A new tariff battle looms Perhaps the biggest consequence for China is President Trump’s threat to impose a flat 60% tariff on all Chinese exports to the United States if he remains true to his campaign promise. Dew.
Such tariffs would be a blow to China’s already unstable economy, which is plagued by high youth unemployment, a prolonged real estate recession and government debt. An analysis published by UBS earlier this year found that imposing 60% tariffs on Chinese imports could cut China’s projected economic growth by 2.5 percentage points, or about half. be.
During President Trump’s previous term, the United States imposed tariffs on more than $360 billion of Chinese goods. This brought China to the negotiating table, and in 2020 the two countries signed a trade deal in which China committed to improving intellectual property rights and purchasing an additional $200 billion in U.S. goods. A few years later, the research group found that China had purchased virtually none of the goods it had promised.
President Joe Biden has kept most of those tariffs in place, adding new duties this year on imports including steel, solar cells and electric vehicles. Henry Gao, a law professor at the Singapore Management University who specializes in international trade, said tariffs could be used as a means to bring Beijing back to the negotiating table, as before. “Given China’s weak economic position this time, the desire for dialogue will be even stronger,” he said. “Therefore, tariffs may have a short-term impact on the Chinese economy, but the situation could improve if an agreement is reached.”
A factor in the trade negotiations may be that President Trump will ask Chinese President Xi Jinping to cooperate in negotiating a resolution to the war in Ukraine, but President Trump has boasted that it will be resolved soon, without specifying how. are.
President Trump previously asked Xi for help in dealing with North Korea’s rogue leader Kim Jong Un. Wang Huiyao, founder of the Beijing-based think tank Center on China and Globalization, said the dynamic will be repeated as President Trump weighs trade grievances against China’s requests for aid in the global crisis. There is a possibility.
“China is the largest trading partner for both Russia and Ukraine,” Wang wrote in a recent commentary. “These close economic ties give China a unique opportunity to play a greater role in peace efforts.”
Willingness to go “crazy” over Taiwan One scenario involves President Trump threatening to impose even higher tariffs (150% to 200%) on Chinese goods. That would be the case if China invaded Taiwan, an autonomous democratic state that Beijing claims as its own.
Although the United States does not recognize Taiwan as a country, it is Taiwan’s strongest backer and largest arms supplier.
In December 2016, President Trump infuriated the Chinese government by accepting a congratulatory phone call from Taiwan’s then president, Tsai Ing-wen, in violation of diplomatic protocol. Since the United States and China established diplomatic relations in 1979, no U.S. president has spoken directly with a Taiwanese leader.
President Trump’s move caused anxiety in China watchdog circles, but ultimately he remained adamant in supporting the status quo in Taipei-China relations.
Zu Feng, dean of Nanjing University’s School of International Relations, said China expects him to continue to do so.
“Would[he]want to switch to supporting Taiwanese independence? That’s unlikely,” he said.
Regarding China’s repeated threats to annex Taiwan, President Trump told the Wall Street Journal last month that President Xi “respects me and knows that I’m (expletive) crazy.” , said there was no need to use military force to stop the blockade of Taiwan.
On the campaign trail, Trump has occasionally spoken about his personal relationship with Xi, which began flourishing during his first term but soured over disputes over trade and the origins of the coronavirus pandemic.
But President Trump also likened the relationship with Taiwan to insurance, saying Taiwan should pay the United States to defend itself against China. Taiwan spends about 2.5% of its gross domestic product (GDP) on defense and has purchased hundreds of millions of dollars worth of American weapons this year.
According to Chinese state media, in a congratulatory message to President Trump after his victory, President Xi called on the United States and China to manage their differences and work together in a new era. President Xi said that history has proven that both sides gain when they cooperate and lose when they confront each other.
Da Wei, director of the Center for International Security Strategy at Tsinghua University in Beijing, said President Trump is deliberately maintaining uncertainty in relations with China.
“We clearly recognize the challenges,” he said. “In terms of opportunity, it’s still not very clear.”
Conflict over chips During his first term, President Trump began targeting Chinese technology companies over security concerns, focusing on large companies such as telecommunications giant Huawei. Mr. Biden continued in that direction by restricting China’s access to advanced semiconductors needed to develop strategic industries such as artificial intelligence.
But President Trump has criticized Biden’s Chips and Science Act, a bipartisan bill that would allocate $53 billion to boost domestic semiconductor manufacturing. Currently, Taiwan produces nearly 90% of the world’s supply of advanced chips.
TSMC, the island’s largest semiconductor maker, expanded production in Arizona in part to respond to the CHIPS Act and prepare to withstand other U.S. protectionist policies, the Wilson Center said. said Shihoko Goto, Indo-Pacific Program Director. .
President Trump has promised to repeal the chip law, but critics say it would undermine his campaign to reindustrialize the United States. President-elect Trump has also accused Taiwan of “stealing” the chip industry from the United States decades ago.
“Rather than providing a silicon shield, Taiwan’s dominance in the chip industry could actually be a source of tension between Taipei and Trump, as Taiwan’s success in the chip sector could be a sign of the U.S. occupation. “This is an advantage because it may be considered possible only as a result of this,” Goto said.
