As US election comes to a close, 1 thing is certain: more tariffs on China

Higher tariffs are a near-certainty with Donald Trump set to reenter the White House, but China is prepared for a new phase of struggle

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Kinling Loin BeijingandXinyi Wuin Hong Kong

Published: 11:59am, 6 Nov 2024Updated: 7:54pm, 6 Nov 2024

After this week’s US presidential election, Vietnam-based consultant Kyle Freeman doubts demand for his services has anywhere to go but up.

In the wake of former president Donald Trump’s victory on Tuesday, businesses are almost certain to continue exploring moves from China to destinations like Freeman’s current base of operations.

“Clients [were] holding off on new investment until the election [brought] a little bit more clarity on trade policy,” said Freeman, a partner at business advisory firm Dezan Shira & Associates. He moved from China to Ho Chi Minh City two years ago, as his American and European clients began to adopt a “China plus one” strategy of diversification in response to US-led tariffs and heightened geopolitical tensions.

That attitude appears prescient, as keeping China’s economic rise in check has become the rare issue in American politics to receive bipartisan support. Most view heavier taxes on imports as a means to protect US industrial capacity from what is commonly termed “unfair” foreign competition.

But with a new administration set to take office, the trade positions of the world’s two largest economies are expected to undergo major transformations as the countries’ ongoing dispute enters a new stage.

Complications from escalations

Trump referred to “tariff” as “the most beautiful word in the dictionary” as he campaigned for re-election as the Republican Party nominee, having lost the 2020 election to Democrat Joe Biden. Trump – who initiated the trade war in his first term – said he will escalate current tariffs to 60 per cent on all Chinese imports, and add a 10 or 20 per cent blanket tariff on all foreign goods entering the US.