Has Trump just fired the opening salvo in a new US-China trade war?

United States President-elect Donald Trump appeared to fire his first salvo on China on Nov 26, saying that he will impose an additional 10 per cent tariff on imported Chinese goods on his first day in office.

- Lim Min Zhang

It appears to be a political gambit to use tariffs as a bargaining chip, with Trump adding that the hike is related to China not doing enough to stem the flow of drugs - specifically fentanyl - to the US.

Mr Stephen Olson, a visiting fellow at the ISEAS - Yusof Ishak Institute in Singapore, said Trump prides himself on being unpredictable, so it is difficult to be certain of his strategy.

"But this is very likely an opening salvo," he noted, adding that Trump's goal through such tariff actions could be to cut some kind of trade deal that could also include Chinese commitments on other issues, such as drug control.

Observers, including Chinese scholars, had warned about the likelihood of Trump using tariffs in such a transactional way.

During Trump's first presidency between 2017 and 2021, such tit-for-tat moves were made on goods such as Chinese solar panels and steel, and American soya beans and aeroplanes.

In the meantime - especially with US President Joe Biden deciding not to lift these import taxes - Chinese sellers have been diversifying their export destinations, and 10 per cent could be a margin that they could still absorb.