- President Donald Trump’s approach to American-Chinese trade was to impose prohibitive prices. While he has just given key technological imports a temporary stay, the rest of the Chinese producers still face 145%tariffs. But if Trump wants to slow down the technological progress of China, it is the opposite of what he should do, says an economist.
President Donald Trump’s out -of -success rates took the world economy during a crazy race, but China was its main target and faces prohibitive duties.
While it has just given imports of key technologies a temporary stay, the rest of the Chinese producers still face 145%prices, which means that toys, clothes and current furniture will have to find new buyers.
The White House has indicated that the narrowing of the American-Chinese trade deficit and the manufacturing of manufacturing are the main objectives. But if he wants to slow down the technological progress of China and ensure that the United States is dominant, then the administration must adopt a totally different approach, according to Keyu Jin, associate professor of economics at the London School of Economics and author ofThe new game book in China.
In a OP-ED in the Financial time On Thursday, she noted that technological jumps are often emerging during conflict and that Trump’s trade war could ignite a wave of innovation.
“Prices do not only change trade flows – they redirect resources and reshape industrial structures,” wrote Jin. “If Trump’s objective was to limit the technological progress of China, he would keep low prices on most of the Chinese exports to the United States, locking the country in low margin manufacturing. It would encourage high-tech exports to China, ensuring that progress in its advanced component stands.”
But instead of American exports to find an easier way to the Chinese markets, they will hit a wall. Trump’s prices have encountered similar reprisals, China imposed duties of 125% in the United States.
At such levels, opposite tasks would cause trade between the two largest economies in the world to virtual stop.
Jin predicted that the shock of Trump’s trade war will push China to divert more resources in advanced value of higher value that compete with American products.
“Beijing has drawn its conclusion: innovation and basic technology control are the only sustainable defense against prices,” she said. “Companies with proprietary technology – like Huawei and BYD – are more isolated from supply chain rates and shocks. China is considering a new technology supply chain model: regional production, technology sovereignty and global redundancy of the supply chain.”
Admittedly, other experts have noted that the flow of exports that came out of China has massively disrupted world trade and economies around the world.
And even before the last trade war, the Biden administration continued the prices in China that Trump imposed during his first administration. He has also added restrictions on American technological exports such as the most upscale chips of NVIDIA to limit the progress of China in the area such as artificial intelligence, which could tip the balance of military prowess.
But such sanctions are simply reached at the request of American supplies, and the manufacturers of national Chinese fleas report record income and reinvest in R&D, said Jin.
She also pointed out that Deepseek of China, which shocked technological industry earlier this year with its low -cost AI model which was comparable to American versions, was “born under constraint”. Meanwhile, Beijing also targets photonic quantum IT, low orbit satellites and breakthroughs in the master’s equipment in tokens while directing factory robots.
Since Trump’s prices, Chinese companies have extended to other world markets, including Africa. And they have an important place to develop beyond manufacturing by providing more digital services and infrastructure, Jin said.
In parallel with Napoleon’s commercial embargo in Great Britain in the early 1800s, she argued that it had prompted the British to turn to Asia, Africa and the Americas while attaching more industrialization.
“The United States can repeat this error. If America is reinforced again, Trump should not fear a comfortable China; it should fear a constraint,” said Jin.
This story was initially presented on Fortune.com
