China to overcome Trump tariffs, seek improved ties with Japan in 2025

BEIJING (Kyodo) — China is expected to focus on a rematch of its tariff war with the United States in 2025 after President-elect Donald Trump returns to the White House in January, while seeking to improve relations with Japan. who could also face financial difficulties. higher import duties.

As its economy suffers from a slowdown amid a prolonged crisis in the real estate sector, the Asian power has drawn up a series of recovery measures since September. Some experts say he may not be as well positioned to handle trade conflicts with the United States as he was during Trump's first four-year term until 2021.

The new president, who advocates “America First” trade protectionism, pledged during the presidential election campaign to impose import duties of 60% or more on all Chinese products as part of his efforts to create jobs and protect industries in the United States.

In November, Trump also announced he would impose additional 10% tariffs on goods from China, citing his failure to keep his promise to institute the death penalty for those arrested for trafficking fentanyl, the leading cause of overdose death in the United States.

Trump did not explain how the policies of imposing additional tariffs of 60% and 10% are related.

Japan, despite being a US ally, may not be immune to higher tariffs, as Trump promised during his election campaign to levy duties customs duty of 10 to 20% on all global imports.

Takamoto Suzuki, head of economic research at the China unit of trading house Marubeni Corp., said he believed Trump intended to use the threat of additional 60% tariffs to achieve an agreement with Beijing in order to obtain what Washington wants, rather than going through cumbersome procedures to achieve the hike.

“If the United States maintains the additional 60 percent tariffs, it will exacerbate inflation at home and ultimately reduce demand in the global economy,” Suzuki said. During the campaign, Trump criticized outgoing President Joe Biden's administration for not doing enough to beat inflation.

On overall Sino-US relations, Suzuki predicted that rivalry between the world's two largest economies could further intensify in trade terms, but they would continue dialogue and try to avoid a head-on collision in the area of ​​trade. security.

“Trump would essentially seek to avoid a war (with China) so that there is space to make concessions,” he stressed. Although his cabinet is expected to include a number of China hawks, Trump himself seems less enthusiastic than Biden about defending Taiwan, which is what Beijing claims, Suzuki added.

Biden has publicly said the United States would defend the self-governing democratic island in the event of a Chinese attack, despite Washington's long-standing policy of strategic ambiguity over how it would deal with such an eventuality.

Facing pressure from Trump, Suzuki said, China will likely seek to secure its export destinations by strengthening ties with Japan, South Korea, Europe, Russia and the Association of Nations. Southeast Asia, as well as its member emerging and developing countries. of its Belt and Road global infrastructure initiative.

Fujio Kawashima, a professor at Kobe University School of Law, said he felt China's eagerness to promote cooperation with Japan after Trump's victory in the November 5 presidential election, thanks to remarks from Chinese participants at a recent symposium in Beijing.

At the event, he compared the two neighboring countries' approaches to dealing with Trump's trade policies during his first term.

Kawashima said he believed they could work together, possibly with Europe, to send a message to supporters of internationalism in the United States that “what Trump is going to do would destroy” the multilateral trading system represented by World Trade Organization.

The professor said that while Japan had refrained from filing complaints with the WTO over trade frictions with the United States during Trump's first term and sought to resolve disputes bilaterally, China has proactively used the Geneva-based body and took retaliatory measures in a deadly business environment. war with the United States.

“I think Japan should also have used the WTO to assert what it considers wrong (in US trade policy), while China should have refrained from making the situation worse by taking countermeasures. retaliation,” Kawashima said, referring to the 2017-2021 period.

“I recommend (Japan and China) to adopt an intermediate approach” this time, he added.

Trump prefers bilateral approaches and often snubs multilateral systems, including regional free trade agreements. His stance triggered “a significant level of hedging” from traditional U.S. allies, prompting them to expand their engagement with Beijing during the first term, said Scott Kennedy of the Center for Strategic and International Studies.

The senior adviser for Chinese business and economics at the U.S. think tank told a November conference in Beijing that it was possible that Japan and other members of the free trade agreement Trans-Pacific Agreement, from which Trump withdrew the United States in 2017, “seriously consider” China's request to join the framework.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership now has 12 members, with Britain officially joining in December. China and Taiwan separately filed applications to join the high-level trade deal in 2021, but they were abandoned as members decided to negotiate Costa Rica's 2022 entry offer.

Unanimous approval of all members is required to adhere to the trade agreement.

Japan and other TPP countries originally hoped for an eventual return of the United States to the framework, but they “may decide they cannot wait any longer” and consider requests from China and Taiwan simultaneously, Kennedy said. “I think from an economic point of view it would make perfect sense,” he added.

However, Kawashima said he thought this scenario was unlikely. While some other members, including Australia, may have softened their stance on China's candidacy, Japan, along with Canada, remains “the last line of defense” against its membership, a- he declared.

Japan, which is the largest economy among the 12 TPP members, and Australia have expressed concern over China's practice of “economic coercion”, such as trade restrictions, to achieve its goals.

But Canberra has seen its ties with Beijing improve recently with the lifting of Chinese trade sanctions on Australian exports such as wine and coal. Tokyo has yet to make a major decision in favor of Beijing's entry, as it could dash hopes of a U.S. return to the TPP, Kawashima said.

(By Maya Kaneko)