Chinese officials were prepared for Donald Trump to receive bad news upon his return to the US presidency: immediate 60% tariffs on exports, which could deal a serious blow to the world's second-largest economy.
Instead, they got an apparent reprieve this week. Trump ordered an investigation into the matter Trade between the United States and ChinaShe later repeated the threat to impose a 10 percent tariff on the deadly opioid fentanyl.
These moves pale in comparison Tariffs of 25 percent were announced On US allies Mexico and Canada, and the worst expectations of decision-makers in Beijing.
The new president also hinted to A Connect to a potential broader transaction Tariffs on ownership of TikTok, the Chinese-controlled short video platform that US security hawks want shut down.
Despite Trump's tendency to make erratic statements and quick changes of course, these early moves have revived hope in Beijing that negotiations may be possible to avoid a second trade war. The question now is what type of agreement would be acceptable to both sides.
“There is a possibility that the two sides can reach an agreement — you can sense there is cautious optimism,” said Zhao Minghao, a professor at the Institute of International Studies at Fudan University in Shanghai. “But we will need to see if there is a good match between what Trump and Beijing can offer each other.”
Trump's softer-than-expected opening gambit on China follows other positive signs in recent days. Chinese President Xi Jinping sent the most senior official ever to attend the US inauguration, Vice President Han Chengwho also met with American business leaders including Elon Musk, who is close to Trump.
Xi and Trump too He made a phone call The weekend before the inauguration, the first in four years, was described by the US president as “very good” and covered “trade, fentanyl, TikTok and many other topics.”
Trump had pledged during his election campaign to hit China with 60% tariffs. Threat of an additional 10 percent On the first day of his presidency to force Beijing to crack down on flows of fentanyl drugs.
Instead, on Monday, he issued a memorandum directing officials to investigate the US trade deficit and “recommend appropriate measures, such as imposing a global supplementary tariff or other policies, to address this deficit.”
He also asked the US Trade Representative to study Beijing's compliance with the “Phase One” agreement agreed upon during his first term as president, and to consider imposing additional tariffs “particularly with respect to industrial supply chains and fraud through third countries” — a move that would likely lead to Exacerbate the problem. Much far-reaching implications for China.
Economists believe that part of China's trade with the United States has been diverted through third countries to avoid tariffs since the first Trump administration's trade war. US officials are scheduled to present their findings on April 1.
Although Trump signed an order allowing TikTok to operate for 75 days — a shift from his first term, where he sought to ban it in the United States — he also said Beijing would need to let a US entity seize half the company or face tariffs. Up to 100 percent.
This was followed by linking tariffs to TikTok ownership Fictional notes on Monday by Musk, who complained that while he was allowed to operate in the US, his social media site X was blocked in China.
One of the people familiar with the matter in China said that Beijing may agree to ByteDance, the owner of TikTok, sell the platform as part of a broader deal covering a range of issues including trade. However, the person said that any such discussions were at an early stage.
Chinese officials, who have long opposed the forced sale of TikTok and would need to approve it, appear in recent days to be signaling a more hands-off approach.
“When it comes to actions such as operating and acquiring companies, we believe that they should be decided independently by companies in accordance with market principles,” the Foreign Ministry said on Tuesday, adding that “Chinese laws and regulations must be taken into account.”
Chinese leaders may “believe that an amicable resolution of the TikTok issue could lay the foundation for cooperation” on other issues, Gabriel Wildau, managing director at consultancy Teneo, wrote in an analysis note.
“These could include tariffs, export controls, and even — in the scenario dreamed up by Beijing — even U.S. policy toward Taiwan and the South China Sea,” Wildau said.
However, economists cautioned that it is too early to be confident that a trade conflict can be avoided. While Trump seemed more open to making deals, so was his administration Full of China hawksThey said.
“This is a more flat pattern at the moment,” said Fred Newman, chief Asia economist at HSBC. “It is somewhat encouraging that we have not seen an immediate rise and tariffs, and perhaps there is room for discussions beforehand. But I think it would be wrong to say that China is now completely off the hook.”
Aside from trade, Beijing could provide assistance to Trump on other issues, such as resolving the Ukraine war, said Wang Zhong, a foreign policy expert at Zhejiang University of International Studies.
But Wang cautioned against this Beijing was prepared if relations collapsed. Even if the United States started with small tariff increases, this would undermine investor confidence in China. “If tariffs are imposed, China will have to fight,” Wang said.
