China coped with Trump’s first trade war. A second one will be tougher.
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Subscribe to enjoy similar stories. SINGAPORE—The last thing Xi Jinping needs right now is another showdown with Donald Trump over trade. China is grappling with an epic property collapse, and local governments are wobbling under trillions of dollars of debt.
Chinese leader Xi has responded by hitting the gas on manufacturing, pushing Chinese companies to pump out a surfeit of goods that are pouring into foreign markets and propping up the economy at home. Now, a fresh trade war could pull the rug from under what has become a critical source of growth. In a sign of how serious he is about raising tariffs to combat what he sees as unfair trade, President-elect Trump has told allies he wants Robert Lighthizer, who served as U.S.
trade representative during his first term and is especially critical of Chinese trade practices, to be his administration’s trade czar, The Wall Street Journal reported. If the U.S. cuts back on some of the $430 billion in goods it imports from China each year, Chinese companies could try sending them to other countries, a strategy Beijing followed successfully after Trump first hit Chinese goods with tariffs in 2018.
But other countries are already up in arms over an avalanche of cheap Chinese exports hurting their own companies. Rising tariffs and mushrooming antidumping probes in Europe, Asia and Latin America are sending a strong signal that China can’t rely on other countries to mop up its ballooning industrial output, never mind extra goods shut out of the U.S. by towering new levies on imports.
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