The Liberation Day “reciprocal” tariffs announced by US President Donald Trump were stayed for 90 days on 9 April for all countries except China. Trump announced that “I am hereby raising the tariff charged to China by the USA to 125 percent effective immediately” (a rate later raised to 145 percent) “based on the lack of respect that China has shown to the world’s markets.”

President Trump voiced similar concerns during his first term as well — the 2017 annual report to Congress on China’s compliance with World Trade Organisation (WTO) commitments noted that, “it seems clear that the United States erred in supporting China’s entry into the WTO on terms that have proven to be ineffective in securing China’s embrace of an open, market oriented trade regime.”

While tariffs imposed by the US on Chinese products in 2017 were way lower than the ones today yet what is fairly obvious is that Trump and his team members failed to take account of the significant difference between China eight years ago and today.

While China to this day lags behind the US in terms of Gross Domestic Product, yet it is projected to catch up due to a growth rate on average more than double that of the US. China’s rise has been meteoric. As per the WTO website in 2001, the year China joined the WTO, its GDP was 3 trillion dollars and by 2024 it had risen to 19 trillion dollars (the US registered a GDP of 10.5 trillion dollars in 2001 rising to 29 trillion dollars in 2024).

China is also a major destination for foreign direct investment – from 200 billion dollars in 2001 to more than 2.3 trillion dollars in 2023 – a feat that China achieved partly due to globalisation as it successfully attracted foreign capital by extending fiscal and monetary incentives for setting up manufacturing units in-country as well as by providing........

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