Trump’s Tariff War Overturns the World

Mark O'Neill April 23, 2025 18:05

“I export 80 per cent of my output to the United States. What am I going to do?” Liang Lin manages a shoe factory in Foshan. “I cannot afford to pay my workers, so I have let most of them go home.”

Across the world, in Westport on the west coast of Ireland, the 1,500 workers in an American firm that produces the world’s entire supply of Botox are also full of fear and anxiety.

President Donald Trump has demanded that the U.S. pharmaceutical industry move their plants back home.

“People are holding their breath,” said Geraldine Horkan, chief executive of the Westport Chamber of Commerce. “It is like an aeroplane circling in a holding pattern.”

Tens of thousands of factory managers and workers, from Mexico to Mozambique, Kenya to Kazakhstan are in the same state of apprehension.

On April 2, Trump announced tariffs on nearly all countries in the world, with a maximum rate of 49 per cent. On April 10, he announced a 90-day suspension of the tariffs, with the exception of China, which has a rate of 145 per cent.

It means, in effect, that many Chinese companies cannot this year sell to the U.S. market. Last year China exported US$582.4 billion of goods to the U.S.

“We are going through fire and water,” said Wang Xin, president of the Shenzhen Cross-Border E-Commerce Association, which represents more than 2,000 sellers in China. “Chinese sellers will not be able to take on the extra (financial) burden from the U.S. tariff hikes.”

Liang in Foshan said: “What can I do with my products? Sell them to other foreign markets or in China? Competition in the domestic market is intense and profit margins very thin.

“People do not want to spend. The property market has collapsed. The principal asset of most people is their apartment. It is often worth less than what they paid for it. In addition, we have thousands of people out of work,” he said.

Countries around the world, both developed and developing, do not welcome a surge of Chinese products that would otherwise have been sold in the U.S. They would damage, or even wipe out, their manufacturing in the sectors affected.

The prevailing sentiment is uncertainty. “It is extremely difficult to make long-term plans now,” said Hu Jianlong, chief executive of Brands Factory.

This is because of the chaotic nature of Trump’s government. His tariff plans have caused the loss of billions of dollars in value in U.S. and foreign stock markets.

They have been strongly criticised by leading American bankers and economists, who say they will lead to recession and higher domestic prices, the opposite of what he promised in taking office in January.

Also members of his cabinet offer different explanations of the purpose of the tariffs.

For example, Treasury Secretary Scott Bessent said on Tuesday that a trade war with China was “unsustainable”. He told investors at a conference hosted by JPMorgan that he expected the two countries would reach a deal at some point.

“The high tariffs the US and China have imposed on each other’s imports amount to what are in effect trade embargoes and the status quo is unsustainable. President Trump is not trying to decouple from China,” he said. So what does Trump want?

With such uncertainty. who can make long-term investment decisions, in the U.S. or abroad?

In a China Mobile shop in Shenzhen, two staff members discussed the Tariff War,

“We do not buy many American goods so will not be much affected,” one said. “We should be patriotic and buy Chinese. I eat Big Macs often but perhaps I should stop from now on.”

The other said: “perhaps this proves that we do not need the U.S. any more. China can make what it needs. Has the period of the foreigners passed?”

Mark O'Neill

A Hong Kong-based writer, teacher and speaker.