Western economists have for months been keeping a hawkeye on China, predicting its economy is headed for a brick wall. But instead, it’s US President Donald Trump who’s driving his runaway golf cart straight through the vitals of the American economy. “The Chinese must be cracking open the champagne,” says one market analyst with a mix of irony and sarcasm.

Suddenly, Japan, South Korea, the EU, and Canada are sounding more cordial toward China. Even India may be ready to pass around the peace pipe. “When the US is like this, China is coming up as a genuine economic partner,” says one analyst.

Since April 3, grandly dubbed Liberation Day by Trump, the world’s been slack-jawed at the madness of his economic moves and the half-baked justifications rolled out by his entourage. On Monday, a brief rally followed news of a 90-day delay in the tariffs until the White House squashed the story and sent stocks tumbling again.

For sheer absurdity, the tariffs slapped on the penguins of Heard Island and McDonald Islands stole the show. But Commerce Secretary Howard Lutnick had a quick-fire excuse ready for TV: the penguins were taxed to “prevent potential loopholes.” Well, that’s alright then: memes of penguins throwing Teslas into bins and leading naval invasions of Washington can all stop.

Trump’s base insists there’s a method in the madness. Maybe he moved too fast, they concede but for two decades, China and others have been slapping tariffs on American goods while flooding the US with their own. Yet even that logic falters: Vietnam offered to slash tariffs on US goods to zero, and the Trump team inexplicably turned it down.

The absurdity deepens with Vietnam, now facing whopping 46 per cent tariffs. Over 50 per cent of Nike’s footwear is made there, meaning a US company must now hike prices for American consumers.

Has Trump pushed it too far? Possibly. By Monday night, even Republicans seemed rattled by backlash from voters. US farmers are worried about Chinese retaliatory tariffs sending farm incomes plummeting. Steelworkers, promised a revival, are discovering tariffs have spiked input costs without boosting jobs.

Republican push back

Senator Rand Paul, albeit never a full-on Trump loyalist, is now openly questioning the global tariff war. Close behind him: Senator Ted Cruz. Meanwhile, two other senators are scrambling to table a bill to claw back presidential power on tariffs. Elon Musk, too, is reportedly at odds with Trump’s tariff cheerleader-in-chief, Peter Navarro.

Trump’s trade chaos is just one piece of a broader unravelling. Allies are bewildered at the lack of consistency and bluster. Meanwhile, China’s seizing the moment to reposition itself as the adult in the room. The question isn’t just whether Trump has gone too far but whether the US can claw its way back. Traditional US partners are hedging their bets, preparing for a post-American order.

The main targets of US tariffs aren’t blinking. China’s vowed a “fight to the end against unilateral US bullying,” and pledging tit-for-tat taxes. It’s already banned exports of seven key rare earth metals, and even dug up Ronald Reagan’s 1987 speech warning against tariff damage. If Trump follows through, Chinese goods could face tariffs of up to 104 per cent.

India: Opportunities, risks

For India, Trump’s chaos presents opportunity and risk. On one hand, it could open Chinese doors for Indian exporters, particularly in pharmaceuticals, textiles, and IT services. But the unpredictability also unnerves policymakers. Defence cooperation and tech partnerships could all suffer collateral damage. There’s also concern that US-India ties, once strategic, are now transactional. And India’s apprehensions go well beyond trade. With countless Indians, students, professionals, families, living in the US, there’s worry over visas and residency that threatens their futures.

Can India dodge the worst of this economic crossfire? Possibly. We’re open to a deal, and some US goods could get cheaper in Indian stores. The bigger flashpoint is agriculture, especially dairy. Some, though, hope Trump’s tariff offensive could prod the Modi government to relax long-standing economic controls.

Worst of all, the self-declared beacon of democracy and the rule of law seems to be throwing both out the window. In a country where police wear name badges and bodycams, masked ICE agents have been grabbing people from streets and homes. Some have been deported to violence-racked third countries despite court orders. Others, merely voicing support for Palestine, have been packed off without warning. The Chinese, watching all this, are now asking: You still think your system is better than ours?

Even innocent tourists aren’t spared. British traveller Rebecca Burke, trying to exit the US, was locked in detention for 19 days. She was lucky — media outrage in the UK got her out quicker than most. Her advice to prospective US visitors? Don’t.

Published on April 8, 2025