- However, the degree of the tariffs will be limited by the US' need to maintain profitable trade with China, suggests Brownstone Institute head Jeffrey Tucker
- While China is likely to respond strongly to US trade measures and may turn to the Global South, 'none of those countries can absorb Chinese goods as rich developed economies can,' academic Andrea Ghiselli tells Anadolu
ISTANBUL
The incoming Donald Trump administration could open an opportunity for a trade detente between Washington and Beijing. However, the appointment of two well-known China hawks by the 47th president-elect may signal that tensions are far from over, experts told Anadolu.
Trump’s first term shocked Beijing with aggressive tariffs and bans on tech transfers, but this time, China appears prepared with strengthened domestic tech capabilities and broader export routes, experts noted.
“I don’t think there’s going to be a trade war,” Jeffrey Tucker, president of the US-based Brownstone Institute, told Anadolu. “There will be a heightened degree of tariffs for imports to the US from China.”
Known for his transactional “deal-making” style, Trump raised tariffs on Chinese imports during his first term, with the world’s second-largest economy scrambling to find common ground. Now, the bilateral trade between the US and China hovers at around $560 billion — largely in favor of Beijing, with Chinese goods flooding American markets.
Trump’s goal has been to drive domestic growth, boost exports, and create jobs. According to Tucker, Trump’s tariffs aim at two purposes: “One is to protect domestic industry from competition from abroad and the other is to earn revenue.” But, with a chuckle, he added, “They’re contradictory purposes. In order for tariffs to raise money for the government, the trade has to continue. So, that puts a limit on how high the tariffs will be.”
Tucker expects that Trump will seek to renew an agreement similar to the 2019 deal requiring China to buy US agricultural products. However, he noted, “The problem is that China doesn’t want the wheat, soy, and corn (from the US), and that’s going to be a sticking point.”
China poised for ‘possible trade war’
China has “long prepared” for potential trade tensions, said Hong Kong-based international strategist Andrew KP Leung. Beijing has “grown high-tech chip self-reliance, shifting towards services and consumption, expanding markets in the Global South,” Leung explained, adding that China’s worldview differs from the West’s.
The world is big enough for the US and China to both prosper “in different ways,” he said, adding that “differences do not need to translate into direct conflict, least of all a hot war.”
Yet Trump’s likely massive tariffs could “roil the world economy, China’s included,” Leung warned, suggesting that an end to the Ukraine war under Trump might free up commodity supplies, thus restoring some growth potential.
“Trump is transactional by nature. He believes in the ‘art of the deal’,” Leung added.
Beijing’s expectations: ‘No illusions’
In Beijing, Wang Zaibang, a senior fellow at the Taihe Institute, told Anadolu that Chinese officials hold no illusions about Trump’s approach. “The Chinese government has no illusions about Trump giving up the trade war in his second term,” Wang wrote in an email.
As the world’s largest manufacturing nation, Wang said China “has its own comparative advantages and won’t remain indifferent to Trump’s new trade war.” Rather than imposing proportional tariffs, Wang indicated Beijing would rely on “its own comparative advantages to retaliate,” with measures like import quotas and export licenses.
The US-initiated trade wars, Wang noted, accelerated China’s industrial restructuring and technological self-reliance. While higher tariffs disrupt global trade and finance systems developed post-World War II, Wang believes they could “facilitate the optimization of the global economic structure and accelerate the modernization, industrialization, and informatization of developing countries.”
‘Holding back’ unlikely for China
Andrea Ghiselli, head of research at the ChinaMed Project, said Beijing may feel there is no reason to hold back this time. “The Chinese leadership has likely assessed that the Americans will keep up the pressure, so holding back is pointless,” Ghiselli said.
China is therefore likely prepared to respond strongly to US trade measures while advancing its position in key industries and supply chains, said Ghiselli, who has lived in Shanghai. However, he noted, while China may turn to the Global South, “none of those countries can absorb Chinese goods as rich developed economies can.”
Potential end to Ukraine war
Even before he won the Nov. 5 election with 312 electoral votes, Trump predicted an end to the war in Ukraine before his inauguration on Jan. 20. If the war ends with Russia retaining Crimea and the Donbas region, “Russia will remain a serious threat to its European neighbors,” said Leung, the Hong Kong-based strategist.
“With Trump cooling on Europe, a more accommodative approach towards China can be expected, if only to hedge Europe’s bets,” Leung suggested.
However, Ghiselli of the ChinaMed Project was less certain, noting it’s difficult to gauge whether Trump’s return would stabilize Sino-European relations. “Indeed, the Europeans might prefer adopting Trump’s demands on China to spare European companies and exporters harsh tariffs to enter the American market,” Ghiselli observed.
Tucker, however, anticipates a major strain on the US-NATO relationship under Trump. “NATO will fall apart pretty, pretty soon,” he said, predicting Trump will shift toward engaging the BRICS nations to “develop a peaceful relationship with Russia, China, Brazil, and so on.” According to Tucker, Trump’s foreign policy will prioritize trade with BRICS while downplaying NATO.
“My expectation is that US-EU relationships will fall apart and the Trump administration will no longer defend NATO as a entity. It (Trump administration) cares a lot about the US dollar, but not so much about NATO allies,” Tucker said, suggesting that Trump's engagement with BRICS would seek to avoid the emergence of an alternate global currency.
Trade deals depend on Trump’s advisors
Ghiselli noted that any future deal with China would depend on Trump’s advisors. The “dynamics between the advisers surrounding Trump” will largely shape the outcome, he said in an email. Princeton University postdoctoral researcher Kyle Chan echoed this sentiment, expressing skepticism that a trade detente will materialize under Trump’s increasingly hawkish stance on China.
The announcement of Mike Waltz as national security advisor and Marco Rubio as Secretary of State will “only heighten the likely intensity of US actions against China,” Chan said, adding that he expects Beijing’s response to remain defensive.
China, he said, is likely to focus on limiting the fallout while strengthening ties with Asian and European nations rather than escalating further. “The US holds the cards, and China knows it,” Chan added.
