New Delhi:

India’s manufacturing industry is bearing the brunt of a fallout between the United States and China over threats of a trade and tariff war by the incoming Trump administration, and its retaliatory measures imposed by Beijing.

In recent years, under its flagship ‘Make in India’ programme, India has seen exponential growth in key sectors like solar power, electronics and mobile manufacturing, and the automobile sector, especially for electric vehicles or EVs – all of which are directly or indirectly dependent on raw materials, components, and ancillaries supplied by China.

As China prepares for an imminent face-off with the US, which may be just days away with Donald Trump’s return as President on January 20, Beijing has already made the first move by taking some precautionary measures as a warning to Washington that it too will suffer the trade war.

China has put restrictions on the export of key raw materials, essential rare earth minerals, components, high-tech equipment, and machinery which are needed to manufacture solar panels, its parts, mobile phones and other gadgets, as well as EVs and its batteries.

These curbs not just pertain to direct exports to the United States, but to any other country which uses them to manufacture finished products meant to be shipped to the US.

In December 2024, China banned the export of gallium and germanium, which are vital for solar cell production. Shortly after that, it also banned antimony, critical for semiconductors and essential defence technologies. Earlier this month, Beijing further declared that it will now add lithium extraction and battery cathode technologies – which are crucial for EV battery manufacturing – to its controlled export list.

With the US having reduced its dependence on China for a large part of its overall imports, Washington has, in recent years, increasingly turned to New Delhi as an alternative to Beijing to fill the deficit. And so, China’s latest curbs, though aimed at the US, has indirectly hurt India too.

“Indian firms in electronics, solar, and EV sectors are facing major delays and disruptions as China has blocked exports of inputs and machinery,” economic think-tank GTRI founder Ajay Srivastava said, adding that “India is particularly vulnerable to China’s export restrictions, as many of its industries depend on Chinese machinery, intermediate goods, and components.”

“This also signals deeper geopolitical tensions and trade war. We hope India-specific restrictions go away soon as they will also hurt China,” he added.

India’s imports from China increased to $101.73 billion in 2023-24 from $98.5 billion in 2022-23.

The think-tank even suggested that China’s moves may be double-edged, as Beijing has been displeased for a while over New Delhi’s restrictions on Chinese investments and visas for its nationals.

In 2020, shortly after the deadly Galwan Valley clash between Indian and Chinese soldiers in eastern Ladakh, the Government of India had made it mandatory for countries sharing land borders with India to seek its approval for investments in any sector. The move was also made keeping in mind India’s national security objectives in its volatile neighbourhood.
 

New Delhi:

India’s manufacturing industry is bearing the brunt of a fallout between the United States and China over threats of a trade and tariff war by the incoming Trump administration, and its retaliatory measures imposed by Beijing.

In recent years, under its flagship ‘Make in India’ programme, India has seen exponential growth in key sectors like solar power, electronics and mobile manufacturing, and the automobile sector, especially for electric vehicles or EVs – all of which are directly or indirectly dependent on raw materials, components, and ancillaries supplied by China.

As China prepares for an imminent face-off with the US, which may be just days away with Donald Trump’s return as President on January 20, Beijing has already made the first move by taking some precautionary measures as a warning to Washington that it too will suffer the trade war.

China has put restrictions on the export of key raw materials, essential rare earth minerals, components, high-tech equipment, and machinery which are needed to manufacture solar panels, its parts, mobile phones and other gadgets, as well as EVs and its batteries.

These curbs not just pertain to direct exports to the United States, but to any other country which uses them to manufacture finished products meant to be shipped to the US.

In December 2024, China banned the export of gallium and germanium, which are vital for solar cell production. Shortly after that, it also banned antimony, critical for semiconductors and essential defence technologies. Earlier this month, Beijing further declared that it will now add lithium extraction and battery cathode technologies – which are crucial for EV battery manufacturing – to its controlled export list.

With the US having reduced its dependence on China for a large part of its overall imports, Washington has, in recent years, increasingly turned to New Delhi as an alternative to Beijing to fill the deficit. And so, China’s latest curbs, though aimed at the US, has indirectly hurt India too.

“Indian firms in electronics, solar, and EV sectors are facing major delays and disruptions as China has blocked exports of inputs and machinery,” economic think-tank GTRI founder Ajay Srivastava said, adding that “India is particularly vulnerable to China’s export restrictions, as many of its industries depend on Chinese machinery, intermediate goods, and components.”

“This also signals deeper geopolitical tensions and trade war. We hope India-specific restrictions go away soon as they will also hurt China,” he added.

India’s imports from China increased to $101.73 billion in 2023-24 from $98.5 billion in 2022-23.

The think-tank even suggested that China’s moves may be double-edged, as Beijing has been displeased for a while over New Delhi’s restrictions on Chinese investments and visas for its nationals.

In 2020, shortly after the deadly Galwan Valley clash between Indian and Chinese soldiers in eastern Ladakh, the Government of India had made it mandatory for countries sharing land borders with India to seek its approval for investments in any sector. The move was also made keeping in mind India’s national security objectives in its volatile neighbourhood.
 

Washington DC:

The thought of China is haunting Donald Trump who is troubled over Beijing’s growing influence right under US’ tail – the Panama Canal – a bridge connecting the Atlantic Ocean and the Pacific Ocean through strategically located Panama, the country which links North and South America.

US President-elect Trump, who is always ready to threaten others with tariffs, is also perturbed by Panama charging “excessive tariffs” for the use of the Panama Canal. So unsettled is he, by the combination of these two factors, that Mr Trump has openly declared that the US might consider taking control of the Panama Canal.

Writing about his concerns on his social media platform Truth Social, Donald Trump warned that he would never let the Panama canal fall into the “wrong hands.” Reminding the government in Panama that the canal was originally built by the United States more than a century ago, Mr Trump wrote “It was solely for Panama to manage, not China, or anyone else”.

He further re-posted a video of himself titled “We would and will NEVER let it fall into the wrong hands!”

BRIEF HISTORY OF THE PANAMA CANAL

Till the early 20th century the shortest way to reach the Pacific Ocean from the Atlantic Ocean and vice versa was to either sail around Cape Horn located in Chile at the southern tip of South America or to sail through the Strait of Magellan – also at the southern end of South America – in Chile. Both meant sailing around the entire continent of South America and nearly reaching Antarctica before sailing back up either into the Pacific or the Atlantic – this was neither economical, nor efficient.

After much thought, research and survey, a narrow, but possible way was discovered cutting across the Isthmus of Panama. However, there was a herculean challenge to be overcome in order to achieve that. The waterway was at different levels and there was no way a ship could either climb or descend where there was a sudden change in topography. For the waterway in the isthmus to be converted into a man-made canal, it would require an engineering marvel – one that was both inconceivable and unheard of in the early 20th Century.

The United States of America was the only nation at the time that had the technical knowledge and expertise to be able to make it happen. And so, in May, 1904 – less than a year after Panama declared Independence from Colombia in November, 1903, the US began the construction of the Panama Canal. A treaty was signed between the United States and Panama under which the canal would be constructed and managed by the US. After 10 years of engineering works round-the-clock, the Panama Canal became a reality in August, 1914 with the SS Ancon becoming the first ship to pass through the canal.

The US continued to control and operate the canal and its surrounding areas until a new agreement was signed between Panama and the US called the Torrijos-Carter Treaty in 1977. This provided for the handover of the canal to Panama after joint operations for nearly two decades. The Panamanian government took full control of the canal in 1999.

DONALD TRUMP vs PANAMANIAN PRESIDENT JOSE MULINO

Apart from the warning that the US would never allow operations of the Panama Canal to be handed over to another country amid China’s growing influence and muscular posturing globally, Donald Trump expressed his displeasure over “very high” tariffs being charged by Panama.

Writing on Truth Social, Mr Trump said “The fees being charged by Panama are ridiculous, especially knowing the extraordinary generosity that has been bestowed to Panama by the US.”

“It was not given for the benefit of others, but merely as a token of cooperation with us and Panama. If the principles, both moral and legal, of this magnanimous gesture of giving are not followed, then we will demand that the Panama Canal be returned to us, in full, and without question,” Mr Trump added.

Hours after Donald Trump’s warning, the Panamanian government responded, though without naming the US President-elect. Panama’s President Jose Raul Mulino dismissed the threats by posting a video on social media platform X that “Every square meter of the Panama Canal and its adjacent areas belongs to Panama and will continue belonging to Panama.”

“The canal has no direct or indirect control from China, nor the European Union, nor the United States or any other power,” President Mulino said, adding that “As a Panamanian, I reject any manifestation that misrepresents this reality.” His video message was in Spanish.

Mensaje del Presidente José Raúl Mulino pic.twitter.com/DMXU8qAuNT

— José Raúl Mulino (@JoseRaulMulino) December 22, 2024

President Mulino also said he hopes to have “a good and respectful relationship” with the incoming Trump administration. Donald Trump responded soon after the posts by the Panamanian President but kept everyone guessing when he wrote “We’ll see about that!”.

Meanwhile, amid the power tussle between the US and China in terms of its military and naval prowess, it is important to note that China now has the world’s largest navy, surging past the United States. China has a declared fleet size of more than 370 ships and submarines. This is significantly larger than the fleet size of the US Navy, which is 290 ships and submarines.

The Panama Canal is among the most crucial waterways of the world in terms of trade and commerce, and freedom of navigation of the seas has been among the topmost priorities of the democratic world, and a cornerstone of its policy.
 

Washington DC:

Sun Tzu, A Chinese military general, strategist, and philosopher who lived approximately in the 5th Century BC, is best known for his famous book ‘The Art Of War’. In it, he wrote a proverb well-known to the world even today – “Keep your friends close, but your enemies closer”. US President-elect Donald Trump seems to have taken a leaf out of Sun Tzu’s book when he invited Chinese President Xi Jinping to his inaugural ceremony in Washington DC scheduled for January 20th.

President Xi, who perhaps is also familiar with Sun Tzu works, read right through Donald Trump’s invite and has politely declined it, as per the latest reports.

Donald Trump’s unprecedented decision to invite the Chinese President astonished officials in Washington and many others beyond. “A foreign leader has never attended the inauguration of a US President,” said the US State Department after hours of looking up official records dating back to 1874.

“It is, however, common for Ambassadors and other diplomats to attend the President’s swearing-in ceremony,” the US State Department added.

Amid all the hustle and bustle  at the White House – and chaos behind the scenes – Donald Trump’s spokesperson Karoline Leavitt decided to give an interview to Fox News. Confirming the invite to Xi Jinping, Ms Leavitt said “This is an example of President Trump creating an open dialogue with leaders of countries that are not just allies but our adversaries and our competitors too.”

She also said that an invite for Donald Trump’s oath taking ceremony was sent to several other foreign leaders besides just Xi Jinping, but did not reveal who they were. It is not known yet if these “other invites” were sent on the same day as the one extended to Xi Jinping, or after Washington learnt about the Chinese President’s decision not to attend.

Meanwhile, on the other side of the planet, officials in Beijing have remained tight-lipped over the issue. President Xi though, had as recently Tuesday, warned Washington about the expected tariff, trade, and tech wars once Trump becomes President. Expecting economic trouble in the weeks and months ahead, President Xi held a crucial meeting with heads of 10 major international organisations, including the World Bank, the International Monetary Fund, and World Trade Organisation (WTO) in Beijing.

“There will be no winners,” he cautioned the United States in his speech at that meeting while he spoke about tariff hikes, tech-bans, and trade clampdowns that Donald Trump has vowed to impose on China during his election campaign.

With such war of words and aggressive posturing by both Trump and Xi, the former’s decision to invite the Chinese President for his inauguration ceremony does indeed seem both misplaced and rather unusual.

Donald Trump has blown hot and cold in his views about Xi Jinping – calling him “a great guy” on one occasion, and describing him as his nemesis on another. An invite sent, as one would, to an ally on the one hand, and calling China “the greatest threat” on the other.

Speaking about President Xi in his pre-election podcast with Joe Rogan, Trump had said, “He controls 1.4 billion people with an iron fist. I mean, he’s a brilliant guy, whether you like it or not.” But in two other interviews he called Xi Jinping the “biggest threat to the world” and labelled China as the “threat of the century”.

Donald Trump has also appointed Marco Rubio as his Secretary of State and Mike Walz as his National Security Adviser – both staunch critics of China who have kept a hawk’s eye on every move Beijing makes – so much so, that the Chinese government has placed sanctions on Marco Rubio, and in 2020 had banned him from ever entering the country again – something Beijing would need to reconsider when he takes office as Secretary of State.

Weeks before the Trump Administration takes over, NSA-designate Mike Waltz has already urged President-elect Trump to “urgently end the conflicts in Ukraine and the Middle East in order to counter the greater threat from the Chinese Communist Party”.

All eyes are now on what will be Trump’s next move after the invitation snub, and what will be Xi Jinping’s counter. The endgame is far from sight.
 

U.S. Secretary of State Antony Blinken speaks during a news conference on the sidelines of the Association of Southeast Asian Nations (ASEAN) Summit at the American Center in Vientiane, Laos, Friday, Oct. 11, 2024.
| Photo Credit: AP

U.S. Secretary of State Antony Blinken told Southeast Asian leaders on Friday ( October 10, 2024) that the U.S. is concerned about China’s “increasingly dangerous and unlawful” activities in the disputed South China Sea during an annual summit meeting, and pledged the U.S. will continue to uphold freedom of navigation in the vital sea trade route.

The 10-member Association of Southeast Asian Nations’ meeting with Mr. Blinken followed a series of violent confrontations at sea between China and ASEAN members Philippines and Vietnam, which have fuelled concerns that China’s increasingly assertive actions in the waterways could spiral into a full-scale conflict.

China, which claims almost the entire sea, has overlapping claims with ASEAN members Vietnam, the Philippines, Malaysia and Brunei, as well as Taiwan. About a third of global trade transits through the sea, which is also rich in fishing stocks, gas and oil.

Beijing has refused to recognize a 2016 international arbitration ruling by a U.N.-affiliated court in the Hague that invalidated its expansive claims, and has built up and militarized islands it controls.

“We are very concerned about China’s increasingly dangerous and unlawful activities in the South China Sea which have injured people, harm vessels from ASEAN nations and contradict commitments to peaceful resolutions of disputes,” said Mr. Blinken, who is filling in for President Joe Biden, in his opening speech at the U.S.-ASEAN summit. “The United States will continue to support freedom of navigation, and freedom of overflight in the Indo Pacific.”

The U.S. has no claims in the South China Sea, but has deployed navy ships and fighter jets to patrol the waters in a challenge to China’s claims.

Chinese and Philippine vessels have clashed repeatedly this year, and Vietnam said last week that Chinese forces assaulted its fishermen in the disputed sea. China has also sent patrol vessels to areas that Indonesia and Malaysia claim as exclusive economic zones.

The U.S. has warned repeatedly that it’s obligated to defend the Philippines — its oldest treaty ally in Asia — if Filipino forces, ships or aircraft come under armed attack, including in the South China Sea.

Philippine President Ferdinand Marcos Jr. complained to summit leaders on Thursday (October 10, 2024) that his country “continues to be subject to harassment and intimidation” by China. He said it was “regrettable that the overall situation in the South China Sea remains tense and unchanged” due to China’s actions, which he said violated international law. He has called for more urgency in ASEAN-China negotiations on a code of conduct to govern the South China Sea.

Singaporean leader Lawrence Wong earlier this week warned of “real risks of an accident spiraling into conflict” if the sea dispute isn’t addressed.

Malaysia, who takes over the rotating ASEAN chair next year, is expected to push to accelerate talks on the code of conduct. Officials have agreed to try and complete the code by 2026, but talks have been hampered by sticky issues including disagreements over whether the pact should be binding.

Chinese Premier Li Qiang was defiant during talks on Thursday (October 10, 2024). He called South China Sea a “shared home” but repeated China’s assertion that it was merely protecting its sovereign rights, officials said. Li also blamed meddling by “external forces” who sought to “introduce bloc confrontation and geopolitical conflicts into Asia.” Li didn’t name the foreign forces, but China has previously warned the U.S. not to meddle in the region’s territorial disputes.

In another firm message to China, Mr. Blinken said the U.S. believed “it is also important to maintain our shared commitment to protect stability across the Taiwan Strait”. China claims the self-ruled island of Taiwan as its own territory and bristles at other countries’ patrolling the body of water separating it from the island.

Mr. Blinken also attended an 18-nation East Asia Summit, along with the Chinese premier, Russian Foreign Minister Sergei Lavrov, and leaders from Japan, South Korea, India, Australia and New Zealand.

ASEAN has treaded carefully on the sea dispute with China, which is the bloc’s largest trading partner and its third largest investor. It hasn’t marred trade relations, with the two sides focusing on expanding a free trade area covering a market of 2 billion people.

Mr. Blinken said the annual ASEAN summit talks were a platform to address other shared challenges including the civil war in Myanmar, North Korea’s “destabilizing behavior” and Russia’s war aggression in Ukraine. He said the U.S. remained the top foreign investor in the region, and aims to strengthen its partnership with ASEAN.

Image used for representative purpose only.
| Photo Credit: AFP

China blasted Washington’s “bandit” mentality after the U.S. House passed a bill that would ban TikTok unless it splits from its Chinese owner, and vowed to “take all necessary measures” to protect the interests of its companies overseas.

The short-video app has soared in popularity worldwide but its ownership by Chinese technology giant ByteDance – and alleged subservience to Beijing’s ruling Communist Party – has fuelled concern in Western capitals.

Also Read | U.S. lawmakers see TikTok as China’s tool, even as it distances itself from Beijing

“The U.S. should truly respect the principles of a market economy and fair competition (and) stop unjustly suppressing foreign companies,” Beijing’s commerce ministry spokesperson He Yadong said at a press conference.

Washington should also “provide an open, fair, just, and non-discriminatory environment for foreign companies to invest and operate in the U.S.”, He added.

“China will take all necessary measures to resolutely safeguard its legitimate rights and interests,” he said.

Logic of a bandit

At a separate press briefing, foreign ministry spokesperson Wang Wenbin said the vote “runs contrary to the principles of fair competition and international economic and trade rules”.

“If so-called reasons of national security can be used to arbitrarily suppress excellent companies from other countries, then there is no fairness and justice at all,” Mr. Wang said.

“When someone sees a good thing another person has and tries to take it for themselves, this is entirely the logic of a bandit.”

Prior to the vote, Beijing had warned that the proposed ban would “inevitably come back to bite the United States”.

China has blocked western online platforms such as Facebook and X for years on its heavily-censored internet.

U.S. lawmakers voted 352 in favour of the proposed law and 65 against, striking a rare note of unity in politically divided Washington.

The White House has said President Joe Biden will sign the bill – known officially as the Protecting Americans from Foreign Adversary Controlled Applications Act – into law if it reaches his desk.

But it faces a tricky path through the more cautious Senate, where some are wary of taking dramatic measures against an app with 170 million US users.

TikTok has consistently denied that it is under the control of China’s Communist Party.

Its CEO Shou Zi Chew has urged users to speak out against the vote, and several TikTok creators interviewed by AFP voiced opposition to the proposed ban.

Long-running tensions

The app is at the centre of long-running tensions between China and the United States, which have butted heads in recent years over technology, trade and human rights issues.

Washington has cited national security concerns to limit the activities of some Chinese companies in the United States, as well as the export of certain technologies to China that it deems sensitive.

European regulators are also concerned about the app, with the European Commission on March 14 quizzing TikTok and other platforms such as Facebook, Google and X on what they were doing to counter the risk of AI to elections, including through deepfakes.

China has repeatedly lashed out at what it views as a concerted attempt to “suppress” China’s rise.

Foreign minister Wang Yi said this month that Washington’s “desire to heap blame under any pretext has reached an unbelievable level”.

“The methods used to suppress China are constantly being renewed, and the list of unilateral sanctions is constantly being extended,” Mr. Wang said at a press briefing during annual political meetings in Beijing.