Trump's tariffs have ironically strengthened the US's rivals

The US president's tariff blitz was aimed at boosting the country. Instead, it is driving Chinese innovation, fuelling India's competitiveness and drawing global investors to emerging markets. By Kara le Roux

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When US President Donald Trump rolled out tariffs earlier this year, he framed it as a matter of survival.

Foreign trade practices, the White House argued, had become a "national emergency" for the US. This was his weapon of choice to shore up America's economic position and protect workers.

But tariffs are slippery things, Sangeeth Sewnath, managing director of Americas at Ninety One, pointed out at the Morningstar Investment Conference in Cape Town recently. "The point of tariffs serves two purposes. It's either protection or it's leverage. At the moment, you will see that it's a lot more leverage than it is protection."

Grant Slade, international economist at Morningstar Investment Management, warned that these policies were unlikely to achieve their intended goals. Instead, he predicted a "stagflation-style" scenario in which slowing consumer demand and supply-side disruptions diverged, leaving the US economy facing weaker growth and higher prices in the coming quarters.

Sewnath doesn't think this approach is a surprise. After a year of living and working in the US, he has seen this mindset up close. "In the US, they would prefer strong and wrong over weak and right," he said. That instinct is supported by US exceptionalism, which, he stressed, is not a concept but rather "how they live and what they believe".

The irony of Trump's tariff blitz is how it has strengthened the US's rivals. In China, the trade war has reinforced the Communist Party's grip on power and nudged neighbours like Japan and South Korea into closer cooperation with Beijing, said Liang Du, chief executive at Prescient Private Fund Management in Shanghai.