rules-based multilateral trading system, and expressed common interest and responsibility to maintain peace and prosperity in the region.

While the restart of the summit is itself significant, there is something of greater significance still. The leaders expressed willingness to refocus on dialogue and communication to push collaboration on issues from trade to climate change. In addition, Yoon commented that "our three countries…this year will join forces to contribute to peace and prosperity" and Kishida acknowledged that all of them "share a great responsibility for peace and prosperity in the region." This indicates the summit has made a great leap forward to navigate tensions and derive consensus on the economy.

China, Japan and South Korea are deeply linked in a cultural and economic relationship. Together they account for about 25 percent of the global GDP. China was the biggest trading partner of Japan and South Korealast year and one of their most important investment partners.

This despite the U.S. intensifying pressure on them to scale back their ties with the world's second largest economy. This bond urges the three countries to increase engagement to maintain regional peace and double down on economic growth and people's prosperity.

The Trilateral Cooperation Secretariat (TCS) – an institution established with a vision to promote lasting peace, common prosperity and shared culture among the three nations – is a vital forum to strengthen trilateral cooperation and achieve common objectives. According to the TCS, in 2022 the three countries combined accounted for 23.4 percent, 20 percent and 18.7 percent of the world GDP, population and trade respectively.

All three countries are also members of the Regional Comprehensive Economic Partnership trade treaty, which plays a crucial role in unlocking significant resources for trade and investment and fostering dynamic regional and global value chain activities.

The summit comes amid Washington's attempts to stoke tensions in the region by forging a NATO-like trilateral security alliance.

This military partnership to strengthen "joint response capabilities" to combat alleged threats from the Democratic People's Republic of Korea could be counterproductive, inducing Pyongyang to upgrade its nuclear and missile arsenal and weakening the fundamental objective of denuclearization of the Korean Peninsula. It could also provoke China, raising the threshold of risk across the region.

Such blocs also have conflicting prnciples like the "America First" and "Korea First" policies of the respective countries that prioritize national interest over alliance-based cooperation. Japan's inspiration from NATO, with Shinzo Abe during his tenure as prime minister in 2015 reinterpreting the country's law to allow "collective national-defense," permitting deployment of troops abroad, has put regional peace and prosperity at risk.

Japan's characterization of China as "a matter of serious concern" in its national security strategy, actions to complement the U.S. policy on trying to contain China, its recent defense and security cooperation with America, and Kishida labeling China as "the greatest strategic challenge" too do not augur well for Kisida's own ambition to safeguard peace and prosperity in the Asia-Pacific.

Due to these inherent complexities, Kishida's defense expansion drive and the war summit with U.S. President Joe Biden met with a sharp rebuke from the Japanese people, opposition and media, which believe that he is overly aligned with America, ignoring Japan's close economic ties with China.

Even in the U.S., it's feared that the rising political uncertainty in Japan could erode the Japan-U.S. alliance, the cornerstone of Tokyo's national security policy. A potential volcanic change of administration in the U.S. and the Kishida government's dismal approval rating further threaten to impact this partnership.

Tokyo's shift from a pacific to an aggressive approach has cost Japan. Negative growth (-0.8 percent), a weakened yen, accusations of economic mismanagement, and inflation exceeding the target for the 25th consecutive month continue to hobble Japan's economy. After falling behind Germany, it is set to concede the crown of the world's fourth largest economy to India in 2025.

China's emergence as a geostrategic reality, its economic rise, importance as a key player and active role in regional and global architecture, as well as its contribution to Asian and international growth is a testimony to its peaceful ambitions, belief in dialogue to fix disputes, and willingness to share the benefits of its growth with all countries.

According to Nikkei, the real growth rate in Japan and South Korea has been lackluster for more than a decade. Even as trade and geopolitical tensions escalate between Beijing and Washington, Tokyo and Seoul are not in a position to "sever economic ties" with Beijing.

Last year, South Korea saw its growth rate drop below Japan's for the first time in 25 years; Japan's real growth averaged just 0.7 percent between 2000 and 2022. China's per capita GDP, which as per the World Bank has risen over the past three decades more than 30 times, and GDP expansion of 5.3 percent in the first quarter of 2024 offer the world an opportunity to take advantage of Chinese affluence and economic rebound.

Given that all three countries are economically interdependent and confront common challenges, non-cooperation is not an option as it may lead to stunted growth in the troika and the region. It's therefore critical for them to prevent getting caught in the turbulent U.S. agenda and avoid misunderstandings and challenging each other's sovereignty. They should continue dialogue to find ways of cooperation and coexistence to jointly contribute to peace and prosperity.

*My article that first appeared at CGTN:

China's transition from high-speed to high-quality growth

By: Azhar Azam

China's economy continues to maintain a stable, high-quality growth momentum as value-added industrial output, the service sector, particularly information transmission and software and information technology services, consumption, high-tech manufacturing, fixed asset investment and trade generally posted healthy growth rates, data released on May 17 by China's Bureau of Statistics for April showed.

Many leading analysts and economists too have a strong belief in the Chinese economic strength as they reject the delusion that China's economy has reached its peak, arguing that it makes little sense in today's interconnected world. The world's second largest economy is facing some headwinds, primarily created by the U.S. and over certain property market challenges and the global economic slowdown, but it's capable of overcoming them and sustaining growth.

Rejecting the concept, a recent article in the Financial Times commented that although China's stock market took a battering, neither should this phase be categorized as "crisis" nor should the growth potential of the Chinese domestic market – "one arguably too big to ignore" – be written off, anticipating that "perhaps only China is 'the next China.'" Noting the private investments in artificial intelligence and the impressive progress in industrial robot installations and innovation, the report stressed that China, though still going through a major transition, had taken measures to stabilize the market and restore investor confidence.

Following its transformation into the "world factory" and experiencing the rapid urbanization in the past decades, which has enabled China to post miraculous growth rates in modern history for years – the Chinese economy is navigating a great transition, anchored in consumption-led, value-added, technology-driven, green and high-quality growth.

Higher reliance on domestic consumption, accounting for 73.7 percent of the country's economic growth in the first quarter of 2024, is a key feature and the strongest driver of China's economy and high-quality growth. Surging retail, foodservice and automotive sales and luxury spending, robust recovery of the hospitality sector, a steady increase in income, decline in urban unemployment, and the emergence of new patterns of consumption indicates efforts to boost people's spending power and pursue high-quality growth including strong policies to drive efficiency in innovation-driven economy.

Speaking in a recent session at the World Economic Forum in Davos, Australia's ambassador to the U.S. Kevin Rudd emphatically described the "core fact" that Chinese consumers were the best guarantor of China's economic future: "Remember, the scale of the Chinese consumer market is unprecedented in global economic history. I don't accept 'peak China' at all. I think it's intellectually and analytically flawed because of the untapped potential of Chinese consumer demand."

Writing in Foreign Affairs magazine, Peterson Institute's senior fellow Nicholas Lardy earlier dismissed the flippant perception of "peak China" that underestimates the resilience of China's economy. China had overcome even greater challenges when it started the economic reforms in the late 1970s, he said, rebuffing the view of weakened household income and weak consumer spending confidence as China's real per capita consumption in 2022 (9 percent) when the country was severely impacted by the COVID-19 pandemic, climbed to 9 percent compared to the increase to 6 percent in real per capita income, which meant consumer confidence was high as households were willing to curtail their savings and ratchet up consumption.

The detractors – believing China's economic or financial collapse is imminent and the day of reckoning has eventually arrived and expecting the Chinese economy to slump, collapse, fail, or have a miserable year – are wrong, given that real estate did not spark a contagious wave of bank failures. And new housing projects, growing income and rising domestic sales, spending and electricity usage, among others, will invigorate China's domestic consumption.

While sectors like technology platforms, electric vehicles, green energy and electronics will remain the vibrant sources of China's innovation and growth – new quality productive forces, focusing on innovative techniques and technology breakthroughs to spur high-quality all-round development, China's contribution to three-fifths of the world's total renewable capacity and production of almost all of the world's equipment to make solar panels are ensuring that the Chinese economy continues to make a rapid transition.

Goldman Sachs and Morgan Stanley recently upgraded China's economic outlook, citing an increase in factory activity and exports. With the exports rebound showing a bright spot and China's measures encouraging families to buy homes leading to momentum, the country is gradually overcoming challenges.

After years of high growth, China is now in the process of creating a new growth pattern, aimed at accelerating high-quality development. This transition from high-speed to high-quality growth isn't easy. As International Monetary Fund Managing Director Kristalina Georgieva said, it's the "right fork in the road to take." China is determined to blaze the trail and turn itself into "the next China."

*My article that first appeared in CGTN:

Chinese EVs and battle against transport emissions

By: Azhar Azam

After the US announced to quadruple tariffs on the Chinese electrical vehicles (EVs), leaders of the European Union (EU) are expressing their deep reservations about possible European duties on EVs from China, urging the bloc not to undermine these “entanglements” and exchanges.”

German Chancellor Olaf Scholz said Tuesday “At present anyway, 50% of imports of electric vehicles (EVs) from China come from Western brands that produce there themselves and import them to Europe.” Sweden’s Prime Minister Ulf Kristersson echoed his stance, "As far as tariffs are concerned, we are in agreement that it is a bad idea to dismantle global trade."

Brussels’ anti-subsidy investigation into EV imports from China earlier faced pushback from leading European carmakers. In a blatant warning, top executives of BMW, Mercedes-Benz and Volkswagen shared their concerns about such restrictions on their key market, stressing this could upend the bloc’s Green Deal plan and adding Brussels could “very quickly shoot” itself in the foot for these measures would put a drag on bloc’s ambition of developing a technology to cut CO2 emissions.

China leads the industry, thanks to its early measures to transform the EV sector. Beijing actively promoted the adoption of EVs nationwide, created a favorable environment, courted large companies such as Tesla to build production facilities in China and handed out similar subsidies to foreign companies, it gave to domestic firms. This drove Chinese companies into more quality and technology competition and boosted China as one of the world leaders in climate policy.

With tariffs on Chinese EVs, the EU climate neutrality target, centering on cutting road transport emissions by 2035, will be at risk. A decline of 11.3% in battery-EV registrations in March and further contraction of their share from 13.9% to 13%, per the European Automobile Manufacturers Association, evokes skepticism about the largest European carmakers' ability to advance the bloc's climate agenda by boosting sales of battery rides without China.

According to the International Energy Agency (IEA), China in 2022 was by far the leader in global EV sales, accounting for 60% of the total volume. More than half of the EVs on roads worldwide were in China; Western carmakers such as Tesla and Renault contributed more than half of the bloc's imports from China. Tariffs will break the momentum of fast-growing EV demand, which could help cut emissions of about 700Mt CO2-equivalents.

Average EV price in Europe (and the US) is very high, roughly double (€65,000) the cost in China. With many European consumers not ready to shift away from the combustion engines, duties won't make the domestic manufacturers competitive but will certainly slow the embrace of the EVs, thwarting the EU climate goals. Analysts too doubt whether Europe could ditch combustion engines without China whose technology is a notch above Europe including in developing software capabilities.

These intrinsic challenges are driving the European automakers to reconsider their approach and benefit from China’s expertise in producing cheaper batteries and affordable EVs. While Stellantis last year signed a preliminary agreement with China’s Contemporary Amperex Technology Limited (CATL) to construct a EV battery plant in Europe, the Franco-Italian carmaker has unveiled plan to sell Chinese LeapMotors’ EVs under a joint venture across nine European countries.

EVs are a godsend to the world for its huge potential to reduce transport emissions, which according to the UN accounts for a quarter of total greenhouse gas emissions with 95% of the energy being derived from fossil fuels. If countries carry through their stated energy and climate policies, the rapid uptake of all types of EVs, per IEA, could avoid six million barrels per day (mb/d) of oil demand in 2030 and 10mb/d in 2035, equivalent to the amount of oil used for road transport in the US.

A research by the American Lung Association further estimates that zero-emission EVs by 2050 could protect millions of pediatric respiratory attacks and generate $1.2 trillion in health benefits alone in the US other than reducing 8.8 million deaths due to air pollution globally. Given transport in Europe and America represents almost a quarter and 28% emissions respectively, this underlines the need of making this sector an avenue of global cooperation rather than an apple of discord.

Observers, alleging China of becoming an EV powerhouse overnight and taking over the industry, too acknowledge the Chinese EVs are "full of high-tech" and "innovative new features" as well as dirt cheap, prodding their manufacturers to learn from China. But the fear of another “China shock” is holding them back from supporting cooperation to slash transport emissions.

For decades, Europe’s combustion cars controlled the Chinese auto market; as sides began to transpose, the EU is suddenly resorting to tariffs. As Brussels has made progress in cutting emissions in all but the transport sector with most conventional cars still emitting as much CO2 as 12 years ago, it should avoid following Washington's protectionist and shortsighted approach and support EV cooperation to cut its own and global transport emissions.

*My article that first appeared in the Express Tribune:

Hungary metamorphosing into an EV powerhouse

By: Azhar Azam

Hungarian Prime Minister Victor Orbán too is a known supporter of peace, development and cooperation and decrier of efforts to divide the world in economic and political blocs. During the BRI summit last year, he stressed that Hungary was one of the “proponents of connectivity” and rejected the policy such as decoupling and de-risking for it “promotes blocs,” citing his country as an example where division of the world into blocs had undermined competitiveness and left it behind in technological race.

As Chinese President Xi Jinping arrived in Europe, Budapest underscored its development vision – what Orbán calls the “Hussar Cut,” a foreign policy that prioritizes global connectivity and rejects economic isolation, allowing it skyrocket the GDP per capita by 38% in 13 years – to the European Union (EU), urging Brussels to adopt this strategy and become strong again while warning it against the dangers of bloc formation.

China has played a key role in Hungary’s development. For instance, the Budapest-Belgrade railway, a benchmark infrastructure project under the BRI, will drastically reduce travel time between Hungary and Serbia. Agreements under the BRI will further modernize the Hungarian infrastructure as Budapest highlighted the start of preparations for several projects including charging points of electric vehicles.

Bilateral China-Hungary has reached $12 billion; Beijing is one of the leading investors in Budapest, implementing various projects across the country. There are more than €16.4 billion worth of investment projects being undertaken by China in Hungary. Once those factories are completed, they will create some 25,000 high-tech and make a big impact on its economy and high-quality development.

Hungary has made EVs as the lifeblood of its economic strategy, attracting envy of its fellow EU states. Through his “opening to the East,” Orbán seeks to develop strong relations with China to drive growth in the electric transition of Hungary’s automotive industry by harnessing the Chinese leadership in the development of EVs and batteries.

In 2022, China’s Contemporary Amperex Technology Limited (CATL) announced to make its biggest overseas investment of €7.3 billion to build Europe’s largest EV battery plant in Hungary. Once completed, the game-changing and environmentally sustainable project would make cells and modules for car makers such as Mercedes-Benz, BMW, Stellantis and Volkswagen, generating 9,000 jobs.

The Chinese giant has also been bringing cutting-edge technologies to the European heart, Germany. The localization of its innovative battery technology is strengthening Europe’s EV industry and helping its counterparts to become more competitive through production of cheaper batteries, crucial to developing affordable EVs.

Last year, Stellantis revealed its plan to construct an EV battery plant with CATL, signing a preliminary agreement. The Franco-Italian carmaker has bought 20% stakes in China’s LeapMotor, obtaining the rights of export, sale and manufacturing of the Chinese company’s high-tech, cost-efficient products outside China. The group is also reportedly considering producing LeapMotor cars in Italy to increase the Italian EV production to one million by the end of the decade.

China’s BYD in December laid out its plan to build an EV manufacturing plant in Hungry. The company’s first passenger car facility in Europe will incorporate the most advanced technology, bringing billions in euros and thousands of jobs to the country. In Budapest, one of the most important investments in Hungary’s history is seen as a consequence of yearslong strategic partnership with Beijing and efforts to bet against decoupling and de-risking.

Brussels' China policy is even facing a pushback from its leading EV manufacturers. In a latest warning, top executives of BMW, Mercedes-Benz and Volkswagen shared their strong concerns about such restrictions on their key market, stressing this could upend the bloc’s Green Deal plan.

"There will be no single car in the EU without components from China," BMW CEO Oliver Zipse said, adding Brussels could “very quickly shoot” itself in the foot for these measures not only would also put a drag on bloc’s ambition to cut CO2 emissions but could also leave the EU behind in technological race of EV development, undermining its own automakers' competitiveness.

While Hungary’s policy of snubbing bloc formation, improving connectivity, supporting economic inclusion and endorsing China’s Ukraine peace plan has enabled it to successfully manage the great power competition, Budapest's approach to revolutionize its EV sector by leveraging the Chinese technology serves a model for other countries to carefully manage their relations with major powers to push forward their technological ambitions.

*My article that first appeared in the Express Tribune:

China-France cooperation: Jointly ushering in a new era

By: Azhar Azam

Chinese President Xi Jinping on May 6 delivered a speech at the closing ceremony of the Sixth Meeting of the China-France Business Council with the theme of "Building on Past Achievements to Jointly Usher in a New Era in China-France Cooperation."

He stressed that China is willing to engage in close, comprehensive communication and cooperation with France, to elevate bilateral relations to a higher level and achieve greater accomplishments.

Since France's recognition of China on January 27, 1964, relations between the two sides have generally been stable and growing steadily, raising the level of the "global strategic partnership" since 2004.

From a strategic perspective, the two countries have been engaged in a strategic dialogue that began in 2001, covering all areas of cooperation, including reforming global governance, climate change and regional crises. In contrast to the U.S., whose approach toward China is deliberately offensive, and which expects its allies to do so, Paris follows an independent foreign policy and is pursuing an economic and strategic alignment with Beijing.

As President Xi said "as one of the earliest participants in China's reform and opening-up, France has contributed to China's modernization drive and benefited from it. Deeper friendship calls for frequent exchanges and closer cooperation." France is China's third largest trading partner and China is the third largest source of real investment in the European Union (EU). France is China's largest trading partner in Asia and seventh largest in the world.

China and France have reached several economic and financial agreements. For instance, at the ninth China-France High-Level Economic and Financial Dialogue in July of 2023, they agreed to adopt a joint approach on multilateral and global challenges and accelerate international economic recovery, reaffirmed their willingness to push quality and sustainable infrastructure investment and made a commitment to advance cooperation on climate change, biodiversity conservation, multilateralism and facilitating bilateral trade, among others.

In defiance of the U.S.-led decoupling strategy, France has been looking to strengthen relations with China. During his visit to Beijing in April, French Foreign Minister Stephane Sejourne clearly expressed the French desire not to decouple from China, seeking to rebalance the economic partnership, echoing French President Emmanuel Macron's stance last April that warned Europe of reducing trade and diplomatic ties with the world's second largest economy, seen as denunciation of decoupling as a trap.

Macron is very much vocal in his criticism of the U.S. and his support of European strategic autonomy. Washington "has two priorities. The U.S. first, and that is legitimate, and the China issue, second. And the European issue is not a geopolitical priority for the coming years and decades," he said, reiterating his call that the EU should never be a "vassal" of the U.S.

This is precisely the view most Europeans share. A multi-country poll by the European Council on Foreign Relations last year found that 74 percent of Europeans wanted to see the bloc less dependent on America's security guarantees and become self-reliant in foreign policy. Contrary to the EU de-risking approach, Europeans were reluctant to "de-risk" or decouple from China too.

The Elysée Palace seeks to slash its trade deficit with Beijing; and the gap is gradually narrowing as China's imports from France, as reported by Chinese customs, increased 5.5 percent in 2023. China's imports of French agricultural products for 2023 jumped 50.5 percent from 2019; and its consumer goods imports from Paris grew 12.3 percent annually over the last five years.

More and more French companies see China as a lucrative market as the Chinese government continues to address their concerns. Surveys showed profits of over half of the firms either increased or stabilized, and they were expecting better results in 2024 given they were optimistic about Beijing's economic growth in the next three years.

China – estimated to account for a quarter, nearly a third and around two-fifths of global cloth sales, jewelry and handbags, and cars respectively, as well as the largest market for machine tools and chemicals – is a big market of 1.4 billion people. Not only large but mid-sized and small and medium enterprises too have succeeded in China and there is great potential for them to capitalize on the country's new economic priorities and growing middle class and excel in areas such as consumer goods, agri-food, beauty and luxury products, health, innovative technologies and cultural and creative industries.

The China-France relationship has a long history with French companies getting involved very early on in iconic projects and with more than 2,000 operating in China. France's cultural and educational network across China and celebration of 2024 as the China-France Year of Cultural Tourism will solidify the relationship and people-to-people exchanges.

As two countries commemorate the 60th anniversary of their diplomatic ties, President Xi's visit to Paris, supplemented by a compelling chemistry between the two leaders, will inject far more impetus to the bilateral relationship.

By addressing rare differences, deepening existing and exploring new avenues of cooperation, a solid Beijing-Paris strategic partnership could also help de-risk the world from intense economic and security challenges and give a new vision of a peaceful, multilateral and economically rising world.

*My article that first appeared at the CGTN:

Trade war hurting Americans and fuelling geopolitical tensions

By: Azhar Azam

(axar.axam@gmail.com)

When the US Secretary of State Anthony Blinken visited China last year to “stabilize” the relationship between the two superpowers, strengthen high-level channels of communication, explore areas of cooperation and align China on shared transnational challenges – he gained the Chinese support on “all of that.”

His efforts soon panned out into a historic in-person Xi-Biden meeting – touted by the US President as “some of the most constructive and productive discussions we’ve had” – as China agreed to the longtime US demand of restoring military-to-military communication and curbing the production of fentanyl precursors.

As the Biden administration tries to manage differences, it is critical for Beijing and Washington to jump-start constructive and meaningful dialogue on trade and economy, in particular tariffs on each other’s goods that are hurting people and companies across the two countries.

Over the years, a bolshie policy of the past and current US administration has pushed America and China to an endless odyssey of economic rivalry, fearing Beijing in near-term could catch up or surpass Washington in economy and technology. In its insatiable quest for global economic and tech supremacy, America is deploying all tools to prevent this from happening through tariffs, sanctions, export and investment controls and restrictions of advanced chips exports.

This stubborn approach is hurting Americans and the US economy. For instance, most tariffs on goods from China are still in effect, inflicting significant harms to the US consumers, businesses and manufacturing competitiveness. The Section 301 and 232 tariffs on Chinese steel and aluminum as well as March 2024 petition to address China's shipping and shipbuilding practices continue to undermine the country's image as a champion of free trade, conceding more moral weight to China internationally.

According to the Tax Foundation, a vast majority of the increase in US tax collection ($211 billion of $233 billion) came from the Section 301 tariffs on China. These taxes were paid by Americans. Biden during his election campaign himself had acknowledged this fact, blaming Trump's tariffs for saddling Americans consumers, farmers and companies.

An early, promising completion of the US Trade Representative (USTR) review of the China tariffs could provide a relief to consumers and importers; it would also end uncertainty in the China-US relations, making a positive impact on the international economy. An average approval rate of 35% by the USTR, allowing imports from China in a couple of categories, is self-evident that this cannot be decoupled.

One of the major US concerns is its trade deficit with China. Even as America’s trade gap with China dropped by $102.9 billion to $279.4 billion, its deficit with Mexico surged with Mexico $21.9 billion to $152.4 billion. The data supports Xeneta's analysis that the Chinese firms were potentially rerouting its exports into the US through Mexico to circumvent the tariffs, weakening the US leverage in talks with China on economy and trade issues.

The Financial Times' analysis of the leading freight benchmarking firm further suggests Mexico is turning into a regional hub for Chinese companies for exports to the US. “Reducing reliance on China is an easy soundbite for politicians, but the reality is very different,” Erik Devetak, Xeneta's chief product and data officer, told the British daily. A BBC report also underscores how countless Chinese companies were relocating industrial parks in Mexico to bring production to the country to avoid US tariffs. Rather than the US, third countries such as Vietnam and Malaysia continue to reap benefits from the trade war.

A CATO Institute’s study recently concluded that irrespective of this being a problem, tariffs were not a "valid solution." Higher tariffs aren't either as they would drive Chinese companies to shift production to other states or cost $31 billion to American consumers, per the National Retail Foundation, and cut the US GDP by 0.5%, according to Bloomberg. Biden's plea to triple the tariff on steel and aluminum from China to appease the politically powerful steel industry and ban TikTok could help him charge his election campaign; it won't support his mission to stabilize the China-US relationship.

Before the tariff war, China was the fastest growing large market for the US. But retaliatory duties have positioned the US exporters, relying on Chinese components, at a huge disadvantage against competitors. Tariffs tend to heat up corruption, protectionism and appreciate the value of the US dollar, chastising the US manufacturers in terms of lower sales and profits.

China in the middle of the property crisis in Q1-2024 posted a strong growth of 5.3%, official data showed. The International Monetary Fund last year saw Beijing as the world's leading growth driver for the next five years; it retained its forecast this year, expecting the Middle Kingdom to remain the top contributor to global growth.

According to the US-China Business Council's recent report, exports to China in 2023 fell 4.3% to $144.9 billion; China remains an important market for American companies, supporting about one million jobs in the US. Further tariff spat between Beijing and Washington, it warned, could make other countries more competitive amid geopolitical tensions and economic slowdowns.

With a lot of restrictions already in place on China and military assistance of $61bn for Ukraine, $26bn for Israel to escalate the Israeli brutality against Palestinians and $8bn to “counter communist China,” in the Indo-Pacific, neither Washington can boast of supporting peace and standing up for human rights nor it could come out clean of fueling wars and conflicts.

On one side, America is mercilessly pouring American taxpayers' money to aid its military-industrial complex at the cost of human lives and on the other, the US government is making their and American companies' survival more difficult by threatening to wage a new barrage of tariffs, which will be potentially diverted to support Israel and counter China and Russia.

Experts agree tariffs could have unintended consequences for American consumers, companies and GDP, stating tax hikes as a “stopgap” measure to rein in overcapacity. Removal of bilateral tariffs would curtail America's ability to channel funds for its strategic objectives: they will slash inflation, create more jobs, eliminate shortage of goods, increase economic output and reduce geopolitical tensions. The US should opt for the latter.

*My article (unedited) that first appeared in the Express Tribune: