Trump’s old concept of tariffs originates in U.S. policies from the 19th century. He believes that he excels in the art of creating a “level playing field” to generate jobs at home. But what he is proposing would be the highest tariff level since the Great Depression.

Donald Trump’s trade policies have been characterized by an aggressive use of tariffs, driven by his belief in balancing bilateral trade and prioritizing American production. While these measures have reshaped trade dynamics and escalated protectionism within the U.S., they have also inadvertently strengthened China's global economic position and highlighted the limitations of decoupling efforts.

BRICS countries, with a combined GDP approximately 1.5 times that of the United States, can be expected to retaliate against promised U.S. tariffs. These countries — many of which are major traders with China — are likely to make Donald Trump regret his bellicose bullying.

I saw nothing but denial in my recent post-US-election tour of Asia, with stops in Hong Kong, Shenzhen, Beijing, and Singapore. Taking a cue from surging global equity markets, Asians are making every effort to wish away problems at home and abroad.

While President-elect Donald Trump’s tariff threats are likely to dominate headlines in the near term, China’s industrial overcapacity remains a larger, core challenge for the global economy and trading system in the coming years. With recently implemented tariffs by advanced and emerging economies, and Chinese responses and macro stimulus, how this issue may evolve over the next few years is becoming clearer – with significant geopolitical implications.

The Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade pact, integrates 15 diverse economies to revitalize globalization, enhance trade rules, and bolster ASEAN’s centrality in regional trade. Amid U.S.-China tensions, RCEP offers opportunities for supply chain shifts and industrial upgrades while positioning China to deepen ties with developing regions through initiatives like the Belt and Road.

The new Japanese prime minister wants to reassert Japan’s standing as a regional power, which will challenge the expectations of Washington elites and further rattle a region that is seeking to skirt the dynamics of great power competition.

The country is capable of mitigating any ill effects should Trump return to the aggressive form of his first term. China may feel some pressure, but it has built a multilayered economic defense involving domestic demand, fiscal policies, high-tech innovation and international cooperation.

China’s recent monetary stimulus measures initially boosted stock markets but quickly fell short of reviving domestic demand and investment. A "whatever it takes" approach with more forceful fiscal stimulus is essential to reset consumer and investor confidence.

Republican proposal, along with heavy tariffs promised by Donald Trump and certain retaliation by U.S. trading partners, would drive the global economy into a new Great Depression. Rather than trying to punish China, the U.S. should continue to maintain dialogues and establish practical trade and investment collaboration.