The contemporary global economy is at a crossroads. As Donald Trump continues his political gimmicks, one reality emerges: there is an “unintended collision,” as patent lawyer Alexander D.Georges brands it, between intellectual property (IP) rights and tariffs. In today’s global trade environment, particularly after the Trump administration’s tariff measures, safeguarding and managing IP has become more complex. Tariffs may have been designed to protect domestic industry, but they have also introduced new complexities for businesses in managing their IP assets. The resulting higher costs, fractured collaborations and elevated infringement risks suggest that Trump is undermining American intrinsic value and strategic economic dominance.
This situation underscores a fundamental reality: while IP rights and corporate branding have traditionally formed the bedrock of Western economic power, the actual production of the physical goods that generate this wealth occurs in countries marginalised in strategic policy discussions. From iPhones assembled in China and Mexico to Ford vehicles rolling off plants in South Africa and elsewhere, the tangible engine of modern commerce resides not solely in Western boardrooms but also on factory floors across the Global South. What was once seen as a strategic relocation, motivated by capital’s pursuit of cheaper labour and lower production costs, now demonstrates that economic power no longer resides solely in Western hands.
The growing dissonance between the ownership and production of global capital has come under intense scrutiny, particularly as geopolitical tensions reshape international commerce. China’s rise, driven by industrial pragmatism rather than ideological alignment with free-market orthodoxy, demands a critical reassessment: IP rights lose sanctity when propped up by outsourced labour and fragmented global supply chains. Amid escalating tariff wars, countries like Zimbabwe and South Africa are being marginalised—not for lack of capability, but because they remain structurally tethered to economic systems they neither designed nor control. This situation underscores how the established global order often disadvantages those who provide its material foundations.
This article explores how China’s industrial strategy simplifies the complexities of international commerce by prioritising material production over legal abstractions such as intellectual property rights. It highlights how China’s model—grounded in control over manufacturing, logistics and access to critical resources—demonstrates that IP can be treated not as an untouchable legal virtue but as a flexible instrument subordinate to productive capacity and national interest. The 2019 OECD/EUIPO estimates indicate that approximately 90% of seized counterfeit goods originate from China. To provide context, the total trade in counterfeit and illicit goods represents a significant portion of global commerce, amounting to about 3.3% of all global trade.
The Chinese model exposes how the West’s deep reliance on outsourcing key elements of production has eroded its industrial base and weakened the coherence of its economic narrative, which still clings to the primacy of intangible assets like branding and patents. This Western model marginalises the significance of labour and infrastructure in creating value, thus obscuring the fundamental material underpinnings of wealth. Ultimately, the article contends that the prevailing rules of global capitalism(designed to protect ownership divorced from production) are structurally flawed and increasingly ineffective in a world shifting toward multipolar industrial power. These contradictions reveal a system built on unstable premises, where legal fictions mask economic dependence and material inequality.
• The Myth of Ownership in a Displaced Supply Chain
The notion that a product is “American” because it was conceived in California while being physically produced in China, Mexicoor South Africa reveals a core contradiction in contemporary capitalism. IP-centric models, particularly dominant in Western economies, elevate the intangible (brands, software and patents) over the tangible (labour, machinery and logistics) that make the product real. Yet without the latter, the former has no value. For example, the iPhone is legally protected in the US under Apple’s vast IP regime, but its production relies almost entirely on Asian factories, such as Foxconn in China and Pegatron in Taiwan.
China understands that possession is not merely about legal registration but control over production. Chinese trade doctrinehas an implicit principle: “You own nothing until you produce it.”This implies that China flipped the script by anchoring the value chain to its shores, making it impossible for external economic subordination currently experienced by African countries and the rest of the Third World. When Western companies brought their blueprints to Chinese soil in the early 1990s, they assumed their rights would remain sovereign. However, Chinese economic practice prioritises the tangible. Production takes precedence and is followed by logistics, with brand loyalty or legal rights considered only afterwards, if at all. This approach is not piracy but pragmatism, which has formed the basis of its economic power and resilience.
• The Tariff Wars: A False Virtue Exposed
The tariff wars initiated by the Trump administration—and sustained in different forms under Joe Biden and now Trump’s second term—were never merely about restoring domestic jobs or asserting economic sovereignty. While wrapped in the language of national interest and industrial revival, these policies revealed a truth: that contemporary capitalism is fundamentally dependent on externalised labour, offshore manufacturing and globally fragmented supply chains. By levying punitive tariffs on imports from China, the US implicitly conceded a glaring vulnerabilitythat it lacks internal productive capacity in key sectors, including textiles, electronics and, increasingly, critical minerals.
Far from reasserting strength, these actions underscored a contradiction at the heart of the Western capitalist model. Claims of efficiency, meritocracy, and innovation, often touted as capitalism’s ‘virtue signalling’, appear increasingly insincere because the system’s success depended on inexpensive, outsourced labour, a deregulated flow of capital and shifting of socio-ecological burdens onto other parts of the world. The biggest fallacy of economic virtue signalling is the public display of competitiveness and moral leadership that conceals a fundamental reliance on production systems outside the state’s direct influence. Rather than serving as instruments for industrial revitalisation, tariffs functioned as a defensive strategy for an economic system that had outsourced its material base.
This scenario begs one pertinent question: what happens when those circuits are interrupted? The consequences are immediate and palpable: shortages of essential goods, surging inflation and widespread panic buying. The global economy, fine-tuned to JITdelivery and transnational supply chains, proves fragile when pressure is applied. The tariff wars, initiated during Trump’s first presidency and reshaped under Biden before intensifying again under Trump’s return to office, were never merely about restoring American jobs or asserting national economic sovereignty.
These tariffs exposed a key weakness in neoliberalism: the West’s core economies rely heavily on labour and production outsourced to other countries. It was unsurprising when Trump exempted smartphones, computers and other electronic devices from “reciprocal” tariffs, including the 125% levies imposed on Chinese imports. The United States, after all, has no factories to speak of, and resetting its economy would take a generation to reacquaint itself with the “dirty jobs” long relegated to Bangladesh, China, or Mexico. In short, the goal of ‘Making America Great Again’ is fallacious and unattainable. As the saying goes, “America may think it holds cards, but they are Made In China!”
• China’s Pragmatism and Fight for Genuine Economic Independence
Trump’s tariffs have peeled back the veneer of neoliberal orthodoxy, revealing an uncomfortable truth: the leading Western economies are structurally dependent on outsourced labour and offshore production. While the shift in global economics became clear, developing countries, still reliant on resource exports and foreign capital tied to Western legal safeguards (IP protection, contracts and dispute resolution), have struggled to grasp its significance. These long-standing pillars of economic credibility have done little to foster independent industrial growth or protect their economies from global instability.
The tariff wars should have served as a warning—an alarm bell indicating the breakdown of the traditional globalisation consensus and the emergence of a more fragmented and competitive global trade landscape. However, this signal continues to be misunderstood in much of the Global South. For example, days after the Trump tariffs kicked in, Zimbabwe suspended 0% levies on all US goods. While China prioritisesindustrial self-sufficiency and the US struggled to rebuild domestic production, many African economies are stuck in resource extraction, confusing legal assurances with true economic independence.
Alongside trade disruptions, efforts to regulate global financial flows, specifically those relating to tax avoidance and BEPS, are reaching a critical moment. The OECD’s two-pillar tax reform and growing scrutiny from African tax authorities mark a key shift in global transparency. BEPS exposes a core injustice: multinationals divert profits to tax havens, denying the Global South vital revenue from the value created within their borders.
Through carefully crafted IP ownership structures, multinational firms justify profit shifting via royalty payments and licensing fees funnelled to subsidiaries in low- or zero-tax jurisdictions—effectively draining revenue from the Global South where actual production or resource extraction occurs. While not immune to illicit flows, China actively retains profits within its financial ecosystem through capital controls, sovereign wealth strategies and state oversight of outbound flows, ensuring domestically generated wealth largely stays within its borders and bolsters its fiscal sovereignty against illicit financial flows.
Meanwhile, Third World countries suffer the full impact of BEPS: raw materials are exported with minimal local value addition, andprofits are booked in Luxembourg or the Netherlands. Ironically, as the West cracks down on the very financial games it perfected, developing countries—who were victims of these schemes—are left without the institutional strength to respond effectively. However, this situation presents a fresh opportunity: China’s unapologetic economic realism demonstrates that countries can design systems to prioritise national interest over blind compliance with global norms, which the likes of the US manipulate or change on a whim.
• Toward a New Political Economy of Production
The path ahead demands that developing countries internalise what China has long understood: in global commerce, the material trumps the metaphysical. Intellectual property must be subordinated to productive capacity. The law and its prohibitive doctrines must follow strategy, not the other way around. The time has come for the Third World to abandon the assumption that Western capitalism, rooted in IP dominance, finance-led growth and legal abstraction, is the only viable model. A multipolar world presents an opportunity where countries like South Africa must treat trade not merely as diplomacy but as industrial policy. They must revalue logistics, infrastructure, labour and mineral control not as passive resources to be auctioned but as levers of structural power.
• Conclusion: The Ace of Spades
The final card, or the ace of spades, no longer belongs to the United States or the IP-fortified West. It lies with those who manufacture, assemble and transport the world’s goods. Routinely dismissed in Western narratives, China’s model offers no ideological purity, but it does offer proof of concept. It does not see the global economy as a court of contracts or a pantheon of protected ideas. It sees it for what it is: a system of warehouses, docks, ports, cables and factories.
If African states fail to grasp this lesson, they will remain locked in the periphery, spectators in a game whose rules were never written with them in mind. The myth of green growth, the illusion of free-flowing capital and the sanctity of IP have all been exposed as pillars of a system designed to preserve core dominance and peripheral dependency. The future belongs to those who understand that in international commerce, production is power, and the ace of spades is a factory, not a patent.
Siya yi banga le economy!