Chinese President Xi Jinping congratulated President-elect Donald Trump on his election win but cautioned that the U.S. would “gain from cooperation and lose from confrontation” with China.
This warning comes amid growing tensions as Trump has pledged to escalate the trade war from his first term, including imposing blanket tariffs on Chinese imports.
According to China’s foreign ministry, Xi highlighted the mutual benefits of cooperation and the risks of confrontation, emphasising the importance of a stable, healthy, and sustainable U.S.-China relationship for both nations’ common interests. The two leaders discussed the need for enhanced dialogue, managing differences, and expanding mutually beneficial cooperation to strengthen ties in the new era.
With the Republican Party gaining control of the Senate and holding a favourable position in the House, Trump now has the political backing to implement an aggressive sanctions regime, which could further strain relations. U.S.-China relations have already soured over trade disputes, China’s actions in the South China Sea, and its alleged espionage activities, including the surveillance balloon that flew across the U.S.
During his first presidency, Trump increased tariffs on over $300 billion of Chinese goods, and President Biden did not reverse these measures. Trump proposed even higher tariffs on the campaign trail, including a 10% tax on all U.S. imports and 60% on Chinese-made products. Should Trump’s tariffs rise to 60%, experts predict it could cut China’s exports to the U.S. by $200 billion and slow its GDP growth.
In anticipation of Trump’s victory, China’s exports surged by 12.7% in October, a 27-month high, as Chinese businesses rushed to ship products before potential new tariffs hit. However, China’s stock markets, including Hong Kong, declined as Trump’s victory became apparent.
As China faces economic challenges, including weak consumer spending and deflation, Beijing is expected to announce a stimulus package to support its faltering economy. The U.S. and Europe have recently imposed tariffs on Chinese-made electric vehicles, adding pressure to the trade outlook. In response to U.S. tariffs, China could impose duties on U.S. agricultural exports, implement export controls on critical minerals, and target American companies with interests in China.
