President Donald Trump’s approach towards US-China trade has involved the imposition of significantly high tariffs. Although he recently granted a temporary reprieve to certain tech imports, China’s producers continue to face tariffs of 145%. An economist has voiced an opinion suggesting that if Trump’s aim is to slow China’s technological progress, this might not be the right strategy.
These fluctuating tariffs have caused a tumultuous impact on the global economy, with China being a primary focus. Despite a temporary easing for specific tech imports, other Chinese goods such as toys, apparel, and furniture remain subject to these high tariffs, which necessitates finding new markets.
The administration has prioritized reducing the US-China trade deficit and bringing manufacturing back to the US. However, according to Keyu Jin, an associate professor of economics at the London School of Economics and author of “The New China Playbook,” the current strategy might not effectively counter China’s tech advancement. In a Financial Times op-ed, Jin mentioned that conflicts have historically fueled technological advancements, and Trump’s tariffs might inadvertently encourage innovation in China.
Jin suggests that tariffs alter trade dynamics by redistributing resources and reshaping industrial structures. To truly inhibit technological progress in China, she argues, the US should keep tariffs low on the majority of Chinese exports to the US and support high-tech exports to China to hinder progress in advanced components.
Instead, the situation has evolved otherwise, as US exports face barriers to the Chinese market, mirrored by China imposing retaliatory tariffs of 125% on US products. Such reciprocation could severely impact trade between the two largest economies.
Jin foresees that in response to the trade war, China will likely invest more in high-value, advanced technology sectors. She highlighted China’s strategic pivot towards innovation and control over core technologies as a defense strategy against tariffs. Companies like Huawei and BYD, possessing proprietary technologies, are better shielded against tariff impacts and supply chain disruptions. China is looking to establish a tech supply-chain model focusing on regional production, tech autonomy, and global supply-chain redundancy.
Experts have observed that the vast scale of Chinese exports has disrupted global trade and economies. The Biden administration has continued enforcing the tariffs established during Trump’s presidency, while also restricting US tech exports like Nvidia’s high-end chips to hinder China’s advancements in areas such as artificial intelligence. However, these sanctions have redirected demand away from the US, with Chinese chip manufacturers reporting record earnings and reinvesting in research and development.
Jin also noted the emergence of China’s DeepSeek, a low-cost AI model developed under constraints, and outlined China’s focus on sectors like photonic quantum computing, low-orbit satellites, and factory robotics to advance its technological frontiers. Since the introduction of tariffs in Trump’s first term, Chinese companies have expanded into global markets, including Africa, and have potential to grow in the realms of services and digital infrastructure.
Jin drew a historical analogy to Napoleon’s trade embargo on Britain in the 1800s, which pushed Britain to explore new markets and fueled industrialization. She suggested that the US might be repeating a similar error, implying that if Trump’s objective is to revitalize US economic strength, he should be more wary of a constrained China rather than a comfortable one.
This article originally appeared on Fortune.com.
