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The Citizen
4 days ago
- Business
- The Citizen
US court blocks tariffs in major setback for Trump
A US court ruled against Trump's sweeping tariffs, calling them an overreach of power, shaking markets and derailing his global trade war strategy. US President Donald Trump holds a chart as he delivers remarks on reciprocal tariffs during an event in the Rose Garden entitled 'Make America Wealthy Again' at the White House in Washington, DC, on April 2, 2025. Picture: Brendan SMIALOWSKI / AFP A US federal court blocked most of President Donald Trump's sweeping tariffs, boosting markets Thursday with a ruling that could derail his trade strategy. The opinion marks a significant setback to Trump as he bids to redraw the US trading relationship with the world by forcing governments to the negotiating table through tough new tariffs. Trump's global trade war has roiled financial markets with a stop-start rollout of import levies aimed at punishing economies that sell more to the United States than they buy. Trump argued that the resulting trade deficits and the threat posed by the influx of drugs constituted a 'national emergency' that justified widespread tariffs. But the three-judge Court of International Trade ruled Wednesday that Trump had overstepped his authority, and barred most of the duties announced since he took office in January. Attorneys for the Trump administration promptly filed an appeal against the ruling, which gave the White House 10 days to complete the bureaucratic process of halting the tariffs. ALSO READ: Why Trump's trade war is hurting the world 'It is not for unelected judges to decide how to properly address a national emergency,' White House spokesman Kush Desai said in a statement. 'President Trump pledged to put America first, and the administration is committed to using every lever of executive power to address this crisis and restore American greatness,' Desai said. China: 'cancel wrongful tariffs' The ruling comes as Trump was using the tariffs as leverage in trade negotiations with friends and foes, including the European Union and China. Beijing — which was hit by 145 percent tariffs before they were sharply reduced to give space for negotiations — reacted to the court ruling by saying the United States should scrap the levies. 'China urges the United States to heed the rational voices from the international community and domestic stakeholders and fully cancel the wrongful unilateral tariff measures,' said commerce ministry spokeswoman He Yongqian. Japan's tariffs envoy Ryosei Akazawa said as he left for a fourth round of talks in Washington that Tokyo — reeling from tariffs on cars — would study the ruling. ALSO READ: Trump's Apple tariff threat expanded to other smartphones Trump unveiled sweeping import duties on nearly all trading partners on April 2, at a baseline 10 percent, plus steeper levies on dozens of economies, including China and the European Union. The US court's ruling also quashes duties that Trump imposed on Canada, Mexico and China separately using emergency powers. But it leaves 25-percent duties on the auto, steel and aluminum industries intact. Some of the turmoil was calmed after Trump paused the larger tariffs for 90 days pending negotiations. Asian markets rallied on Thursday and US futures pointed to early gains, but Europe was mixed, with London in the red while Paris and Frankfurt rose. The ruling 'throws into disarray several trade deals that have already been agreed, and those that are still in the negotiation phase,' said Kathleen Brooks, research director at XTB brokerage firm. ALSO READ: Experts warn South Africa cannot afford tariff showdown 'Extraordinary threat' The federal trade court was ruling in two separate cases — brought by businesses and a coalition of state governments — arguing that the president had violated Congress's power of the purse. The judges said the cases rested on whether the International Emergency Economic Powers Act of 1977 (IEEPA) delegate such powers to the president 'in the form of authority to impose unlimited tariffs on goods from nearly every country in the world.' 'The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.' The judges stated that any interpretation of the IEEPA that 'delegates unlimited tariff authority is unconstitutional.' Gregory Meeks, the top Democrat on the House Foreign Affairs Committee, said the ruling confirmed that 'these tariffs are an illegal abuse of executive power.' 'Trump's declaration of a bogus national emergency to justify his global trade war was an absurd and unlawful use of IEEPA,' he said. ALSO READ: Tom Cruise has world guessing as he unleashes 'Mission: Impossible' at Cannes White House aide Stephen Miller called it a 'judicial coup.' Analysts at London-based research group Capital Economics said the case may end up in the hands of the Supreme Court. 'But it would be unlikely to mark the end of the tariff war given the various other routes through which the Trump administration could impose tariffs,' they said, noting that the US president could explore other sections of US law or seek congressional approval for tariffs. – By: © Agence France-Presse
Newsweek
21-05-2025
- Business
- Newsweek
US Sees Fall in Job Vacancies After Trump Tariffs
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The U.S. has seen a fall in job vacancies since President Donald Trump's tariffs took effect earlier this year. Why It Matters A decrease in job openings typically indicates that employers are hiring less, which can be a sign of an economic slowdown, business uncertainty, or reduced demand for labor. For job seekers, it becomes more difficult to find employment, and wage growth may slow due to less competition for workers. What To Know The Robert Walters Global Jobs Index, published on May 20, found there was a 16.2 percent month-on-month decline in professional job vacancies in the U.S. between March and April, due in part to President Donald Trump's wide-ranging trade tariffs. On April 2—a day he dubbed "Liberation Day"—he announced a minimum 10-percent tariff on all U.S. imports and higher individualized rates on some countries. "For most employers, hiring additional employees is a luxury when tariffs are raising operating costs, lowering demand, and could potentially keep inflation and interest rates elevated," Noah Yosif, chief economist at American Staffing Association, told Newsweek. "For all these reasons, employers are keeping their cash close to weather the tariffs and their impact on the economy making additional headcount a secondary priority." President Donald Trump holds up a chart while speaking during a 'Make America Wealthy Again' event in the Rose Garden at the White House on April 2, 2025, in Washington, DC. President Donald Trump holds up a chart while speaking during a 'Make America Wealthy Again' event in the Rose Garden at the White House on April 2, 2025, in Washington, DC. Chip Somodevilla/GETTY Usha Haley, Barton distinguished chair in international business at Wichita State University, said the drop in vacancies can be attributed to the U.S. economy shrinking earlier this year, contracting to 0.3 percent annually, which was "a huge drop from the 2.4-percent growth at the end of 2024." "Trade wars, geopolitical uncertainty, inflation concerns, budget deficits at all-time highs, with no visible plans to tackle these issues, have all contributed to the heightened uncertainty," she explained to Newsweek. "Investors need concrete reassurances, and that has not yet been forthcoming." Haley also warned that the findings are indicative of a potential recession. Concerns of a recession have been intensified by the decision by Moody's to strip the U.S. of its triple-A credit rating for the first time in more than a century, due to mounting government debt and rising interest expenses. However, a recent tariffs breakthrough with China—which had a staggering 145 percent levy placed on imports into the U.S.—has somewhat dampened these fears. Both countries agreed to roll back tariffs for a 90-day period starting May 14. What People Are Saying Usha Haley, Barton distinguished chair in international business at Wichita State University, told Newsweek: "We are currently in the midst of heightened uncertainty on so many fronts, which always dampens corporate expansion and hiring," she said. "In short, we have the settings for a perfect storm on the horizon, and even perhaps a recession, though the risks of the R word are now widely seen as less than 50 percent." What Happens Next Following the reduced tariff announcement, investment bank JPMorgan also lowered its recession risk score to below 50 percent. "The administration's recent dialing down of some of the more draconian tariffs placed on China should reduce the risk that the U.S. economy slips into recession this year," JPMorgan chief U.S. economist Michael Feroli said. "We believe recession risks are still elevated, but now below 50 percent."
Newsweek
21-05-2025
- Business
- Newsweek
The Double-Edged Sword of Trump's Tariffs: Environmental Whispers Amid Economic Pain
The Trump administration's recent tariffs on imported goods, primarily framed as economic nationalism to correct trade imbalances, have an often-overlooked aspect: potential environmental co-benefits in greenhouse gas (GHG) emissions and fast fashion waste. Societally, it is useful that these environmental co-benefits may occur, especially when the administration is actively anti-GHG mitigation and has left the Paris climate agreement. There is value to exploration of these minor and likely temporary environmental advantages against the significant co-costs to labor, livelihoods, and the broader sustainable transition. While a superficial view might see an environmental silver lining, a deeper look reveals these benefits are overshadowed by detrimental economic and long-term environmental progress impacts. The Murky Silver Lining: Environmental Co-Benefits? Tariffs increase the cost of imported goods, typically leading to a reduction in international trade volume. This decrease in cross-border movement directly correlates with lower GHG emissions, particularly from the significant shipping and transportation sectors. Rob Jackson, head of the Global Carbon Project, a group of scientists who monitor greenhouse gas emissions yearly, noted that these tariffs may reduce emissions temporarily due to an anticipated economic downturn. This temporary dip results from reduced industrial output and consumption, lessening the demand for transporting raw materials and finished products globally. Proponents also argue that pricier imports could incentivize domestic manufacturing, potentially shortening supply chains and reducing the carbon footprint associated with complex global production. Localized production would eliminate extensive international shipping, thus lowering transportation emissions. President Donald Trump speaks during a 'Make America Wealthy Again' trade announcement event in the Rose Garden at the White House on April 2, 2025, in Washington, D.C. President Donald Trump speaks during a 'Make America Wealthy Again' trade announcement event in the Rose Garden at the White House on April 2, 2025, in Washington, tariffs are also expected to impact the fast fashion industry, known for its environmental consequences from overproduction and rapid disposal of clothing. The elimination of the de minimis exemption, which previously allowed low-value packages to enter the U.S. duty-free, directly increases the cost of fast fashion items from major online retailers like Shein and Temu, heavily reliant on direct-to-consumer shipments from China. The expectation is that higher prices will make frequent purchases of cheap, trendy clothing less appealing. Fashion industry experts and environmental advocates hope this price increase could shift consumer behavior toward fewer, higher-quality, and more durable garments, ultimately reducing textile waste in landfills. Additionally, more expensive new clothing due to tariffs might increase the popularity of the second-hand clothing market, further contributing to a more circular fashion economy by extending garment lifespans. The Sharp Edge: Co-Costs to Labor and Livelihoods Despite the superficial environmental benefits, the economic realities for American and international workers and consumers present a less optimistic picture. Tariffs on imported components and materials are expected to negatively affect employment in U.S. industries relying on these inputs, as increased costs could diminish their global competitiveness. A Goldman Sachs analysis suggests a potential net negative impact on overall U.S. employment of approximately 400,000 jobs. Even when the tariffs do create jobs in specific industries, the higher costs often outweigh these benefits. In his first administration, Trump's tariffs ended up costing consumers an average of $900,000 for every steel job created. Furthermore, workers in major apparel-producing countries like Vietnam, Bangladesh, and Cambodia are particularly vulnerable. These countries could face average tariff rates of 46 percent, 37 percent, and 49 percent respectively if the 90-day pause expires. This could lead to American retailers reducing orders or seeking alternative sources, resulting in potential factory closures, job losses, and wage pressure in these export-dependent economies. Beyond direct employment impacts, tariffs act as a consumer tax, leading to higher prices for a wide range of imported goods, including clothing, electronics, and potentially groceries. Estimates from the Yale Budget Lab and the Center for American Progress indicate that the current tariff regime could cost the average U.S. household thousands of dollars annually, with estimates ranging from $1,200 to $5,200. This increased cost of living disproportionately affects low- and middle-income households, as tariffs are inherently regressive. The broader economic consequences of these tariffs also pose a significant threat to livelihoods. The risk of reduced GDP growth, potential recession, and increased economic uncertainty can negatively impact job security, investment opportunities, and overall economic well-being across various sectors. The potential revenue generated by these tariffs might not be sufficient to offset the widespread negative economic consequences for the average American family. The Illusion of Environmentalism While reduced emissions and less fast fashion waste might seem environmentally appealing, relying on tariffs as the primary means is inefficient and carries significant economic risks. A major concern is the potential for tariffs on imported components and materials to increase the cost of clean energy technologies like solar panels, wind turbines, and EV batteries, hindering the crucial transition to a low-carbon economy. Experts largely agree the long-term environmental benefits of green energy solutions would outweigh the emissions costs required to ship these materials, thereby undoing the impact of tariffs. A more effective and sustainable approach to environmental protection involves direct and targeted policies, such as carbon pricing, stricter environmental regulations, and substantial public and private investments in renewable energy infrastructure and sustainable practices. These measures can directly address environmental challenges without the broad and often damaging economic consequences of tariffs. Furthermore, trade wars triggered by tariffs can undermine the international cooperation essential for tackling global challenges like climate change. When countries are in trade disputes, their willingness to collaborate on environmental issues, and other human health, safety, and security issues, decreases. While the Trump tariffs might offer a temporary and unintended environmental benefit by slightly slowing GHG emissions and potentially reducing fast fashion waste, these co-benefits are significantly outweighed by the substantial co-costs imposed on labor and livelihoods. The potential for job losses, wage stagnation, increased consumer prices, and broader economic instability far overshadow any minor environmental advantages. Moreover, relying on tariffs as a primary tool for environmental protection is a crude and ultimately counterproductive strategy, especially considering the potential to hinder the transition to clean energy. These co-benefits may be a small win for those who care about the environment and climate change, but the direct impacts of these tariffs are not worth the gamble with Americans' and international health, livelihood losses, and the impending loss of American influence and trust around the world. Longer-lasting benefits can only come from adopting targeted, direct, and internationally collaborative policies that prioritize environmental sustainability and economic well-being. It is this approach that can ensure a future where both people, in the United States and abroad, and the planet can prosper. J. Freya H. Latwin, Ph.D., holds degrees in environmental and developmental economics from the University of Oxford and the London School of Economics and Political Science. She's lived and worked globally and holds affiliate academic positions at East Carolina University, George Mason University, and Virginia Polytechnic Institute and State University. The views expressed in this article are the writer's own.
Newsweek
21-05-2025
- Business
- Newsweek
Can Trump's Tariffs Help Create a 'Golden Age' of US Manufacturing?
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. President Donald Trump has said he wants to return the United States to a "golden age" of manufacturing and is trying to force the issue for many industries by slapping high tariffs on foreign products. However, their implementation, marked by abrupt shifts, pauses and fluctuations in levies, has sparked instability across the U.S. economy, as well as rattled global markets and longstanding partnerships. To some, like former Trump White House adviser Steve Bannon, the initial disruption is the path to a "robust," "hegemon-like," "reindustrialized" America—one that promises to put tens of thousands back to work in well-paying manufacturing jobs. Others, like Colin Grabow, associate director at the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies, argue the entire premise of reshoring and reindustrialization is flawed, as American manufacturing isn't on the decline, just manufacturing employment. Factory located in Carson City, CA. Factory located in Carson City, CA. Alexandre Oliveira/Getty Total industrial production in the U.S. is on the rise, rebounding from a sharp dip in April 2020 during the COVID-19 pandemic and returning to around 2018 levels, according to Federal Reserve Economic Data, or FRED. Industrial output now surpasses the heyday of American factories—thanks largely to efficiency gains and technological innovation. In the 1950s, manufacturing made up almost 30 percent of America's GDP, according to the Federal Reserve Bank of St. Louis, although that has since dropped to about 10 percent. Yet the U.S. remains the world's second-largest manufacturer, behind only China and well ahead of the third- and fourth-place contenders, Japan and Germany. Despite the recent rebound in output, manufacturing employment has steadily declined over the past few decades—a core concern for Trump supporters rallying around the promise of reshoring, which promises to bring tens of thousands of jobs back stateside. Manufacturing jobs in the U.S. hit a peak in 1979, with over 19 million people employed in the sector, according to the U.S. Bureau of Labor Statistics. Forty years later, manufacturing jobs accounted for less than 13 million in the U.S. U.S. President Donald Trump displays a signed executive order imposing tariffs on imported goods during a 'Make America Wealthy Again' trade announcement event in the Rose Garden at the White House on April 2, 2025... U.S. President Donald Trump displays a signed executive order imposing tariffs on imported goods during a 'Make America Wealthy Again' trade announcement event in the Rose Garden at the White House on April 2, 2025 in Washington, DC. More Andrew Harnik/Getty Manufacturing's falling share of employment over this time has coincided with job growth in service-providing industries, including professional and business services, education and health services, and leisure and hospitality, BLS data shows. Some experts, like Andrew Yang, a former presidential candidate and founder of the Forward Party, point to automation for the major manufacturing job losses. Others acknowledge that automation played a role but also point to China's entry into the World Trade Organization in 2001, arguing that access to cheaper foreign labor markets has siphoned off American jobs. Abe Eshkenazi, CEO of the Association for Supply Chain Management, called it "extremely fickle" to bring back manufacturing for certain industries, specifically apparel and textiles, due to the labor costs. Even laptops, semiconductors and other electronics could be tough to make in the U.S. Employees at hotdog maker Kahn's & Company working the production line, Cincinnati, Ohio, 1950. Employees at hotdog maker Kahn's & Company working the production line, Cincinnati, Ohio, 1950. Marsh Photographers/Cincinnati Museum Center/Getty Finding that workforce is also a huge hurdle for companies to get around, and Eshkenazi said younger people aren't as interested in doing manual jobs. Some companies have even brought workers to the U.S. from Taiwan to solve labor shortage problems. "We will have those individuals, but the labor is just not there right now," he said. "The domestic supplier ecosystem, transportation, rail warehousing, talent development, all need to be developed. The infrastructure just isn't there in the short term, but we're already experiencing challenges in terms of warehousing and in terms of truck drivers and in terms of rail." A Manufacturing Mecca Macomb County, the third-smallest county in Michigan by size but the state's third most populous, has been a manufacturing mecca of sorts for decades—known primarily for factories associated with the "big three" automakers, General Motors, Ford and Stellantis (formerly Chrysler), in addition to building aircraft, spacecraft, ground vehicles, weapon systems and other equipment for U.S. defense. "We look at the opportunity to really kind of embed more of that workforce training and upskilling to make sure that our manufacturers are able to actually produce and use some of this technology to be very efficient," Vicky Rowinski, Macomb County planning and economic development director, told Newsweek. Chief Strategist to the President Steve Bannon speaks during the Semafor World Economy Summit 2025 at Conrad Washington on April 23, 2025 in Washington, DC. Chief Strategist to the President Steve Bannon speaks during the Semafor World Economy Summit 2025 at Conrad Washington on April 23, 2025 in Washington, DC. Kayla Bartkowski/Getty "We really like to get started young with [potential workers], letting them see that perhaps their next career move is here in Macomb County. Even if they go off to college they can come back here," Rowinski added. "We have seen an uptick in the number of international businesses that are looking for a footprint here in Macomb County." The majority of plans for U.S. manufacturing is focused on , their batteries and semiconductors. In Arizona, Taiwan Semiconductor Manufacturing Company is expanding its U.S. manufacturing investment by an additional $100 billion. The company announced in March that it has plans for three new fabrication plants, two packaging facilities and an R&D team center. It is the largest single foreign direct investment in U.S. history and is expected to create tens of thousands of jobs, according to the company. This aerial photo taken on August 10, 2022 shows the view of a Taiwan Semiconductor Manufacturing Company (TSMC) factory in Nanjing, in China's eastern Jiangsu province. This aerial photo taken on August 10, 2022 shows the view of a Taiwan Semiconductor Manufacturing Company (TSMC) factory in Nanjing, in China's eastern Jiangsu province. STR/AFP/via Getty Nearby, in Texas, Samsung made a $17 billion investment in manufacturing in 2021, which the company said would create 1,800 jobs over the next decade. Tesla is also planning to invest nearly $200 million to open a plant near Houston and county officials estimate the plant could employ up to 1,500 people, with salaries ranging between $50,000 and $150,000. But the real winners in the manufacturing renaissance in the U.S. are southern states, which accounted for nearly two-thirds of the increase in manufacturing facility construction in the two years to April 2024, data released last year showed. Playing in the South's favor is the number of "right to work" states, meaning people can't be obligated to join a union even if their employer has one. It has the potential to keep labor costs down, and North Carolina, South Carolina and Georgia, where manufacturing is rising, has some of the lowest union membership rates in the country. Electricity in the South also tends to run lower than other areas of the country, reducing overhead costs for a factory. Even if there is a rise in manufacturing jobs and people wanted to fill them, Port of Los Angeles Executive Director Gene Seroka noted that it probably won't be very big and the industry certainly won't look like it did decades ago. A truck driver passes stacked cargo containers at the Port of Baltimore in Baltimore, Maryland, on October 14, 2021. Closed factories, clogged ports, no truck drivers -- up and down the global supply chain there... A truck driver passes stacked cargo containers at the Port of Baltimore in Baltimore, Maryland, on October 14, 2021. Closed factories, clogged ports, no truck drivers -- up and down the global supply chain there are problems, raising concerns that it could disrupt the global economic recovery. More Jim Watson/AFP/via Getty A recurring theme in Trump's manufacturing push is what Grabow calls "a kind of politics of nostalgia"—a "romanticized," rose-colored-glasses vision of the assembly line days where union jobs provided for the family. This account does not fully acknowledge the realities then or the automated, high-tech reality of today's industry, which Yang said is factories filled with "robot arms as far as the eye can see." "What you're not seeing is investment and reshoring among American firms," Yang told Newsweek in response to Trump's tariff rollout. "What you're disinvesting." Yang warned that these blanket tariffs trigger "tougher pricing on all of [manufacturers'] components," followed by "tougher markets when they try and sell," because if they sell abroad "their margins will be lower." The photo taken on April 26, 2025 shows an employee working on a lithium battery production line at a factory in Huaibei, in eastern China's Anhui province. The photo taken on April 26, 2025 shows an employee working on a lithium battery production line at a factory in Huaibei, in eastern China's Anhui province. AFP/via Getty The result, he argued, isn't a manufacturing hiring boom, but instead a wave of layoffs and disinvestment in the industrial sector. "The tariffs as a reindustrialization policy are really boneheaded, and destructive," Yang said. Compounding the issue is the reality that reshoring a supply chain isn't an overnight shift; it's a yearslong process that hinges on long-term confidence in economic policy, several experts told Newsweek. Without that stability and predictable trade policy, many companies will be hesitant to commit to any expensive, long-term plans, leading to less investment into American supply chains. With such a deep investment needing to be made, it's unclear if America could surpass China's production in a manufacturing war. China's Rise to Power China did not become a manufacturing powerhouse by chance. Chinese leader Deng Xiaoping's reforms, beginning when he came to power in 1978, were aggressive and targeted and required Beijing to relinquish a level of state control. Experimental special economic zones in southern China, large industrial parks where logistics and supply chains became centralized, were key to the transition into a relatively freer market. Foreign investment arrived slowly at first, then all at once, drawn by tax breaks, favorable regulatory environments and the availability of manpower and machinery. Vertically integrated supply chains, as well as rail and port infrastructure that sprang from hubs like Dongguan and Shenzhen, on the border with Hong Kong, facilitated the rise of players like telecoms giant Huawei and EV titan BYD. By 1998, China's population had reached 1.25 billion. Its then leader, Jiang Zemin, declared that the newly established World Trade Organization "would be incomplete without China," a position backed by the United States under the conviction that its formal entry into global supply chains would benefit the U.S. In 2001, with U.S. manufacturing employment in decline, China joined the WTO with a labor surplus and a myriad of future entrepreneurs among its ranks. A wing spar assembly robot is pictured in the Boeing factory on October 23, 2017 in Everett, Washington. Boeing began production of the 777X jetliner, which will feature many of the fuel-saving innovations and comforts... A wing spar assembly robot is pictured in the Boeing factory on October 23, 2017 in Everett, Washington. Boeing began production of the 777X jetliner, which will feature many of the fuel-saving innovations and comforts of the Boeing 787. More Stephen Brashear/Getty "In the 1990s, China couldn't provide enough jobs through the state sector alone. There was a push to get folks off the 'iron rice bowl' and into the private sector. Beijing supported this effort by supplying facilities and equipment, and favorable policies helped further pave the way. Many Chinese interpreted these official initiatives as a broader green light for entrepreneurial activity," Paul Midler, author of Poorly Made in China, told Newsweek. In the early 2000s, factory owners worked together to drive China's rise to the top of the manufacturing world, Midler said. They shared supplier leads and traded technical knowledge and production shortcuts. "Information flowed fast and the network effects were powerful, creating a momentum that outsiders rarely saw and still don't fully understand," Midler said. Chinese manufacturing today accounts for roughly one-third of global output, the United Nations Industrial Development Organization estimates, a higher share than North America and Europe. China positioned itself at the center of global manufacturing by partially opening up to the rest of the world at the right time, incentivizing companies to move their manufacturing abroad. A sizable portion of its society still shares the characteristics of manual labor, toiling for long hours and sleeping in dormitories, sometimes 10 to a room. Last year, nearly 300 million Chinese people—over one-fifth of the population—were classified as migrant workers who made a living in cities where they did not officially reside, according to government data. But China's rising middle class and the emergence of high-value sectors like IT have also forced its leaders to reckon with cultural shifts associated with a much richer and smarter society. In recent years, the Chinese tech industry has rebelled against the expectation of grueling and illegal "996" schedules—9 a.m. to 9 p.m., six days a week. For years, the economic trend lines looked favorable to Beijing, which had spent decades shaping industrial policy. Made in China 2025, a 10-year blueprint to upgrade Chinese manufacturing in 10 strategic sectors, was perhaps the clearest articulation of the grand plan to dominate old and new industries including IT, robotics and green tech, by not only becoming self-reliant but by enlarging the critical dependencies of others on China, too. In automation, where successful integration can free up valuable human capital in every field, China has a commanding foothold. In 2023, China ranked third in the world for robot density in the manufacturing industry, behind South Korea and Singapore, according to the International Federation of Robotics. The United States was 10th. Workers build a Ford Focus on the assembly line at the Ford Motor Co.'s Michigan Assembly Plant December 14, 2011 in Wayne, Michigan. Workers build a Ford Focus on the assembly line at the Ford Motor Co.'s Michigan Assembly Plant December 14, 2011 in Wayne, Michigan. Bill Pugliano/Getty China pushed its risky model for globalization to the limit. As it chipped away at strategic industries overseas, including in the Global South, it expected the world to accept the same dependencies that Beijing itself would never countenance. "It's a model based on the wrong assumption that China is not big enough for the world. It's the other way around—China is too big for the world. China could produce for the moon if it were populated, but it isn't, so until we find another planet, China's model is wrong," said Alicia García-Herrero, chief economist for Asia-Pacific at the investment bank Natixis. "It's not just the U.S.—everybody is going to say: 'Wait a minute. Balance your model. This cannot be that you produce everything for everybody, everywhere.' China would not like to be deindustrialized either." The U.S. has little to gain by copying the Chinese model, even in part, García-Herrero told Newsweek. America's strengths lie in innovation, university and industry linkages, and access to other free markets. It will need the help of allies near and far—Mexico and especially India can build robots, too—and their cooperation in friendly supply chains ought to be won with carrots rather than sticks, she said, because "the U.S. cannot become self-reliant on its own." China's state-run media has largely dismissed Trump's pledge to revitalize American manufacturing as a means of addressing economic security concerns, but the derision appears to miss the point. While the U.S.'s market-oriented economy will not let it produce everything it needs, for everything else, non-Chinese alternatives will emerge. Chinese goods may continue to flow into the U.S. market via existing transshipment routes or by way of Chinese-owned manufacturing plants in third countries. But on the whole, the world seems to be headed toward a two-way split. Although many still see full divestment from China as high unlikely, especially for critical materials like rare earth metals, markets have a way of recalibrating themselves after a major shock, such as in the pandemic. People work at EV fast-charger manufacturer Kempower on April 23, 2024, in Durham, North Carolina. People work at EV fast-charger manufacturer Kempower on April 23, 2024, in Durham, North Carolina. Allison Joyce/AFP/via Getty It took China 15 years to become the world's factory and it could take half that time to establish new supply chains with multiple countries, García-Herrero said. Liu Pengyu, a spokesperson for China's embassy in Washington, D.C., said: "The achievements of industries such as automobiles and shipbuilding in China are the result of enterprises' technological innovation and active participation in market competition." "Economic and trade cooperation between China and the United States is mutually beneficial. Forceful decoupling will not only undermine the normal trade and investment but also hurt the stability of production and supply chains between the two countries and globally. This is not in the interests of any party, including the United States," Liu told Newsweek. The Politics of Manufacturing Recent years may not have been branded as a reshoring revolution quite like Trump's but they've quietly fueled a boom in U.S. factory construction. For Democratic Senator Tammy Baldwin, the push for increased American manufacturing stems from national security concerns, telling Newsweek "our national security is in jeopardy when we cannot make things here because we have lost the capacity to do so." She noted that the CHIPS Act, which was passed under former President Joe Biden with bipartisan support, created incentives to bring back semiconductor manufacturing to the U.S. as a matter of national security. "What we're spending building factories, adjusted for inflation, in 2024 was twice what it was in 2019," Dean Baker, economist and co-founder of the Center for Economic and Policy Research, said. "We've never seen a boom like that" in the postwar era, he added. According to FRED, total manufacturing construction spending topped $234 billion as of March 2025—a dramatic rise over the past decade. While the focus of U.S. manufacturing conversations is on semiconductors and cars, when it comes to what America is making, food, beverage and tobacco products are highest on the list. They account for about 17 percent of gross output in dollars—the highest of any subsector—according to the Department of Commerce. Chemical products plus petroleum and coal products are tied for second at 13 percent, followed by cars at about 10 percent. Construction of Amazon Mid-Atlantic Region data center in Northern Virginia, Loudoun County, USA. Construction of Amazon Mid-Atlantic Region data center in Northern Virginia, Loudoun County, USA. Getty Bannon, a self-described populist and prominent figure in crafting the Make America Great Again movement, called out American manufacturing as little more than "final assembly" work—especially in the auto industry, where factories often import all the parts and simply put them together in the U.S. Instead, he argued, Trump's focus is on "bringing high value-added manufacturing jobs back." In addition to those jobs, Bannon described an "entire ecosystem" to be developed around the factories, from small supporting services and businesses like coffee shops, restaurants and stores for factory workers to go to nearby, to larger-scale operations such as consulting and engineering design firms that support the industry more broadly. Indeed, manufacturing can have a trickle-down effect. For every $1 spent in manufacturing, there's a $2.64 impact to the overall U.S. economy. And for every one worker in manufacturing, another 4.8 workers are added to other sectors. You need construction workers to build factories, people to supply the materials and truckers to move the product. And if a manufacturing boom hits an area and leads to an increase in people moving there, that area will need to offer more places to eat and shop, among other services, leading to more job creation. "That one manufacturing job is going to crowd in jobs in non-traded goods and services that help that manufacturing job to exist. So reshoring manufacturing would lead to expansion in other lines of business," Gordon Hanson, a Professor of Economics, Harvard Kennedy School, told Newsweek. The service business is "very much a gig economy, but here in manufacturing you have a chance to get a skill set that you can use over a long period of time and actually have a high paying job," Bannon said. He maintained there's a strong appetite for these roles, as did Baldwin, who described them as "very attractive," noting that the plants are "not your grandfather's factory." However, it's possible that even if there is a rise in manufacturing, workers won't be the ones benefiting the most. Or, at least not in the traditional sense. Factories will be driven by artificial intelligence and it's possible those jobs will go to college graduates who know how to program the technology. Yang warns that automation is going to slash what may be thought of as the typical factory role. "The industries that are most likely to need human workers tend to be the dirtiest, the least appealing, and the cheapest," he said.
Epoch Times
13-05-2025
- Business
- Epoch Times
Chinese Leader Xi's Southeast Asia Tour Delivers Underwhelming Results: Analysts
News Analysis Beijing's recent engagements with Southeast Asian countries—including a trip by Chinese leader Xi Jinping to Vietnam, Malaysia, and Cambodia—resulted in exchanges and commitments to deepen economic cooperation. Meanwhile, efforts by the Chinese Communist Party (CCP) to find common cause with those nations against the United States' toughening trade policies have been less successful. Xi's first tour abroad of 2025, from April 14 to April 18, saw China ink dozens of agreements with each of the countries he visited. Many of these were memoranda of understanding on cooperation in fields such as infrastructure, artificial intelligence (AI), agriculture, and trade. At the same time, Southeast Asian governments have been taking steps to reach deals with Washington after U.S. President Donald Trump put a three-month pause on his reciprocal tariffs targeting dozens of countries worldwide. Southeast Asian countries, apart from building up their own industrial bases, have become attractive destinations for Chinese manufacturers looking to circumvent U.S. tariffs. These manufacturers sell their products and raw materials to those countries, which are then resold to the United States in a process called transshipment. Trade volume between the United States and Southeast Asian countries reached $476.8 billion in 2024, with U.S. exports accounting for $124.6 billion of that total, Related Stories 4/29/2025 4/22/2025 Meanwhile, the trade volume between China and Southeast Asia rose to $982.3 billion that year, according to the Chinese state-run Xinhua News Agency. A report by the Asia Society Policy Institute, published in February, U.S. officials have called out transshipment, which took off following the tariffs Washington imposed on China during the first Trump administration. The issue, along with the rise in imports of American goods, is a significant factor in trade negotiations with Southeast Asian nations. Anti-US Bloc Unlikely Sun Kuo-hsiang, a professor at Nanhua University's Department of International Affairs and Business in Chiayi, Taiwan, told the Chinese edition of The Epoch Times that the CCP's outreach is aimed at winning over its neighbors to create a united front against the United States and establish China as the dominant force in Southeast Asia. The U.S. duties on goods from Vietnam, Malaysia, and Cambodia were initially set at 46 percent, 24 percent, and 49 percent, respectively, but were reduced to the global rate of 10 percent on April 9. U.S. President Donald Trump holds up a chart while speaking during a 'Make America Wealthy Again' trade announcement event in the Rose Garden at the White House in Washington on April 2, a press conference on April 17, He Yadong, spokesman for the Chinese Ministry of Commerce, did not explicitly mention the U.S. tariffs, but said Xi's tour was an opportunity to work with neighboring countries and build stronger supply chains. Although Xi received a warm welcome from his hosts, Sun believes that Beijing's attempt to create 'some form of an anti-U.S. alliance' is unlikely to bear fruit, given that Southeast Asian countries would 'prefer to keep a distance [from China] and adopt a pragmatic diplomatic strategy' based on their core national interests. Southeast Asian countries place greater value on trade relations with the United States and the market opportunities that this relationship affords them, and as such, treat China's initiatives with a high degree of caution, Sun said. 'They are concerned about appearing overly pro-China lest this invites sanctions from the United States,' he added, and are unwilling to sacrifice their economic bargaining ability to help the CCP further its strategic goals. Clamping Down on Chinese 'Production Laundering' The countries Xi visited have not been as keen to repeat the CCP's narrative on the United States. On April 18, the last day of Xi's tour, Vietnamese Prime Minister Pham Minh Chinh emphasized his country's 'unique bond' with the United States, adding that Hanoi has 'largely addressed U.S. concerns' by reducing taxes and increasing imports of American goods. Vietnam 'remains ready to engage in discussions and negotiations,' according to a Vietnamese government website post. In a Vietnamese trade ministry directive seen by Reuters, Hanoi has instructed officials to crack down on transshipment and other forms of 'trade fraud,' noting that such practices would complicate the country's efforts to 'avoid sanctions that countries will apply to foreign goods.' Though the directive did not name China or the United States, 'Vietnam's goods imports are nearly 40 percent from China and Washington has openly accused Beijing of using the Southeast Asian nation as a transhipment hub to dodge U.S. duties,' the The directive is dated April 15, the day Xi left Vietnam for Malaysia. Bloomberg Vendors wait for customers at Tan Binh Market, the largest wholesale clothing and textile market in Ho Chi Minh City, Vietnam, on April 3, is a supplier for many Western companies in Southeast Asia, and is heavily reliant on imported Chinese raw materials. According to Vietnamese customs data, the country's trade surplus with the United States in 2024 was $123 billion; meanwhile, in the first three months of 2025, Hanoi exported $31.4 billion in goods to U.S. buyers, while the value of Chinese imports to Vietnam in the same period was $30 billion. Cambodia, seen as having a closer relationship with communist China than Vietnam, has also taken steps to clamp down on the transshipment of Chinese goods. According to the Cambodia China Times, a Chinese-language outlet based in the country, the Cambodian government issued amended regulations immediately following Xi's return to China, stipulating greater measures to prevent Cambodia from being used as a 'production laundering hub' for Chinese goods. On April 16, Cambodian Deputy Prime Minister Sun Chanthol led a delegation in holding an initial round of trade talks with U.S. Trade Representative Jamieson Greer via video conference. The proposed regulations on transshipments were discussed as part of Phnom Penh's attempts to have Washington waive or lower its planned 49 percent tariff on the country. Balancing Ties As with Vietnam, the Trump administration has also criticized Cambodia for helping Chinese producers evade U.S. tariffs. Regarding Cambodia–China cooperation, Cambodian Prime Minister Hun Manet stressed that the 'all-weather ties' he and Xi promoted during their meeting were based on equality and mutual benefit, and that claims of Cambodia 'being controlled' by or 'losing sovereignty' to Beijing were out of the question. Hun Manet added that while the recently opened Ream Naval Base was modernized with Chinese support, and the two countries launched joint military exercises after Xi's visit, the base is not for China's exclusive use. On April 19, two Japanese military vessels While facing a lower 24 percent tariff, Malaysia on April 25 also announced that it would increase imports from the United States, 'signalling a weakening of any united regional front against the pressures of a trade war,' Huang Tsung-ting, a scholar of the CCP's political and military strategy at Taiwan's Institute for National Defense and Security Research, reliance on important Chinese materials. Although Southeast Asian nations choose to 'rely on the United States' for their economic and trade relations, Huang believes that Washington would be wise to offer the region incentives to avoid further siding with China. Tang Jingyuan, a commentator on Chinese current affairs, told The Epoch Times that most of the agreements signed between Beijing and the three Southeast Asian countries were unilateral concessions by the CCP, such as exports of rail and AI technology, and hardly represent a meaningful deepening of ties. In Cambodia, Xi pledged to help the country finish a stalled dam project worth more than $1 billion. On April 21, after Xi's trip, the Chinese commerce ministry said that Beijing 'firmly opposes any party reaching a deal at the expense of China's interests,' and that 'appeasement will not bring peace, and compromise will not be respected.' Should countries reach trade deals that harm the CCP's interests, 'China will never accept it and will resolutely take reciprocal countermeasures,' the ministry warned. The CCP 'lacks trust and appeal,' Sun Kuo-hsiang, the Taiwanese professor, said on an April 22 Luo Ya and Yang Xu contributed to this report .
