Potential Impact of the Trump Administration on the US-China Bilateral Relationship

November 14, 2016

While campaigning for president, Mr. Trump emphasized his desire to change the dynamic of the U.S.-China relationship. For example, Mr. Trump drew headlines in May when he said, “We can’t continue to allow China to rape our country, and that’s what they’re doing. It’s the greatest theft in the history of the world, what China has done.” Notwithstanding bold statements made in the heat of a presidential campaign, Mr. Trump might pursue a more measured approach once in office.

In his “7 Point Plan To Rebuild the American Economy by Fighting for Free Trade,” Mr. Trump promised that he will: (1) label China a “currency manipulator”; (2) bring cases against China for violations of international trade agreements; and (3) raise tariffs on Chinese imports. As president, Mr. Trump will have the authority to effectuate these promises. He will also have the authority to take other actions that could significantly impact Chinese companies, such as blocking them from acquiring control over U.S. businesses in certain sectors.

Any of these actions could damage the U.S.-China relationship and also harm the U.S. economy. For example, China might retaliate with protectionist measures of its own. It therefore remains to be seen whether Mr. Trump will follow through on his campaign promises.

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