Trump’s Victory Means Tough Challenges For Chinese Economy

Web Desk — According to Fitch Ratings the primary challenges for the Chinese corporates can be grouped into three themes: trade protectionism, weaker Chinese economic growth, and a rollback of US climate-related policies if Donald Trump wins a second presidential term.

Fitch expects a potential major policy shift if Trump wins the upcoming presidential election in November 2024. The technology hardware, new-energy manufacturing, and auto sectors will be at risk of moderate to high impacts if Kamala Harris loses against Trump. On the contrary, if Harris wins, the company anticipates the sustainability of Biden’s policies.

Conversely, Trump is strongly expected to implement protectionist measures against China, which will directly affect Chinese exporters. However, it would be difficult for the US to disassociate with China in the medium term given China’s entrenched industrial supply chains.

Business experts believe strong trade restraints could lead Chinese exporters to demand shock, forcing them to consume surplus goods in the local market, entailing high competition, price reduction, and industry consolidation.

According to Fitch, Chinese manufacturers would continue to seek new overseas markets to counter these barriers, but this needs ample investments.

The company strongly believes that the Chinese economy won’t be able to escape the impact if US imposes 60% tariffs on China goods imports and a 10% tariff on imports from the rest of the world.

Additionally, the rollback of US climate policies would dampen demand for electric vehicles and renewable energy-related products, affecting commodities including metals, mining, and energy resources.