BEIJING (Reuters) – Chinese officials and ordinary people are hopeful but nervous about Donald Trump’s return to the White House, eager to avoid a repeat of the trade war that drove a wedge between the economic superpowers during his first term.
Chinese Vice President Han Zheng, in meetings with Tesla Chief Executive Elon Musk and other members of the US business community in Washington before Trump’s inauguration, said he hoped US companies would “put down roots” in China and help stabilize bilateral relations, reported the official Xinhua news agency.
In Trump’s first term, he imposed tariffs on more than $300 billion in Chinese imports. In recent months, he has said he will add tariffs of at least 10% on top of those already imposed on Chinese goods, a move that would hurt China at a time when its economy is struggling to find a solid footing.
At the same time, the US president-elect took the apparently conciliatory step of inviting Chinese President Xi Jinping to attend his inauguration this Monday. Xi sent Han in his place, a goodwill gesture as China was represented only by its ambassador in the two previous US presidential inaugurations.
In their meeting on Sunday, Han told Musk, appointed by Trump to lead a department aimed at creating a more efficient US government, that he “welcomes Tesla and other US companies” to share the benefits of development of China and contribute to relations between China and the US.
The vice president’s meeting with US companies was chaired by FedEx CEO Rajesh Subramaniam, on the US side, and was attended by directors of eight companies from various sectors, including technology, banking and logistics, according to a North American executive present in the room, who added that the meeting went beyond the scheduled time and was very cordial.
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“(Han Zheng) is seen as someone who, because of his time in Shanghai, understands the concerns of the foreign business community and understands economics,” Michael Hart, president of the U.S. Chamber of Commerce in China, told Reuters in Beijing.
Xi and Trump were upbeat after speaking by phone on Friday, with Trump calling the conversation “very good” and Xi saying they both hoped for a positive start to US-China relations.
Mao Ning, spokesperson for China’s Foreign Ministry, referred to “a new starting point” in ties between China and the US at a regular press conference on Monday.
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But for all the cordiality between the two superpowers, a sense of déjà vu persists among those who remember how quickly ties deteriorated during Trump’s first term.
“From now on, until the situation becomes a little clearer, all of our U.S. customers will have to pay upfront,” said Dominic Desmarais, chief solutions officer at Lira Solutions, a Suzhou-based company that connects Chinese manufacturers with buyers. foreigners of everything from toys to furniture and titanium products.
“If Donald Trump really imposes 40%, or whatever, taxes on Chinese products coming into the United States, I don’t want to be stuck with products tailored for specific customers that just disappear,” he added.
“This happened a lot, seven, eight years ago, when Donald Trump imposed 25% tariffs on 85% of commodities leaving China.”
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Another trade war would leave China far more vulnerable than when Trump first raised tariffs in 2018, as the country faces a deep housing crisis, huge local government debt and 16% youth unemployment, among other challenges.
