If Trump is trying to suppress China, he’s going about it all wrong

Open the Editor’s Marking Free

Rulla Khalaf, the FT editor, chooses its preferred stories in this week’s news.

The writer is a professor at the University of Hong Kong Science and Technology and “New China Playbook. Beyond socialism and capitalism “

Technological jumps are rarely born in comfort. They are falsified in conflict, competition and need. From nuclear energy to space race, and now the competition between the United States and China, innovation accelerates when the stakes are the highest. US President Donald Trump’s catastrophic tariff war can cause serious economic pain on China, but it can also ignite technological growth, not formation, but as necessary.

Although the most urgent economic challenge of China remains internal, 125 percent of US dollar tariffs, which should have a clear pretense to act aggressively, tighten its survival instinct.

If Washington’s goal is to suppress China’s rise, everything goes wrong.

Tariffs simply do not change trade flows. They redirect resources and redeem industrial structures. If Trump’s purpose was to restrain China’s technological progress, he would keep tariffs lower on most Chinese exports of the United States, closing the country in the main production of a lower margin. He will encourage China’s high technology exports, making sure that progress in his progress is made.

But this is the opposite. Surprisingly, “China’s shock” pushed us from low-level production, “Trump shocks” to redistribute higher value, advanced technologies that directly compete with the United States.

Beijing gave a conclusion. Innovation and control of basic technologies is the only stable defense against tariffs. Companies with preferential technology such as Huawei and BYD are more isolated from tariffs and supply chains. China plans a new technological supply model. Regional production, technological sovereignty and global supply chain redundancy.

Never have technology and innovation as central The national agenda of China, as they are today. Is “AI +” strategy Aim to quickly install AI in all possible areas. Deepseek created by the low price of AI was born under the restrictions. Now it is located around the world.

In 2019, a RMB200BN The Bottleneck Technologies Foundation was founded in three years to provide 70% internal replacement in heavy economic areas. China greatly invests in photonik quantum calculations, building low orbital satellite networks to the asterisk and lay the foundation for commercial cosmic stations. It targets the breakthrough equipment and leads the world in the factory robot density.

If China is deviated from the agendas led by the state, the tariff shocks it back on an economic basis. The trading war acts as a reset, reaffirming the leadership of growth and competition. Supporting the private sector shows signs of rebirth. Tax Relief and Business Policies are returning.

Technological restrictions often have unforeseen consequences. Instead, they redirect the requirement in case. Take semiconductors. China consumes one-third of world chips and once rely on US suppliers. Sanctions have not reduced that requirement. They reviewed it. Now home companies such as SMEs report record revenue and restart in R & D.

As Chinese say, good companies do not “lie flat”, they adapt. The first channel of Trump’s sanctions caused globalization fury. Chinese companies quickly moved to move production, expand their own markets and changing their business models. Shenzhen’s transfer is now 51 percent of the African smartphone market. Xiaomi, which produces smartphone, is 75% abroad.

Raising tariffs also accelerate the movement of digital supply, service and cloud infrastructure in digital platforms, AI and electronic trading on the strengths of China. Despite the production power plant, China is less than 6 percent of global services, leaving a huge room to grow as such. Explains: compared to goods.

History has previously seen this dynamic. When Napoleon tried to communicate British trade through the continental system, Britain was aimed at Asia, Africa and America, industrialization and mechanization. The growth and pressure of the cost of the salary and the catalysts of the steamed engine, textile mills and sea energy.

The US can repeat that error. If America is again large, its goal is to be a Trump from comfortable in China. He must be afraid of constrained.