Tariffs haunt the global economy once more. Washington under Donald Trump, driven by a potent mix of economic anxiety and political nostalgia, slapped high duties on imports from virtually every country, dreaming of smokestacks rising again across the Rust Belt.
It was all about making America great again – MAGA. Many saw it as a desperate attempt to reclaim a manufacturing supremacy the US once enjoyed, now perceived as lost to the East, primarily China.
Yet economists rightly warn this is an impossible path. Why? Because the past three decades did not merely shift factory jobs – they forged an industrial ecosystem in China so vast, integrated, and advanced that tariffs are less a strategy than a self-inflicted wound for the West.
China has executed a masterful, long-term strategy to become the world’s indispensable factory. It took decades to reach this point. Catching up is a massive task. Once dismissed as copycats, the Chinese are no longer imitating – they are innovating.
China is not just about individual factories; it is about clusters. Shenzhen is not merely electronics; it is an entire universe of suppliers, component makers, prototyping labs, and logistics hubs packed within a few square miles.
This agglomeration economy creates unrivalled efficiency and speed. Replicating a single factory in Ohio ignores the critical mass of supporting industries – resin suppliers, precision toolmakers, specialised engineers – that coalesced in China over decades. Tariffs cannot rebuild this intricate web overnight, or even over a decade.
China’s domestic market is a behemoth. Massive internal demand allows manufacturers to achieve economies of scale unimaginable elsewhere, driving unit costs down to levels Western producers cannot match, even with tariff protection. It also provides resilience when global demand fluctuates. Tariffs might make Chinese goods slightly more expensive in the US, but they do little to dent China’s scale advantage.
The cheap labour trope is obsolete. China has invested massively in engineering talent, vocational training, and STEM education. It now produces more engineers and scientists annually than the US, the European Union, and Japan combined. This deep talent pool drives relentless innovation in high-value sectors such as green tech, renewable energy, electronics, and advanced materials. Tariffs cannot conjure up a comparable skilled workforce in the West.
China has vertically integrated critical supply chains, particularly in clean energy and electronics. It dominates rare earth processing essential for EVs and smartphones, controls vast portions of battery component manufacturing, and leads in solar panel production from polysilicon to finished modules. Tariffs on finished goods often simply increase costs for Western consumers and manufacturers.
While the West debated industrial policy, China implemented it with ruthless focus. Massive state-backed investment in research and development, and strategic acquisitions, propelled Chinese firms to the forefront of key technologies. Huawei in 5G, BYD in electric vehicles, CATL in batteries – these are not low-cost copycats, but global leaders in innovation and efficiency. Tariffs may slow their US market access slightly, but they also push Chinese firms to expand elsewhere, deepening their global reach.
China is not just exporting to the world – it is integrating with the world on its terms. The Belt and Road Initiative builds infrastructure that locks economies into Chinese supply chains. Investments in Africa and Southeast Asia secure raw materials and create new markets. While the US erects tariff walls, China builds bridges, cementing its role as the central node in global manufacturing networks.
Is the West collapsing? Hardly. Stagnation is the greater threat. Predicting Western collapse is hyperbolic. The US and EU still possess immense reserves of capital, institutional strength, and innovation potential. But strategic stagnation, fuelled by misguided policies such as blanket tariffs, is the real danger. Tariffs act as a regressive tax, fuelling inflation and harming the very industries they aim to protect. Retaliatory tariffs from China and others hurt Western exporters, particularly farmers.
The US tariff gambit is not a bold strategy but a symptom of denial. China won the manufacturing crown not through short-term tricks, but by systematically building an industrial ecosystem of unmatched scale, integration, and sophistication. Tariffs are a blunt instrument against this entrenched system – they risk hurting the West more than China.
The West is not collapsing, but its refusal to move beyond protectionist whack-a-mole towards a coherent, investment-driven industrial vision ensures China’s dominance will persist – and likely grow. Winning requires building, not barricading. The time for delusion is over.
Professor Datuk Dr Ahmad Ibrahim is affiliated with the Tan Sri Omar Centre for STI Policy Studies at UCSI University and is an associate fellow at the Ungku Aziz Centre for Development Studies, Universiti Malaya.
The views expressed here are the personal opinion of the writer and do not necessarily represent that of Twentytwo13.
