The return of President-elect Donald Trump to the White House could present China with a unique opportunity for strategic advantage, despite the immediate economic challenges it may face, according to a leading China expert, Elizabeth Economy.
Economy, a senior fellow at the Hoover Institution, told Bloomberg TV that while Trump’s proposed 60% tariffs would undoubtedly impact China’s economy significantly, the longer-term consequences could benefit Beijing’s global ambitions.
“China is probably looking at the return of Donald Trump as short-term pain, but potentially long-term strategic gain,” Economy stated. She estimated that China would need to find new markets for approximately $200 billion in exports if Trump’s tariff plans come to fruition. These trade restrictions would hit China particularly hard, given its current economic struggles, Economy noted.
However, she suggested that Trump’s potential impact on America’s global leadership role could ultimately benefit China’s strategic interests. Economy highlighted that Trump’s presidency could weaken the United States’ traditional position as a major security guarantor, free trade advocate, and democracy supporter on the world stage – areas where China seeks to expand its influence.
“It opens up an opportunity for [Chinese President] Xi Jinping to fill the gap to step into the bridge,” Economy explained.
Trump’s return has already prompted reactions from China, as seen in recent moves by Chinese leadership. China is actively engaging U.S. allies in Europe and Asia to mitigate the impact of Trump’s proposed tariffs. This strategy involves offering tariff cuts and visa exemptions to these allies.
Furthermore, the U.S. has taken steps to curb China’s technological advancements. A report reveals that the U.S. has asked Taiwan Semiconductor Manufacturing Co. (TSM) to halt shipments of advanced chips to China, further complicating China’s economic landscape.
Companies like Steve Madden Ltd. (SHOO) are already adjusting their strategies to avoid potential tariffs by reducing manufacturing in China and shifting production to other countries.
The potential ramifications of Trump’s return on the global stage are complex and multifaceted. While China may see it as an opportunity, the economic and geopolitical landscape will undoubtedly be impacted, leading to a new era of complex strategic maneuvering.
