Trump Considers Avoiding Tariffs on China Amid Trade Buzz

Amid tariff buzz around China, US President Donald Trump has said that he is mulling to avoid the imposition of tariffs on China. “ We have one very big power over China, and that’s tariffs, and they don’t want them. And I’d rather not have to use it. But it’s a tremendous power over China,” Trump said, Bloomberg quoted.

Since his campaign days leading to US Election, Trump has frequently used tariffs as a tool, threatening to use them against both allies and adversaries, with the additional revenue intended to support his domestic policies.  He notably threatened in his early days as President to impose 10% tariffs on China, citing concerns over fentanyl being smuggled into the US. His recent threats have also been softer compared to those made last year, when he had suggested tariffs on China could reach up to 60%. Economists warned that such a move could devastate U.S.-China trade, especially given China’s economy is highly relied on export.

Trump Softens Stance on China 

Trump’s comments came as the yuan gained 0.6% in both onshore and offshore markets, and Chinese stocks continued to rise, with the CSI 300 Index rose by 0.8%. Since taking office, Trump has also shown a more nuanced approach toward China, offering TikTok a reprieve from an immediate US ban and belittling national security worries surrounding the app. 
Additionally, he has threatened China with tariffs that would be lower than those imposed on Canada and Mexico. Recently he also signalled his positive stance by hosting Vice President Han Zheng at his inauguration, marking the first time a senior Chinese official attended a US President’s swearing-in ceremony.

(With Inputs from Bloomberg)