The media, citing insiders, published information according to which US President-elect Donald Trump will not unveil tariffs on goods imported from China on his first day in office.
The interlocutors of the journalists said that the incoming administration of Mr. Trump begins its international activities in the segment of relations with Beijing in the context of a concept that provides for potential cooperation, rather than taking measures that form conditions and circumstances that are sufficient for a new trade war between the United States and the Asian country.
One media insider noted that it was decided not to launch an immediate strike against China. In this case, it implies a strike in the form of an increase in tariffs on goods shipped from an Asian country. The mentioned informant of journalists noted that Donald Trump is currently focused not on a lightning-fast tightening of Washington’s tariff policy, but on the negotiation process with Beijing to cut another deal with the head of the People’s Republic of China Xi Jinping.
According to information published by the media, Mr. Trump will call on federal agencies to study the tariff policies and trade relations of the United States with China, Mexico, and Canada. This was stated by incoming officials for the Donald Trump White House during a conversation with journalists.
It is worth noting that the media has already reported that an increase in tariffs on goods imported from China will not be a decision that will take effect immediately after the inauguration of Donald Trump on Monday, January 20. At the same time, the interlocutors of the journalists noted that it may be possible to set the stage for trade duties in the coming weeks or months.
Donald Trump has already stated that he can sign up to 100 executive actions on Monday. His officials said that the relevant orders would also include measures to curb inflation and cut regulations, especially those related to oil and gas production.
During his first presidential term, which lasted from 2017 to 2021, Donald Trump negotiated a phase one trade deal with Beijing that ended years of tit-for-tat tariffs. At the same time, China has fulfilled only some of its promises on purchasing US goods.
Against the background of information that Donald Trump will refrain from immediately imposing high tariffs on imported products, the dollar showed a downward dynamic. The US currency fell by about 1.2%. In this case, the biggest daily decrease in the mentioned indicator has been observed since November.
According to media reports, there is a popular opinion among investors that a potential trade war caused by Washington’s tightening tariff policy may become the fact of an economic reality that has a beneficial effect on the dollar. The corresponding assumption is based on the preliminary assertion that the mentioned process will cause less damage to the economy of the United States than to the economies of other countries. In a certain sense, this opinion can be rephrased as a thesis that it will get worse for everyone, but one of the sides of the trade war will face fewer negative consequences. It is worth noting that many economists have warned that a potential increase in tariffs on imported goods could trigger an acceleration in inflation in the United States. For China, the likely tightening of US trade policy will be a painful factor. The corresponding assumption is because currently, exports are actually the main driving force of the upward dynamic of the Asian country’s economy.
Many investors said that a possible trade war would limit the United States demand for foreign goods and boost the dollar’s status as a safe haven currency. US equity futures climbed.
Journalists’s interlocutors who are aware of Donald Trump’s plans, which are not yet public, noted that he often quickly changes his mind on strategy and may decide again to implement his initial intentions towards China. At the same time, there is a high probability that Mr. Trump will take a more deliberate approach to relations with the Asian country and will not immediately begin to materialize the plans that he repeatedly stated during the election campaign last year.
It is worth noting that the potential tightening of tariffs may affect not only the adversaries but also the allies of the United States.
During his first term as president, Donald Trump imposed duties on imported goods worth about $380 billion. During last year’s election campaign, he promised much wider measures of the appropriate category. In this case, it implies a 10% to 20% charge on most of the products shipped from abroad. At the same time, for Chinese goods, the mentioned indicator is 60%.
After winning the November United States presidential election, Donald Trump announced his intention to impose 25% tariffs on products from Canada and Mexico. Also at that time, he vowed an additional 10% duty on goods shipped from China. Commenting on the relevant plans, Donald Trump said that the mentioned countries should stop the flow of undocumented migrants and illegal drugs to the United States.
It is worth noting that there is currently no clear answer to the question of whether Washington’s tightening tariff policy can become a factor in closing the trade deficit, bringing back manufacturing, or ending any crisis. Many economists are skeptical that the mentioned measures will help achieve the specified goals. According to some experts, in the short term, the increase in tariffs will likely become a factor in the dollar’s appreciation, raise the cost of imports, and increase government revenues.
