Trade War Concerns Under Trump’s Presidency

Investing.com — Donald Trump’s presidential victory sparked fears of inevitable trade conflict with China. However, ING suggests that Trump’s cautious approach offers hope for avoiding a trade war.

Initial Market Reactions

Markets dodged a significant crisis during Trump’s inauguration, as he refrained from declaring a national economic emergency and imposing tariffs on China and other countries. This restraint, according to ING, opens channels for negotiation and prevents an immediate escalation of tensions.

Areas for Cooperation

ING highlights potential areas for U.S.-China cooperation:
– Fentanyl Crisis: There is opportunity for collaboration regarding chemical exports to Mexico and Canada, which represent a small fraction of China’s total exports.
– TikTok Negotiations: The ongoing situation with TikTok might shape U.S.-China relations. With a 75-day moratorium on a potential ban, early April could be critical for negotiations.

Caution Ahead

While China seems willing to increase imports and improve market access, ING warns that the scope to avoid trade conflict is limited. A shift in reliance may provoke aggressive retaliation from China, including export controls or tariffs on major U.S. companies if tensions rise.