BEIJING (Reuters) – Donald Trump unexpectedly delayed imposing tariffs on China on his first day back in the White House and did not point to it as a threat, raising the prospect of a rapprochement as both sides seek to gain a with each other rather than causing harm to an opponent.
In a speech after his inauguration, the US president avoided mentioning China, his former opponent in a previous trade war, even as he said tariffs would make the US “rich as hell”, leaving the door open for new negotiations with the US. second largest economy in the world.
Trump also delayed a ban on Chinese-owned short video app TikTok, but in an unprecedented move, suggested the US should own half of TikTok’s US business in exchange for keeping the app alive, saying that the company could be worth hundreds of billions of dollars.
As Trump enters his second term, Beijing and Washington need a new roadmap to advance their goals and protect their interests, analysts say, although previously unresolved issues such as the 2020 trade deal could undermine currently cordial tones.
During his first term, Trump quickly established a relationship with Chinese President Xi Jinping. The two threw each other lavish receptions in Florida and Beijing. But that hasn’t stopped ties from deteriorating into a trade war that has triggered a series of retaliatory tariffs and disrupted global supply chains.
However, neither side appears interested in picking up where they left off, with signs pointing towards the negotiating table.
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“Trump wants a deal. Otherwise, he would have attacked China on day one,” said Alicia Garcia Herrero, chief economist for the Asia-Pacific region at Natixis.
“He ran a very aggressive campaign towards China and, on the first day, he dodged it.”
“China wins because its tariffs will be limited. Because they will offer Trump everything he needs to make a deal. Financial services? The renminbi? Do you want a stronger renminbi? Of course, maybe on a temporary basis,” he added.
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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, weak domestic demand and 16% youth unemployment, among other challenges.
Chinese stocks were volatile on Tuesday as investors struggled to understand Trump’s plans for China.
Last week, Xi and Trump agreed, in a telephone call, to create a strategic communication channel on “important issues”.
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The 47th US president also said he could travel to China later this year.
