Investing.com – Donald Trump’s presidential victory raised concerns that the United States was on an inevitable path toward another trade war with China, but the president has refrained from coming out against China, ING says, offering some hope that there may be a path. , albeit narrow, to avoid a trade war.
“Markets have avoided what would have been a worst-case scenario for risk assets when Donald Trump was inaugurated. The president has already refrained from enacting a national economic emergency and imposing nationwide tariffs on China and the rest of the world,” ING said in a recent report. a report.
ING added that Trump’s restraint in the first days of his presidency opened the way for negotiations and avoided an immediate escalation of friction with China.
The bank highlighted several areas where cooperation between the United States and China could be possible, including addressing the fentanyl crisis and resolving the TikTok issue. Regarding fentanyl, ING said this is “an area where there should be room for cooperation,” noting that chemical exports to Mexico and Canada amounted to just $2.8 billion in 2024, or less than 0.1% of China’s total exports.
Meanwhile, the ongoing TikTok saga could set the tone for US-China relations, with a 75-day moratorium on TikTok bans starting in early April as a “potentially important window of time to monitor whether negotiations do not go smoothly.”
However, ING warned that while China appears ready to increase imports and open market access, the path to avoiding a more devastating trade war remains narrow.
“While China clearly prefers to avoid trade conflicts, especially in light of recent economic sentiment, this reduced reliance on the US market and US suppliers opens up the possibility of more aggressive retaliatory measures (such as export controls or more targeted tariffs on large US companies) Nationalities) “From China if it is pushed into a corner,” ING added.
