Why Trump's trade war is hurting the world
Trump's tariffs are not just harming China and SA, but the entire global economy. It's time for new alliances and strategies.
EFF leader Julius Malema has found a refreshing way of describing how US President Donald Trump's condescending manner of dealing with other world leaders, including President Cyril Ramaphosa, has become.
According to Malema, himself on Trump's radar for chanting a liberation-era slogan, which our apex court has found nothing wrong with, says: 'Being summoned to the White House is like teachers being called to the office of the principal.'
As seen during the recent meeting with Ramaphosa, in holding a conversation with Trump, you brace yourself for anything.
Trump's arsenal includes being ambushed with false photographs depicting a 'genocide', to being bombarded by an old footage of Malema addressing EFF supporters. All driven to show the world 'how bad things are in South Africa'.
Amid all this insanity, backed by insults, one has to admire China for standing up to the Trump's expensive experiments.
With the April Trump-imposed 'reciprocal tariffs', on nearly every trading partner, US rates on Chinese goods soared up to 145% – the highest in a century. But this has failed to dampen the fighting spirit of the world's second-largest economy.
ALSO READ: Trump's Apple tariff threat expanded to other smartphones
Despite optimistic signals from China-US trade talks in Geneva, the damage to global trade has become irreversible.
As Beijing-based international affairs expert Hui Fan, has observed: 'In the heart of Cupertino, Apple engineers are scrambling to redesign the iPhone 17.
'Why?
'US semiconductor tariffs have ignited a fire under production costs. But here is the kicker: your smartphone is a United Nations of tech, with its brain born in California.
'Its face crafted in the Republic of Korea and its body assembled in China. 'This intricate web of international collaboration is the hallmark of globalisation – a system that has driven economic growth and innovation for decades. But, now, this delicate balance is under threat.'
Blame all this mess on Trump – the school principal gone berserk.
ALSO READ: WATCH: SA should know what leverage it has on the US and act on it, Rasool says
The World Trade Organisation (WTO) has issued a warning that US tariffs could shrink global trade by 1.5% this year, with North American exports plummeting by a staggering 12.6%.
Ironically, after World War II, a global conflict that lasted from 1939 to 1945, pitting the Allied powers of France, Great Britain, the Soviet Union, the US and China against the Axis of Germany, Italy and Japan, it was America that engineered the Bretton Woods system and the WTO.
The US wanted to institutionalise free trade – cleverly embedding its economic dominance into multilateral trade rules.
The system fuelled unprecedented growth: the US gross domestic product tripled from $10 trillion in 2000 to $27 trillion in 2023 – while multinational giants like Exon and Apple thrived on global supply chains.
Now, Trump is dismantling the system built by his predecessors. If this is about the rise of the Chinese economy and that of other developing nations, the US dominance faces erosion, sparking a political backlash.
Faced with pressure, some US politicians have now seen globalisation as the scapegoat – casting China as 'a free rider gaming the system'.
ALSO READ: Experts warn South Africa cannot afford tariff showdown
In explaining flaws in the US narrative, Hui says it 'overlooks deeper structural flaws'.
'Automation and corporate offshoring – not trade – have displaced workers, while tax policies favour capital over labour,' says Hui.
'With elites capturing the gains of globalisation, wealth inequality has soared, with the wealthiest 1% holding 30.8% of US net wealth, as of 2024.'
For South Africa, it is time to find new markets and deepening relations with Brics countries – away from the White House humiliation.
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