Is there a path to keep away from US-China commerce conflict?

Investing.com — Donald Trump’s presidential victory raised fears that the U.S. was on a unavoidable path towards one other commerce conflict with China, however the president has avoided popping out swinging towards China, ING says, offering some hope that there could possibly be a path, albeit a slim one, for a commerce conflict to be prevented.

“Markets prevented what would’ve been a worst-case situation for threat property on Donald Trump’s inauguration. The President certainly held again from enacting a nationwide financial emergency and countrywide tariffs on China and the remainder of the world,” ING mentioned in a current report.

Trump’s restraint within the early days of his presidency has opened up room for negotiations and prevented a right away escalation of friction with China, ING added.

The financial institution highlighted a number of areas the place cooperation between the U.S. and China could possibly be doable, together with addressing the fentanyl disaster and resolving the TikTok problem. On fentanyl, ING mentioned this “is an space the place there must be room for cooperation,” noting that chemical exports to Mexico and Canada accounted for simply $2.8 billion in 2024, or lower than 0.1% of China’s complete exports.

The continued TikTok saga, in the meantime, may set the tone for U.S.-China ties, with the 75-day moratorium on TikTok’s ban establishing early April as a “probably necessary time window to observe if negotiations don’t proceed easily.”

ING cautioned, nevertheless, that whereas China seems able to ramp up imports and open up market entry, the trail to keep away from a extra harmful commerce conflict stays slim.

“Whereas China clearly would like to keep away from commerce conflicts, particularly given current financial sentiment, this decreased reliance on the US market and US suppliers does open up the chance for extra aggressive retaliation (comparable to export controls or extra focused tariffs on giant US multinationals) from China whether it is pushed right into a nook,” ING added.