Tag: Trump

For Whoever Controls Rare Minerals, Shall Inherit the Earth: US-China Trade War Chapter 2 Verse 1

Posted on By Moshi Isreal

For centuries, humankind has fought wars over oil, land and faith. The wars of today and perhaps the future will be about who controls the jewels of the earth, those rare earth minerals that power our age. They are in our chips, batteries, satellites, and missiles. For many countries, these elements power the very systems that guarantee their dominance. At the center of this struggle, stands the world’s largest economies, the United States and China. How this contest unfolds will depend not on bullying, threats and blackmail but on diplomacy, tact and compromise.

The second chapter of the U.S-China trade war kicked off with a bang. China fired a warning shot that has quite literally left the ground shaking. According to Aljazeera, China announced export controls on five more rare-earth metals- Holmium, erbium, thulium, europium and ytterbium adding to earlier restrictions on samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. Alongside these, China also restricted the export of specialist technological equipment used to refine rare earth metals. Foreign entities will now have to obtain special government approvals if they wish to export any material that contain at least 0.1 percent heavy rare earth metals from China.

As expected, the move left Washington fuming. Donald Trump took to the socials to vent his frustration, threatening 100% tariffs on Chinese exports and new export controls on critical software. The self-styled ‘king of tariffs’ went even further by questioning the importance of his highly anticipated meeting with President Xi during the Asian Pacific Economic Cooperation Summit (APEC) in South Korea later this month. Global markets and policy makers are again on tenterhooks, bracing for another phase of the largely damaging trade war between the world’s largest economies.

In this fog of trade-war, it is important to separate facts from fiction. Despite the supposed truce between both countries, the United States has continued to blacklist Chinese firms and impose port fees on china-linked ships. The Trump administration has not shied away from referring to China as an enemy and demonizing it at every turn. Washington’s long-term objective is clear: to contain China and isolate it for the mere ‘crime’ of being too good a competitor. The U.S. cites its ‘national interests’ as justification for its actions against Beijing, half a world away. However, the question practically asks itself, if Washington can behave this way in the name of national security, what stops China from doing the same?

The export controls on rare earth minerals are an assertion of sovereignty and safeguarding national interests. Rare earth metals are not run-of-the mill goods of trade. They are the hidden backbone of advanced weaponry. These elements are critical in the production of fighter jets, Submarines, radar systems, missiles, drones, smart bombs and AI driven military systems. If anything, China has a stronger moral case: Its restrictions include exemptions for humanitarian and emergency uses such as medical and disaster relief.

The world must root for the Trump-Xi summit in South Korea to take place. The two most powerful leaders in the world need to sit down and talk. Dialogue, not ultimatums will resolve this contest. The United States should approach the table with some humility and respect for China’s national interests, something Beijing has consistently emphasized. For constructive international relations, respect for sovereignty, and the legitimate security concerns of other nations is an essential prerequisite. Trump’s approach of strong-arming countries into ‘deals’ will not work with China. Compromise grounded in mutual benefit is the only path forward. The President of the United States must have learned from his attempts to force India away from Russian oil that it simply does not work that way anymore. Instead, India has grown closer to China, a development that strengthens global stability but complicates Washington’s foreign policy objectives in the Indo-pacific.

China will approach this summit from a position of strength. It controls 90% of the world’s rare earth elements, dominates lithium-ion battery supply chains, and controls a vast network of mineral processing facilities that the West lacks both the capacity and the political will to replicate in the short term. Most importantly, Beijing has shown a willingness to engage in dialogue and compromise. The United States must come to terms with the fact that China is now a pace setter, a capable competitor unafraid to defend its national interests.

Perhaps the most significant outcome for the Global South and the rest of the world would be Washington’s recognition that Beijing has the potential to become an indispensable partner. This would open opportunities, to borrow from Trump’s signature turn of phrase “the likes of which the world has never seen before.” Now is a time for diplomacy and not war, for dialogue and not threats.

The Writer is a Senior Research Fellow at DWC.

 

 

ISRAEL-HAMAS DEAL: SHORT TERM FIXES TO EVADE PERMANENT SOLUTION

Posted on By Alan Collins Mpewo

The deal. One that has been of global interest, but not the deal the world has for decades sought – a permanent solution. War is cruel. The ultimate price has until 11th October, 2025, been paid. Death has been the final price paid for the decades Israel and Palestine have had a stand off. And what was thought would be a ‘mere’ weeks’ conflict, has dragged on for over 2 years. It is still thought by some observers that the war could be revived shortly after the call-off by the two adversaries. The number of children reported dead during the conflict have roughly been estimated beyond 20,000 children. More than 28,000 girls and women have been reported killed in the conflict coming to the ceasefire, while the numbers of men have by many observers ceased to count, and are only aggregated on percentage of the total deaths recorded – at approximately 40% of total deaths reported. The numbers matter. Yes they do because every life matters, and as such, it should be regrettable that the war ever happened. The ultimate price that is (has been) paid.

But in every war comes a victor. Not always, but mostly as history observes. And sometimes the victor is not the actual bearer of the primary loss. President Trump has a feast of the year 2025 to assert the heroics. “I delivered as promised.” He has been vocal since taking office for his Second Term as President of the United States of America about the subject of ‘war’. The Israel-Palestine conflict got high value in the White House ahead of the Russia-Ukraine war because of the obvious interests Washington under President Trump’s reign holds. It should not come as a surprise because it was not different from his first term. Israel has always been the infallible darling of the U.S. And while the world in recent months took steps of account towards the excesses of war such as South Africa’s claim against Israel in the International Court of Justice, the UN Human Rights Council sessions on the Gaza Question, and open calls by various States globally for an end of the assault occupation, much of it have received disregard from a U.S’s mouthpiece perspective.

The cease fire deal, now in effect, had at its centre, release of hostages that have been held by both sides. Thus the deal saw partial withdrawal of Israel’s forces from major areas such as the Rafa Border Crossing which will ease access to medical treatment on the Egyptian side for some casualties, and the access to humanitarian aid within the wrecked region. A sigh of relief perhaps, but for how long. The two-State solution as proposed decades ago has been maintained for some critics as the only longlasting solution. Indeed, a number of countries have in 2025, especially in Europe, declared total recognition of the Independent State of Palestine. On all occasions, even before the U.N, the U.S has either shown regret or exercised its veto right. One Country in the extreme parallel. Interests. So who are the winners?

Certainly after the first phase of the deal, the lingering question is “What does the future of Gaza look like? And who decides the future?” By now the short answers must already be clear. Coming this far, the shaping events have turned the eyes to the White House. It all got sealed by the bidding of Gaza to real estate conversations – a future likened to ‘paradise’. That will definitely not be received without resistance. The wider international community remains optimistic. In fact, even within Israel, protests have been reported of some sections of the country’s citizens that believe the war’s agenda was never as sold to them earlier. They call for a total end to the war. The winners? That is only a question that can be answered in time. The next phase of negotiations complicates the conversation more.

The solution of the Israel-Palestine question should not be a reserve of the very country that vetoed severally in the past efforts to straighten the situation by the wider international community. The solution is ultimately one that should lie to the member States of the U.N as a collective. Equal decision making. Equal bearing in the rebuilding. The U.S keeps steering away from engaging other States and as such, plays a part in the extension of the conflict. The whole idea has been to avoid the resurrection of the two-State  solution. Back door negotiations for example are neither going to answer the proposed terms of disarming Hamas, nor provide the leadership that is the imagination of the U.S in Gaza. Of course the desire of Israel is to fully alienate Gaza without question. But that will not come without resistence. It remains an unavoidable trip back to the U.N resolutions over time that have suggested interesting, but reasonable solutions. Without doing so, the U.S and Israel will only see themselves in an illusion as winners for a short time, but in reality, losers too for a long time.

The writer is a Senior Research Fellow, Development Watch Centre.

Russia-Ukraine Crisis: Trump-Putin Alaska Summit; Moscow’s Concerns are Legitimate 

Posted on By Musanjufu Benjamin Kavubu

The latest meeting between President Donald Trump of the United States of America and President Vladimir Putin of the Russian Federation, in what is now known as the Alaska summit, was costly because of the security logistical setup and the backstage diplomatic efforts that saw the event through, but didn’t yield much. The 2025 Alaska summit could be the start of a series of efforts that finally bring a freeze to the situation in Ukraine.

To understand why in the first place Russia initiated its special military operation in Ukraine we have to go back in time, we can even go back a thousand years, but today we shall dwell much on the last three decades, after the break up of the USSR in 1991. The USSR was a formation of a multiple ethnic states, that were called Republics, and Ukraine was one of them. It’s end is considered to be a geopolitical tragedy, and that is the view of the current Russian President.

Russia didn’t wake up and just decide to invade Ukraine in 2022, with no reason. For Moscow the move was very much about offensive realism which is basically the amassing of power and regional dominance because of the prevailing uncertainty and threats of an anarchic international system where survival of a given country is the most important thing. Russia is compelled to seek regional hegemony to ensure it’s safety, according to John Mearsheimer this is supposed to be a constant endvour of strategic miscalculations that will bring about conflict and war at certain points especially when great powers are involved. In this case it’s Russia on one side and the USA and it’s allies on the other.

Since the end of the Cold War three decades ago, Moscow views NATO’s eastward expansion as a real threat to its security, in the last decade and half, the political power centers in Kiev along with Washington and Brussels have been flirting about Ukraine joining the security organization which was a clear Red line for Russia, and they were not going to stand by as their core security interests were being teased. The provocation was an encroachment to Russia’s sphere of influence. It was uncalled for because after the end of the Cold war there is a promise in place that NATO never expands “one inch eastward.”

Russia is in Ukraine to protect the Russian speaking population, its no secret that there are neo-Nazi activities, during the conflict military units have come out with Nazi insignia and flags fighting on the side of Kiev. Russia accuses these groups of persecuting the Russian speaking population in the Donbas regions. The international community which is made up of the West took clear sides when it came to internal divisions within Ukraine, Washington supported Ukrainian speaking people and sidelined the other side an act that exacerbated the situation prompting Russia to come in and take its side.

According to Professor Jeffery Sachs Washington’s disdain for historical and cultural claims of the European plain made it clear that only a military act would make Russia’s point. For example Russia’s ties to Crimea which had been a Russian territory since 1783 and only transferred to the Ukraine Republic under the USSR as a symbolic move aimed at nation building in 1954. These historical nuances that were stubbornly ignored only fired up Russia for war.

For Russia, going to Ukraine is an act of resistance against Western unilateralism and Washington’s blunt imperialism. It’s one of the reasons even those that have taken a neutral position have a soft spot for Moscow. The West has consistently violated international norms from the far East in the case of China and Taiwan, to the Middle East when it comes to Iran, Iraq among others states. Washington thrives in overthrowing governments and while expanding military alliances at the same point ignoring regional powers like Russia, of course any country would react in a self interest manner.

The situation in Ukraine goes back years, it goes beyond 2014, when Russia decided to take back the home of its Black Sea fleet in Crimea, it’s strategic base for its naval power and the adjacent water ways that connects it to global trade. It goes beyond the 3 years of the full scale military operation, even the fall of the Soviet Union was just a flash point of previous centuries. It’s geopolitical and geoeconomic and that’s why it has led to several global shock waves that are being felt even as far here in Uganda. From February of 2022 the world has experienced shifts in alliances, here in Africa there is pressure to align with the West at a time when neutrality is very vital for peace.

Since Ukraine was a major global food basket, the war meant they had to halt agriculture and this has affected the world food security bring about shortages and price hikes, Western sanctions on Russia have had a ripple effect on the world energy markets taking that has resulted into higher fuel prices across the planet. Like any conflict there is a humanitarian and migration issue in Europe and because it’s affecting people with white skin, they have taken priority over others in conflict across the world.

Before this escalation Europe had not faced war at this scale since 1945, a disaster that had engulfed the whole world, that bit had ended and just like then, even this episode can end. If the West was pragmatic they could have avoided this all together. Professor Yanis Varoufakis has always suggested a Good Friday Agreement like mode for the Donbas with shared sovereignty and guarantees for both Russian and Ukraine speakers, he also in the past advocated for a neutral Ukraine under a UN backed treaty that may see peace keepers from countries like the UK and China maintain the agreed Red Lines.

Before 2014 if only the West was wise to halt the NATO expansion which is about buying American weapons, Respecting the Minsk Agreement that promoted the autonomy of the Danbas, if only the Washington through the CIA had avoided overthrowing Yanukovych which was a hostile move towards Russia. If only the West has seriously respected the diplomatic path to address Moscow’s legitimate grievances, the world would have never seen this disaster happening. In the event President Trump in his quest for a Nobel Peace prize managed to get a deal with his Russian counterpart it will be only on the grounds of Russia’s original Reasons for the escalation.

The writer is a research fellow at the Development Watch Centre

 

 

 

 

No Reason to Take Trump’s Claims About China’s Purported Violation of the Geneva Talks

Posted on By Joshua Kingdom

On 2nd June, China publicly responded for the first time to President Trump’s comments that Beijing was acting contrary to the agreement entered by the two countries in Geneva earlier last month. Beijing’s position was explained by the spokesperson of the country’s Ministry of Commerce (MoC), He Yongqian. Being that the pronouncements by the two parties are contradictory, it can be confusing to establish who has in fact conducted themselves improperly something that the rest of this OP-ED deals with.

To begin with, the language adopted by either administration tells a lot. On one hand, you have the MoC statement which is substantive in its claims and on the other, you have nothing but generic accusations. Specifically, Beijing pointed out that the US had despite the understanding between Secretary Scott Bessent and Vice Premier He Lifeng gone on to restrict the export of artificial intelligence chips and trade in chips with the Republic of China as well as revoking Chinese students visas among other measures. In the case of America however, Trade Representative Jamieson Greer could only afford to say that “United States did exactly what it was supposed to do, and the Chinese are slow rolling their compliance.”

One would have liked to say that Washington is treading carefully in the spirit of diplomacy except for the fact that the same leadership has not been known to act as such in recent months. They did not do so with Ukraine or South Africa so it would be a breakaway from a well-established pattern if they were to act differently in this case all over a sudden. Moreover, away from the fact that there has been no particular clarification on the facts, the rhetoric itself has been combative. In a “truth” that kicked off this whole controversy on Truth Social thus, Mr. Trump directly insinuated that it was to be expected that China would act dishonestly. His very words were; “China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!” If he had a bomb to drop, there is no doubt that he would have proceeded to do so without any hesitation.

But it is also not that the White House is causing upheaval for no reason, it is just that its rationales are petty and selfish to say the least. We know for instance, that the presiding Commander in Chief has been known to apportion blame to an other whenever things do not go his way with China famously occupying this position for most of the time. This time round, Congress has just passed a rather unpopular law which strips essential benefits from a good number of people that voted Republican in the previous elections and so he badly needed a distraction.

Another absurd but very real scenario is that Donald Trump has long portrayed himself as a deal-maker. Unfortunately for him, President Xi’s philosophy contradicts this stance since the Asian politician believes in systems. The result of this as Bert Hofman of the East Asian Institute at the National University of Singapore put it, has been that the Secretary General of the Chinese Communist Party (CCP) has kept a healthy distance from the trade war and instead encouraged in-line officials to spearhead the negotiation process to the frustration of his American counterpart.

By artificially manufacturing friction hence, the US hopes to catch Xi Jinping’s ear. No wonder, following these developments, USA bureaucrats have been pushing for a call with the CCP head. The irony of course, is that there was one such conversation on 17th January this year the theme of which laid the foundations for the Geneva talks i.e. the very talks that the United States of America is already going back on. Why pretend to care about the future whilst presently acting in bad faith then?

Honestly, this conduct is reflective of the usual bullying from the west that we are now accustomed to. The United States forgets though that the stakes are not in its favour on this one– and, Stephen Olson, a visiting fellow at the Yusof Ishak Institute agrees. By the time it awakens, things might be too little, too late.

The writer is a research fellow at the Sino-Uganda Research Centre.

Trump’s Trade Tariffs: A Gun That Turns On It’s Master

Posted on By Salim Abila Asuman

Image a tariff as a gun: and a man in the U.S. stands tall, calm and composed, with this polished gun in hand. He points it at his rivals, to intimidate, to demand respect, and to bend the room to his will. The barrel sunbeams under the light everyone watches. For a moment power seems to be his.

But then there is a truth about this gun, it is unpredictable. It jams, it misfires and sometimes in the tension of a standoff, it explodes backwards, tearing through the one who dared to wield it.

The U.S. government has recently drawn tariffs like weapons in a duel intended to shield domestic industries and frighten foreign competitors. But it forgets the recoil. Higher consumer prices, retaliatory trade wars, crippled exports, and suppressed supply chains these are the wreckages that fly back and dwell deep into the economy that pulls the trigger of a tariffs.

A tariff can look like strength. It can feel like control but history has shown us time and again that it is a dangerous tool, best admired from a distance because in the wrong hands, or even in the right ones but on the wrong day, it does not just miss the target. It turns and shots the shooter.

In 1930, amidst the Great Depression, the U.S. passed the Smoot-Hawley Tariff Act, slapping tariffs on over 20,000 imported goods to protect American jobs. Instead, it triggered a global trade war where countries retaliated, international trade collapsed by over 60% and American exports dried up. Far from a rescue plan, the Smoot-Hawley tariffs deepened the catastrophe it was meant to solve.

The U.S. has once more turned to a protectionism and still in the form of tariffs this time aimed at China again it is discovering that economic aggression invites economic retaliation.

The fact is that U.S. tariffs on Chinese goods do not hurt China as much as they hurt American shoppers. Several studies including from the Federal Reserve and Independent Economist in the past showed that more than 90% of tariffs costs were passed to U.S. consumers, driving up prices on essentials like electronics, machines, furniture and clothing.

China has responded to U.S. tariffs with its own hitting American agriculture, cars, and manufacturing. Because of this, exports from U.S. farmers and factory towns are going to take a serious hit and some industries are going to face double-digit losses in revenue.

Like most tariffs are, the U.S. tariffs on China are equally a short-term protection for vulnerable industries and shall stifle innovation by removing competitive pressure, instead of modernizing, industries in the U.S. are going to become dependent on political shielding.

Why China stands to win; unlike the U.S. China approaches trade wars with strategic discipline and long-term planning. As the biggest rival to the U.S in global trade, it had long anticipated the imposition of tariffs and other protectionist measures. In response, it began diversifying its trade routes and market dependances.

This strategic partnership included strengthening it’s economic ties in Africa and across parts of Asia regions that offer abundant resources and growing consumer bases and present a viable alternatives to the American market.

Through initiatives such as the Belt and Road Initiative (BRI) Beijin systematically built infrastructure, signed bilateral trade agreements, and invested in significant sectors in Africa and Asia that facilitate smoother trade flows, and as such mitigating the impact of western trade barriers.

This foresight in diversifying its trade portfolio came out of the fact that China had long observed the growing protectionist sentiment in the West. The 2018 U.S. tariffs which targeted over $250 billion worth of Chinese goods, confirmed its anticipation and it began preparing for a shift in global trade dynamics away from American dominance.

For instance, in Ethiopia the Addis-Ababa-Djibouti Railway funded by China links this African nation to the port of Djibouti. This therefore created a corridor that has become a vital artery for Ethiopian exports and Chinese imports.

The Lagos-Ibadan railway, funded by a 41.5 billion loan from Export-Import Bank is also part of it’s effort to secure reliable trade infrastructure and in exchange Nigeria remains a key supplier of crude oil to China.

In 2020, it signed the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade pact with 14 Asia-Pacific countries that included Japan, South Korea and ASEAN nations RCEP covers about a third of the world’s population and GDP.

Under the Belt and Road Initiative (BRI) the China-Pakistan Economic Corridor has received over $60 billion to build roads, railways, and to develop Gwadar Port. This initiative provides China with direct access to the Arabian sea while bypassing the Strait of Malacca, a strategic chokepoint often times controlled by the U.S.

Uganda has also significantly benefited from the Belt and Road Initiative since it joined the initiative. specially through major infrastructure and energy projects such as the Karuma and Isimba dams, the Entebbe–Kampala Expressway, the Osukuru Industrial Complex, the Kingfisher Oil Field and the East Africa Crude Oil Pipeline (EACOP).These projects have also made Uganda an artery for Uganda exports such as coffee and Chinese imports.

Countries in Africa and Asia that have partnered with China through BRI are likely to weather Trump’s tariffs better than others because their primary trade and infrastructure dependencies are now with China rather than the U.S. By restricting global trade and imposing unilateral tariffs, the U.S is pushing nations further into China’ embrace yet many of these nations were allies or part of the western development networks.

The irony is that Trump’s tariffs meant to punish China may end up punishing the future of America. Countries that once looked to the United States as a beacon of opportunity now see it as unreliable, unpredictable, and disinterested.

History will remember this moment not as China downfall, but as the turning point that confirmed a timeless truth: what does not kill you makes you stronger.

The author is a research fellow at the Sino-Uganda Research Centre.

Trump’s Economic McVeighism: Another Gamble with the Global Economy

Posted on By Musiime George

This month opened in typical Trump-fashion, with Washington imposing blanket tariffs on imports to the US. Following the announcement, markets from New York through Shanghai witnessed severe shockwaves.  Subsequently, the internet was awash with Trump supporters celebrating the effect particularly on the Shanghai and Hong Kong stock markets; praising Trump’s ingenuity. However, a week later, Washington announced a 90-day pause on all tariffs above 10% for imports from all territories except China. Be this as it may, experts have continued to rank Trump’s trade policy as the least friendly in 100 years.

Whereas some commentators argue that the pause was a response please to negotiate, reciprocal tariffs quickly set ‘Trump’s genius move’ and the US economy on a crash course. Moreover, the escalation involving China-the supplier of nearly 40% of American’s imports would mean that: either the 125% tariff gets transferred on to the American consumer or a reliance on alternative sources creates gaps in supply elsewhere. More importantly, the emergent supply deficits would likely create new market opportunities for China while the US risks forfeiting the 1.4 billion strong Chinese market. However, regardless of how this goes, Trump doesn’t seem to have a winning hand, at least not in the short term.

In my opinion, China-US trade tensions are not about China but rather the US’ strong belief in its legitimacy as the sole global power. However, the foundations of this belief ignore the fundamental fact that growth isn’t always infinite or uninterrupted. Indeed, it is for this simple reason that global dominance has always switched hands throughout history. Therefore, from this we can infer that China’s legitimate right to development has always been seen as a threat to this privileged position. Further, this is exacerbated by the US’ deteriorating economic footing seen from a $295 billion trade deficit and close to a trillion dollars of US debt to China. Without the significant progression through time, Trump might have tried the method the British used in 1833 or in 1856 using battleships to enforce “fair trade”; luckily these methods are buried 192 years deep.

The innovation, learning curve theory synergy; China’s engine of growth. Trump during his second state of the nation address in 2019 blamed China of ‘stealing American jobs’ and intellectual property. But in a highly interconnected and interdependent world, how is this to be avoided? Besides, this has always been the way of development. Trailblazers lowering entry barriers for those that follow. History shows that even before Robert fortune went to China disguised as a native to steal the secret of Chinese tea making, corporate espionage was a crucial stage on the path to modernisation. Indeed, Germany would never have replaced Britain as Europe’s industrial power early in the 20th century. Not even the American industrial revolution would have been as successful without both European immigrant capital, skills and knowhow. But more key in China’s rapid growth has been the learning curve theory and innovation; its ability to master cost efficient production.

Away from that, not even the 90-day pause on tariffs on certain countries targeted in Trump’s economic aggression changes the general outlook. In fact, Bloomberg economics projects the general US tariffs to only come down from 27% to about 24%. Despite the three-percentage point reduction, this will still be the highest in 100 years. Moreover, this does not take into account the 125% tariff on China hitherto the source of over 40% of all US imports. However, this can have any or a combination of a number of implications. In one scenario, the tariffs are endured but the products arrive at a much higher price with the America consumer having to bear the burden or, targeted territories seek alternative markets. However, when this happened in 1982 with Japan reducing car exports, the domestic automotive industry produced even less cars making it even harder for the ordinary American to own a car as a result of high prices.

The other possible outcome is that a move is made to readjust supply-chains which might require intensive investment in infrastructure, skills development and new technology in the short to medium term. Some experts are already expressing concerns that it could take decades for America to produce all it needs domestically. In the meantime, this certainly creates a supply deficit. On the other hand, if the US is to source these products from alternative sources, the deficit could potentially emerge elsewhere, likely creating a market opportunity for China given China’s relations with much of the developing world where this deficit is likely to manifest.

Until this point, the discussion has been about China and the US but what does Trump’s economic McVeighism mean for the rest of the world. Normally in such economic conflicts, when a major power faces off with a smaller nation, the outcome is more certain unlike when two major powers face off. In the former, the smaller nation loses badly but in the latter, the whole world suffers.  Moreover, when all other sorts of nations are tossed into the mix, the situation becomes even more complex and could have far reaching consequences. For example, as reciprocal tariff walls sprout in different targeted territories this phenomenon poses a significant threat not just to the US but also to global trade. This situation however seems to isolate the US signalling the potential for serious adversity for the domestic economy.

On the contrary, China has over the recent decades build strong and reliable logistic and infrastructure networks through the Belt and Road Initiative (BRI) cooperation. In addition, the Chinese have through innovation been able to master efficient production. These combined do not merely mean China’s supply-chains may not require much readjusting but rather making it more of a reorientation. The logistic and infrastructure network and efficient production methods also imply that China will be more ready to capitalize on any supply deficits should they occur, but what does this mean for the US?

White House data as of April 10 indicated that China’s share of total US imports had dropped sharply from 34% to just 13.4%. Moreover, with further hiking of the tariffs to 145%, one can expect this to regress even further. NVIDIA for example expects to take a 5.5 billion hit in charges on account of the limiting chip exports to China the company’s biggest market for AI chips. Indeed, economists concur that besides affecting American companies, consumers will also have to deal with soaring prices as firms pass on some all their extra costs not to mention the loss of jobs as was the case in 2018 when Trump first made this gamble. According to the WTO, the resulting contraction of bilateral trade between the world’s two biggest economies will certainly be felt in many places as well.

What is happening in the world today is a stark reminder of the potential damage that could arise at any time from the unchecked trade powers of the US president. President Trump’s free-range to gamble not just with the US domestic economy but also the entire world economy underscores the urgent need for resilient trade systems that will shield global trade when God’s diplomacy becomes weaponised like it is being used against China, Canada, Mexico and others. Further, whereas China has done significant work in this direction, there is a need for Africa and the global south to do more in this regard. Albeit not being proof against trade uncertainties, relative economic peace can be guaranteed through building resilient regional ecological supply systems that that are self-sufficient to counteract instances of economic McVeighism and bullying from without.

George Musiime is a research fellow at the Sino-Uganda Research Centre.

 

US Tariffs Contradicts WTO Rules on Fair Trade and Non Discrimination

Posted on By Ernest Talwana

The current US administration has continued the rhetoric of the previous Trump administration (2016-2020) which includes placing trade barriers against China amongst a litany of actions including barriers on Chinese EVs entering the US market (carefully avoiding placing tariffs on Chinese rare earth metals critical to US defense and aviation industries). This time round, the current administration has opted to place tariffs on all nations and territories  across the planet (with the exception of Russia).

These actions contradict World Trade Organisation agreements on Trade Without Discrimination which asserts equal treatment for all parties under said rules that the US is party to.

Freer Trade through negotiation is equally envisaged by said rules. These rules equally desire gradual and progressive liberation. Something the current US administration is rallying against by putting America First.

Predictability through transparency is equally significant amongst trade partners. Uneven tariffs can be viewed as acting against stated principles and creates strain on well established trade relations.

The Uruguay round of talks therefore placed a ceiling on custom tariffs which would avoid any form of unpredictability that causes strain on global supply chains and unnecessarily raises the coat of doing business.

The current American administration thus disregards the rules based order and seeks to act in her own interests while affecting global trade as a whole, subsequently causing price hikes for American citizens as well as creating shocks on global stock markets.

It should be noted that global supply chains are dependent on free trade. Not the restriction of it with tariffs. Tariffs only act to protect one party while causing economic slowdown.

In an economic war, there are no clear winners. Any form of concession another party seeks to achieve will be offset by losses incurred through higher production costs and strains on the end consumer who foots a higher bill to buy the same commodity.

China’s complaints at the World Trade Organisation are done in an effort to promote fair trade amongst a comity of nations. China doesn’t actively seek to antagonise other nations. Rather, to promote her own interests while building her trade and industrial capacity in a dynamic world.

China equally has bilateral trade agreements with a variety of nations across the globe. This means that countries are aware of China’s competence and willingness to trade. These include Austria, the Belgium-Luxembourg Economic Union, Canada, France, Germany, Italy, Japan, South Korea, Spain, Thailand, and the United Kingdom.

China has built these relationships through her culture of mutuality and trust. A culture deeply embedded in China’s millennia old cultural fabric and permeates throughout her society and international relations.  It is no surprise that many nations are seeking trade relationships with her. China is equally the leading trade partner with the MERCOSUR regional bloc with the Uruguayan President seeking to fast-track negotiations on a free trade area with China.  This includes 30 free trade agreements with a variety of nations across the planet. Aside from the more dominant states, China is equally a dominant Economic and regional player in the Pacific region.

American tariffs underestimate China’s resilience, adaptability and the versatility of Chinese supply chains and her global trade apparatus. Any pain the US hopes to inflict on China is grossly overestimated as China has shown throughout her history a capacity to withstand greater pains.

US Tariff hikes can also be seen as a deprivation of the Global South’s right to development as asserted by the Chinese MFA Spokesperson. Developing states utilise WTO Rules to negotiate global trade through negotiation and deliberation. The actions by the United States signal eonomic coercion and exceptionalism which contradict the desire for a fair system that promotes growth and development of all nations in line with the UN 2030 Agenda for Sustainable Development.

Furthermore, it should be stated that WTO Rules promote fair competition which protectionism stands antithetical to. Protectionism limits innovation and dulls an economy’s ability to challenge itself in the face of competition from other global players.

Protectionism isolates a nation from the rest of the world and causes possible stagnation in the face of changing trends in consumer preferences.

A nation only thrives when it acknowledges competition in all its forms. Not close itself to it.

The writer is a research fellow at Sino-Uganda Research Centre.

Trump’s Tariffs  Have Nothing to Do With a Fair World; It’s A Boomerang Trick to Contain China

Posted on By Abdurahim Ssemanda

The United States President, Donald Trump’s relentless habit of slapping tariffs on other countries has created what I can without doubt call “the politics of beam balance”—with Trump’s tariff situation on one hand and China’s President, Xi Jinping’s inclusivity on the other. In other words, Trump’s tariff situation lands us in a more direct situation of “protectionism” versus “inclusivity” in which the president of the U.S is hungry and longs for a solution that can at least cause equilibrium—a sigh of relief from China’s ever growing economic prowess as the world’s second largest economy which even threatens the United States’ long-term known superiority which politicians in Washington wrongly believe is a preserve of only the US!

Ever since the liberal French economist and businessman, Jean-Baptiste Say, coined the term “protectionism.” President Trump’s tariffs on other countries have given the term a fresh breath of practical existence with a great force even much more than the term had gained widespread use in the mid-20th century during heavy industrialization, trade agreements and economic nationalism.

However, from my angle of perspective, to break China’s economic backbone and strength, trade tariffs against China cannot be a viable solution but rather an economic self torment on Trump’s side. His tarifs which are in all design a gamble to contain China’s rise will certainly boomerang! China is not only the second-largest global power but also a mirror that plays a role in exposing the US indirectly across the globe. Whichever steps Trump takes against China, they leave the US isolated and bare. Secondly, it is not about just tariffs that China’s economic power can be realized. However, it requires a deep analysis of the core factors that made China achieve its position today. Such a core factor is inclusivity.

Just like the prominent American poet and novelist, Henry Wadsworth Longfellow, asserted that, The heights by great men reached and kept were not attained by sudden flight; but they, while their companions slept, were toiling upward in the night, China’s rise to global prominence should not be viewed as a sudden and an unexpected phenomenon. As such, no country should be tempted to believe that the same country’s prowess could be taken down suddenly by tariffs. There is a dire need to closely examine China’s foreign policy in which the major tenet is building a community of shared future for mankind, mutual respect and win-win cooperation with the rest of the world.

To realize this, a quick dive into China’s history clearly shows that from Deng Xiaoping’s economic reforms in the 1970s to Xi Jinping’s Belt and Road Initiative (BRI) today, China’s leadership has consistently pursued a long-term vision for the country’s global engagement and building a world where every country thrives with others in harmony rather than hegemony. This is the starting point of “inclusivity” which from the beginning was and is still deeply rooted in China’s steps to her development.

In just two years after the death of Chairman Mao, China’s Deng Xiaoping introduced a number of reforms but the most intriguing one among all was the Economic Liberalization reform. This was meant to revive China’s economy from shambles and shift it from centrally planned as it had been stagnated by the Gang of Four, to a market-oriented economy through the 1978 policy “Reform and Opening-Up.” Under this policy, Deng Xiaoping encouraged private enterprise, foreign investment and trade.

Soon after 1978, in his opening speech at the twelfth National Congress of the Communist Party of China on 1st September 1982, Deng Xiaoping emphasized the policy of “Opening to the outside world.” This was the kick-start to inclusivity. In his own words, he remarked that “We shall unswervingly follow a policy of opening to the outside world and increase our exchanges with foreign countries on the basis of equality and mutual benefit.” It is from this point that terms like “win-win” cooperation gained observance on the international scene especially with their roots traced not elsewhere but from Asia and China in particular. This is so simply because China started identifying itself with the rest of the world. It realized that it could peacefully and harmoniously develop and coexist with other nations.

China’s intensified spirit of inclusivity gained much momentum with Deng Xiaoping’s era. For example, on May 7th 1978, amidst the struggle to achieve four modernizations, Xiaoping remarked that, “Once we have accomplished the four modernizations and the national economy has expanded, our contributions to mankind, and especially to the Third World, will be greater. As a socialist country, China shall always belong to the Third World and shall never seek hegemony. This idea is understandable because China is still quite poor, and is therefore a Third World country in the real sense of the term. The question whether or not China will practice hegemony when it becomes more developed in the future. My friens, you are younger than I, so you will be able to see for yourselves what happens at the time. If it remains a socialist country, China will not practice hegemony and it will belong to the Third World. Should China become arrogant, however, act like an overlord and give orders to the world, it would no longer be considered a Third World country. Indeed, it would cease to be a socialist country.”

That enough, indicates how China had set itself to coexist with the world, identify itself with the rest parts of the world and foster development for all. Most especially, the development of Third World countries was given much attention. It is thus not surprising that by 1976, as poor as China was and economically staggering, the Tazara Railway—linking Dar es Salaam in Tanzania to Kapiri Mposhi in Zambia had been completed. This railway, one of China’s most iconic early projects in Africa, remained a focal point of Sino-Africa cooperation during 1982-1990.

In the most previous days, President Trump branded China “the biggest abuser of tariffs.” This is part of the reflection that he is realizing the impracticality of his tariffs. Moments before, we had witnessed China, Japan and South Korea reaching an agreement to jointly respond to US tariffs. This further reflects the spirit of inclusivity for which China has groomed in other countries it operates with.

It is worth noting that by 2024, Africa-China trade reached USD 300 billion while that of Africa-US hit USD 72 billion. This serves to reflect China as the biggest African trade partner over the US. This clearly shows that China is not relying on exports to the US as a sole consumer and market. It learned so quickly that the US is a camouflaging economy especially one that prides in tariffs and sanctions. As a result, China intensified her spirit of inclusivity and shifted her goal posts to other countries like in the Association of Southeast Asian Nations (ASEAN), in Africa and in the Middle East. Her foreign policy has heavily built on principles of mutual respect, amity, win-win cooperation and China has been a firm supporter of other countries’ development efforts emphasizing the need to support and build a community of shared future and prosperity for mankind.

The writer is a research fellow at the Development Watch Center.

 

Why America Will Lose Tariff War Against China

Posted on By Nnanda Kizito Sseruwagi

It is impossible to make any assessment of economic growth worldwide without coming face to face with the contribution of China, in any country’s economic growth. But America is also the world’s largest developed country. It is impossible to point at any nook or crevice of the world and not find American capital or financing doing something. Because of this, a tariff war between the world’s largest developing country, China, and the world’s largest developed country, the USA, would have effects resonating with every country in the world. They are two elephants. We are grass.

When Deng Xiaoping succeeded Hua Guofeng and opened up China to international trade in 1979, the volume of trade between China and the USA stood at a paltry US$2.5 billion. Recent figures for 2024 show that there has been an increase of that trade volume to US$688.3 billion! This expansion of trade between the two countries can never be said to have benefited only one country. I think Trump is blinded by sheer prejudice in the belief that China is ripping off America in their balance of trade.

America has increasingly grown to be a protectionist, yet it is the birthplace of free-market Mujahideens like Milton Friedman. It has in total imposed over US$500 billion of tariffs against China between 2018 and now. Given China’s high resolve to peacefully settle all kinds of conflicts, it invited the U.S. into several rounds of trade and economic negotiations to stabilize the two countries’ bilateral trade relations over the years, to no material success.

America, in its typical coercive American style, has recently passed the “America First Trade Policy Memorandum” in which they targeted China with a number of tariffs in complete usurpation of the principles of the market economy and multilateralism which henceforth were indistinguishable from America itself – American being the beacon of free-trade values.

The entire global supply chain is disrupted when America imposes such arbitrary trade restrictions on China. So, it is no longer just China’s problem, we all must be concerned. It is even false for Trump to claim China is ripping off the U.S. In fact, ever since the Bretton Woods system was established in 1944, it has been the U.S. ripping off the entire world because the American dollar was made the world’s primary reserve currency, pegged to gold and used as the standard for international trade and foreign exchange – a position that Americana has heedlessly exploited to its selfish benefit. It is this economic history that has given the U.S. significant economic leverage over other countries which have to hold dollars to stabilize their currencies, yet the U.S. can simply print dollars at no cost to settle its foreign debts and pay for material goods in international trade. America’s biggest export today is capital because it can literally print money to cover its budget deficits, effectively exporting inflation while other countries bear the cost of maintaining dollar reserves.

I do not understand why Trump or his economic and trade policy advisers seem to think that for America to be succeeding and something, its rivals must lose. It should be obvious to anyone that cooperation between China and the US does benefit both sides. And the opposite is true.

As already explained above, the volume of trade between the two countries has grown 275 times since 1979, reaching $688.28 billion in 2024.

It is difficult if not impossible to find any ratio of trade relations between the two nations where the U.S. does not benefit more than China. And this is why I argue that America stands to lose the tariff war. Whereas the US is China’s largest goods export destination, it is also the second-largest source of imports. Therefore, if China tits for tat for every increment of tariffs America makes, American citizens will either pay much more for basic goods or even fail to afford them at all. China is also the U.S.’s third-largest export destination. This means American companies will find it crazy expensive to export goods and services to one of their largest markets. Besides, America’s exports to China have been increasing faster than their exports to any other country in the world, because of China’s purchasing power.

According to UN figures, in 2024, America exported US$143.55 billion worth of goods to China, representing a 648.4 percent increase from US$19.18 billion in 2001. Additionally, this exceeded its overall export growth of 183.1 percent during the same period. China is also the largest export market for US soybeans and cotton, the second-largest export market for integrated circuits and coal, and the third-largest export market for medical devices, liquefied petroleum gas, and automobiles.

This aerial view shows the Port of Baltimore on April 10, 2025, in Baltimore, Maryland. US President Donald Trump’s 10 percent tariff for almost all countries except China will likely remain in place going forward, his top economic advisor Kevin Hassett said Thursday. Jim Watson/AFP/Getty Images

According to the US Department of Commerce (USDOC), the American service industry is also highly dependent on the two-way trade in services with China. Between 2001 and 2023, China-US services trade expanded over seven times from US$8.95 billion to US$66.86 billion. In 2023 alone, the U.S. registered a surplus of US$26.57 billion in service trade with China, highlighting a significant advantage for the U.S.

Into the bargain, in 2022, American-owned enterprises in China earned total revenue worth US$490.52 billion, significantly exceeding the US$78.64 billion in sales revenue generated by Chinese-owned enterprises in the U.S. The gap of US$411.88 billion critically underscores the profound advantage of American enterprises in international trade, even against a strong economy like China. The number of trade areas which can be cited as examples to show how America benefits more than China under free trade are countless. The amounts involved are enormous. Doesn’t Trump know this?

It would therefore be foolhardy for Trump to brazenly sideline China economically through imposing crazy tariffs. Over 10 American insurance companies have established subsidiaries in China. American financial institutions, such as Goldman Sachs, American Express, Bank of America, and MetLife, have all invested substantially in Chinese financial institutions. Trump seems to either lack the knowledge or arbitrarily disregard the fact that the trade balance between China and the US is not a malicious creation of China. Instead, it is an independent result of structural factors in the US economy and the natural comparative advantages and international division of labor between it and China.

The writer is a senior research fellow at the Development Watch Center.

Trump’s Tariffs Against China: A Threat To Countries’ Legitimate  Development Rights

Posted on By Allawi Ssemanda

For almost four months now, the Trump administration has arguably rattled global trade, economists, shocked business executives and set off heated exchanges with not only the world’s second largest economy – China, but also US’s largest trading partners and allies like Canada and Mexico.

While economists and corporate executives expressed concerns that such shift in Washington’s trade policy was a gamble with potential of causing a ricochets in the global economy, Trump appeared unbothered, selling his tariffs policy with celebratory tone calling tariffs “the greatest thing ever invented,” as he branded the day he announced his now paused tariffs a “liberation day.” “This is one of the most important days, in my opinion, in American history,” noted Trump as he announced imposing a now paused 10% universal tariff on all imported foreign goods in addition to “reciprocal tariffs” on several countries he claims have always “cheated” America.

While he later announced that he was pausing his tariffs for 90 days to allow negotiations, he maintained 145% tariffs on Chinese goods prompting Beijing to announced retaliatory tariffs of 125% onto US goods.

Also, Beijing made its position clear, strongly condemning these tariffs arguing they “severely infringes upon the legitimate rights and interests of nations, severely violates World Trade Organisation (WTO) rules, severely harms the rules-based multilateral trading system, and severely disrupts the stability of the global economic order.”

Further, Beijing noted that the U.S opting to use “tariffs as a tool of extreme pressure for selfish gain is a textbook example of unilateralism, protectionism, and economic coercion.” This, China maintains “violate basic economic laws and market principles, disregard the balance of interests reached through multilateral trade negotiations, and ignore the fact that the US has long reaped substantial benefits from international trade.”

While Trump argues that the US has been “unfairly” treated and “cheated” by other countries, many analysts contend that the tariff man’s main intention is to advance his protectionists agenda which he argues will help revive domestic manufacturing with possibility of re-shoring what he describes as American jobs.

If critically analysed, while Trump claims his tariffs marks  “the beginning of making America rich again,” many economists contend his unorthodox policies will harm global trade supply and also hurt the American economy. Indeed, Larry Summers, treasury secretary under Bill Clinton, branded Trump’s  tariffs “a self-inflicted supply shock.” “This is a self-inflicted wound to the American economy. I’d expect inflation over the next three or four months to be higher as a consequence, because the price level has to go up when you put a levy on goods that people are buying,” stressed Summers. It is not surprising the Wall Street Journal’s editorial described Trump’s tariff policies as the ‘dumbest trade war in history.’

A clear analysis of  Trump’s tariffs makes one thing clear; he wrongfully thinks the US can thrive on her own and that Washington has nothing to gain from global trade. This partly explains why “tariff man’s” administration is insisting on pursuing “American Exceptionalim” and isolation. President Trump ignores the fact that in today’s global village, it is nearly impossible for any single country to embrace isolation policies and succeed without hurting itself.  The Wall Street Journal’s editorial brings this better; “Mr Trump sometimes sounds as if the US shouldn’t import anything at all, that America can be a perfectly closed economy making everything at home. “This is called autarky, and it isn’t the world we live in, or one that we should want to live in, as Mr Trump may soon find out.

The US is one of the main arctetures of the current international economic and trade order and so should embrace the rules entirely other than unilaterally opting to place American interests above the common good of the international community. As China noted in their position regarding Trump’s tariffs, “economic globalisation is an inevitable path for the development of human society. The multilateral trade system, with the WTO at its core and based on rules, has made important contributions to the development of global trade, economic growth, and sustainable development.”

China and some analysts believe Trump’s use of tariffs targeting China is due to Trump’s desire to “counter” China’s economic progress which the Trump administration sees as a threat to the US’s assumed right to dominate the world. Rightly so, China contends by targeting its trade with tariffs, the US is violating WATO rules which Beijing notes undermines the multilateral trading system.

Analysing 1st Trump Administration China-targeted tariffs, a study by the Cato Institute, an American libertarian think tank found that the US’s use of tariffs targeting Chinese trade violated  WTO rules. It further revealed that while Chinese companies were most affected, even American’s citizens were affected as China responded to the Trump administration’s trade tariffs with reciprocal tariffs. The study “Unfair Trade or Unfair Protection? The Evolution and Abuse of Section 301” contends that the laws Trump cites to impose tariffs on other countries “grants the executive branch far too much discretion in defining an actionable foreign trade practice” which may be exploited for political reasons – it allows American President to safeguard America’s trade interests by remedying any “act, policy, or practice of a foreign country [that] is unreasonable or discriminatory and burdens or restricts United States commerce.”

In light of this, as China stated in their position on Trump’s tariffs, “development is a universal right of all nations, not the privilege of a few. There are no winners in trade wars or tariff wars. All countries must uphold genuine multilateralism, jointly oppose all forms of unilateralism and protectionism, safeguard the international system…”

The opposite is disastrous because the use of tariffs to counter  China does not only hinder legitimate development rights of the Chinese people but the entire global south population, especially Africa  whose countries’ both social and economic development have been realized as a result of China’s economic development and Beijing’s selfless policy of building a community of shared future.

Those who can should remind president Trump that, the world needs win-win cooperation and justice, not America’s hegemony!

Allawi Ssemanda is a Senior Research Fellow, Development Watch Centre.