The Trump administration’s tailored and targeted tariff strategy can block Beijing’s ambition to dominate high-tech industries.
The rush to do trade deals with the United States following Liberation Day demonstrates once again that President Donald Trump is the ultimate dealmaker. His personal relationships with world leaders have enabled him to reshape global trade dynamics and bring nations to the negotiating table to secure favorable terms for the United States.
His early successes underscore his ability to prioritize American interests through direct, bilateral engagement. As he continues negotiations, expect Trump’s trade frameworks to include even more foreign investments that bolster American manufacturing and global influence.
Reviving American manufacturing is a cornerstone of the America First economic vision, and the targeted use of tariffs has proved effective in protecting industries battered by Chinese overproduction. Sector-specific tariffs have forced global competitors to rethink their strategies and brought countries like Canada and Mexico to the table.
The same tariff-centric approach may not be useful for consumer electronics like smartphones and tablets, where manufacturers have shown a desire to build major chip fabs in the United States. Such tariffs might inadvertently hand a competitive edge to Chinese tech giants.
The potential national security consequences of such tariffs could be lasting. Chinese manufacturers, backed by the Communist Party’s subsidies, intellectual property theft, and other non-market practices, could absorb tariffs in the United States and international markets and offer lower-priced alternatives, gaining global market share at the expense of American and allied innovators and trusted brands. This dynamic would stifle innovation, as leading American companies would have reduced revenues for research & development and international expansion.
A weakened Western tech sector undermines America’s ability to lead in critical technologies like 5G and AI, which are vital for both economic and military dominance. During his first term, President Trump took decisive action against Chinese tech giants Huawei and ZTE, among others, effectively sidelining these companies in the United States. As a result, Chinese tech firms are not major players in the American smartphone market.
This situation would change rapidly if smartphone tariffs materialize and give Chinese tech companies like Lenovo and Xiaomi a significant pricing advantage in America. This would be the result of China subsidizing tariff costs for its national champion companies while Western firms pay the price themselves.
Tariffs on the broader consumer electronics industry might drive Americans to Chinese tech to save a buck. Given the ubiquity of consumer electronics—approximately 98 percent, 97 percent, and 81 percent of Americans own mobile phones, TVs, and computers, respectively—the impact of a significant move by consumers toward Chinese companies could be devastating to Western tech.
In addition to capturing market share, Chinese companies would gain user data and ecosystem loyalty. Every Chinese device sold strengthens Beijing’s digital infrastructure, from data collection to network effects. Unlike Western companies, which are governed by independent regulatory frameworks and the rule of law, Chinese firms are legally obligated to share data with the CCP and serve as extensions of state power. This isn’t just an economic loss; it’s a strategic one. Data harvested from Chinese devices fuel their AI advancements and surveillance capabilities, while ecosystem lock-in makes it harder for users to switch back to Western platforms.
Tariffs on consumer electronics also risk undermining America’s strategic partnerships with allies and partners like India, South Korea, Japan, and Vietnam at the very time their companies are making substantial investments in US manufacturing. These nations are linchpins in the global tech supply chain and critical partners in countering China’s growing influence. Japanese and Korean companies rely on U.S. market access to compete globally and fend off China, while India and Vietnam are emerging as manufacturing hubs for Western tech companies diversifying away from China.
Tariffs that raise costs for these partners’ products could affect the billions of dollars that they have pledged to President Trump at Mar-a-Lago and Oval Office interviews toward manufacturing in America. Moreover, any weakening of the collective resolve to challenge China’s technological ambitions is dangerous.
The tech race with China is the defining competition of our era, with national security hanging in the balance. Ensuring that advanced manufacturing, whether financed by American or allied companies, takes place in the United States is key. Thus, expect continued prioritization of manufacturing in the homeland, bilateral trade negotiations with key allies and partners that focus on reciprocal market access for American tech companies, joint research initiatives, coordinated approaches to combatting China, and removing barriers to investing in consumer electronic manufacturing in the United States.
This multi-faceted approach—coupled with a tariff strategy that targets Chinese-made consumer electronics and smartphones—will best meet America’s security and economic needs. This is the playbook the Trump administration used to beat back Huawei the first time around. There is little doubt that the current Trump administration is poised for even bigger wins today.
About the Author: Robert C. O’Brien
Robert C. O’Brien was the 27th United States National Security Advisor from 2019–2021. O’Brien is Chairman of American Global Strategies LLC.
Image: Dilok Klaisataporn / Shutterstock.com.
