China readying itself for Trump 2.0 as higher tariffs loom

It has beefed up retaliation toolkit, boosted tech self-sufficiency

- Lim Min Zhang

BEIJING - China has braced itself for a second Donald Trump presidency, as the specter of a fiercer trade war looms between the two superpowers.

President-elect Trump presided over a nosedive in bilateral ties during his first term from 2017 to 2021, starting a trade war that resulted in tariffs on some US$550 billion (S$728 billion) of Chinese goods and US$185 billion of US goods.

Even though President Joe Biden has kept the Trump-era duties - even increasing them in some cases, such as on steel and electric vehicles - he has also sought to stabilize ties between the strategic competitors.

But Trump has threatened to up the ante, saying on the 2024 campaign trail that he wants to impose 60 per cent tariffs on Chinese goods, which analysts see as likely to materialize in some form.

In the meantime, China has made no secret of its ambition to be self-sufficient. Months after Trump first slapped tariffs on China, President Xi Jinping said in November 2018 that with trade protectionism on the rise, the country has been "forced to travel the road of self-reliance" - a goal that has been reaffirmed in national plans such as the 14th Five-Year Plan for 2021 to 2025.

Beijing appears to be more ready this time. In recent years, it has beefed up its retaliation toolkit, such as passing an anti-foreign sanctions law and tightening export controls on critical minerals, while ramping up its technology self-sufficiency drive.

Writing for Foreign Policy magazine in late October, US-China expert Scott Kennedy said that should China interpret US actions in Trump's second term as starting an outright economic war, Beijing could well put up a "disproportionate response".