Trump uncertainty of tariff threats on China
Donald Trump’s critiques of China during his campaign and subsequent election have heightened concerns that the first day of his potential second presidency could spark a renewed trade conflict between the globe’s two largest economies. Upon assuming office this week, President Trump postponed the imminent threat of tariffs and signaled a readiness to engage in discussions with China’s leader, thereby delaying what seemed to be an impending confrontation—while reiterating threats to address issues concerning trade, technology, and security with Beijing.
According to Wang Huiyao, president of the Center for China and Globalization, a Beijing-based think tank and adviser to the Chinese government, “this is a very positive start” from China’s perspective. Trump instructed federal agencies to assess the economic ties with China, opting for evaluation over the immediate imposition of tariffs he had previously threatened. The decision was made to grant TikTok an extension to devise a strategy for maintaining its operations in the United States, following a period during which the Chinese-owned application faced a temporary shutdown amid the looming prospect of a permanent ban.
Trump indicated a potential visit to China this year, following a conversation with Chinese leader Xi Jinping last week. Xi dispatched his vice president to attend Monday’s inauguration, a move interpreted as a gesture of goodwill following Trump’s invitation to the occasion. Trump reiterated accusations against Beijing regarding its conduct in trade and climate matters, urged for increased Chinese collaboration in resolving the Ukraine conflict and curbing fentanyl trafficking into the United States, and cautioned that he might implement a 10% tariff on imports from China beginning in February.
Beijing demonstrated a readiness to engage with the Trump administration, even as it maintained its critique of what it deemed American unilateralism. “In spite of the myriad differences and tensions, the two nations possess significant shared interests and opportunities for collaboration,” remarked a spokesperson for the Chinese Foreign Ministry on Tuesday, noting that China is prepared to engage with the U.S. to enhance relations from “a new starting point.”
China’s relationship with Trump has been marked by volatility, including a notable honeymoon phase during his initial term in office. “Trump had been sending mixed signals since the election campaign,” oscillating between aggressive rhetoric on tariffs and emphasizing his personal rapport with Xi, noted Ja Ian Chong, a political scientist at the National University of Singapore. “Should the initial term of Trump serve as a precedent, one can anticipate a degree of negotiation,” Chong remarked.
In a clear indication of his awareness of the strategic pressures exerted by the United States, Xi engaged in a video call with Russian President Vladimir Putin mere hours after Trump’s inauguration. During this conversation, he pledged to enhance cooperation with Moscow, a deliberate demonstration of solidarity amid the prevailing uncertainty surrounding the impending shifts in American foreign policy. Beijing has sought to capitalize on the returning U.S. president’s aversion to multilateral institutions. In the wake of Trump’s decision to extricate the United States from the World Health Organization and the Paris Climate Accords, China positioned itself as a proponent of international collaboration, reaffirming its commitment to both initiatives.
Protectionism yields no fruitful outcomes. At the World Economic Forum in Davos on Tuesday, Chinese Vice Premier Ding Xuexiang remarked that “trade war has no winners,” subtly omitting any direct reference to the United States. “It is imperative to not only expand the scope of economic globalization but also to enhance the equity of its distribution.” Zha Daojiong, a professor at Peking University’s School of International Studies, noted that both the U.S. and China express discontent regarding the trajectory of their relationship in recent years. “The Chinese side is poised to embrace opportunities for direct engagement between the two governments,” Zha remarked. Nonetheless, he remarked that “both sides are generally cautious in reapproaching one another.”
During his inauguration on Monday, Trump delivered remarks that took aim at China across various dimensions, including trade, climate change, and its global influence, while indicating a readiness to engage in negotiations with Beijing on these matters. “We will engage in discussions and communications with President Xi,” Trump informed the press. When inquired about a potential visit to China this year, he indicated that it is a possibility, having received an invitation.
Trump referenced China in his rationale for exiting the Paris agreement and the WHO, asserting that Beijing “pollutes with impunity” and has not sufficiently funded the United Nations health organization. He has further alleged that China is exerting control over the Panama Canal, asserting in his inaugural address that “we’re taking it back.” On Tuesday, Trump announced that he had engaged in discussions with Xi regarding potential actions Beijing could take to assist in resolving the conflict in Ukraine. He also indicated that his administration was contemplating the imposition of a 10% tariff on goods imported from China, effective February 1, as a countermeasure to the influx of fentanyl into the United States. The United States is exerting pressure on China to dismantle a supply chain facilitating the clandestine manufacture of fentanyl and various other narcotics.
Trump has alleged that China is exerting control over the Panama Canal. According to Wang, the president of a think tank, Beijing possesses pathways to negotiate a resolution on several of the concerns articulated by Trump. For instance, China might increase its purchases of American agricultural goods, direct investments to bolster U.S. manufacturing, intensify restrictions on the export of fentanyl precursor chemicals, and promote negotiations aimed at resolving the conflict in Ukraine, Wang noted.
Should Trump act on his threats, analysts suggest that China perceives itself as well-positioned to cushion the impact and potentially gain advantages. Carlos Casanova, a senior Asia economist at Union Bancaire Privée in Hong Kong, suggests that China might circumvent the 10% tariff by providing incentives like tax reductions to exporters. China’s deflationary environment may render its goods appealing to American consumers, even in the face of heightened tariffs. “A ten percent increase will be entirely feasible,” remarked Casanova.
Chinese foreign-policy analysts have advised that Beijing exercise caution regarding Trump’s initial overtures, highlighting the potential for the U.S. president to adopt a more confrontational approach. “We must remain vigilant,” asserted Jin Canrong, an international-relations professor at Renmin University in Beijing, in a video shared on his Weibo social-media account. “It appears that Trump continues to view China as a strategic competitor.”
Currently, Trump is engaging in a diplomatic charm offensive towards Beijing; however, he is simultaneously delegating the onus of dispute resolution onto China, according to Jin. “In the event that matters are not managed effectively, he may attribute responsibility to China.”
