Changes in the US-China trade portfolio between 2017 and 2024 highlight the shifting of some US supply chains away from China.
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Trump has outlined his vision for US-China investment decoupling in a recent policy memo.
Recent developments suggest that engagement is not a current priority for either side, reducing the chance of a Xi-Trump summit in the next few weeks.
Beijing has fought back against Trump’s tariffs with a package including partial tariffs, export controls, and company-level probes.
Trump has fired the opening shot at China through the imposition of a 10-ppt across-the-board tariff hike on imports from China.
The first day of the second Trump administration began with many executive actions, including an extension for TikTok, but no tariffs.
The second Trump administration is likely to deploy tools beyond Section 301 tariffs to expedite its trade war 2.0.
China responded to the latest US measures with its own mineral export controls and opened an antitrust case against Nvidia.
Trump has already signaled the beginning of a second US-China trade war by announcing his intent to impose a 10-ppt tariff hike on all imports from China.
Fewer exports to the US and a cheaper valuation may provide a bigger buffer for the RMB than it had in 2018, but the scale of Trump’s tariffs is key.