US-China Trade War Looms as Trump Reassumes Presidency
Eurasia Group founder and president Ian Bremmer predicts a looming trade war between the US and China this year as Donald Trump embarks on his second term.
"There's a fight that's coming," Bremmer told Yahoo Finance at the World Economic Forum in Davos, Switzerland. "Everyone around Trump, with the exception of Elon Musk, is urging him to decouple the US economy from China's."
Trump's initial pledge to impose 10% tariffs on China on his first day has been modified, according to a Wall Street Journal report. The updated plan outlines Trump's trade vision without initiating new tariffs immediately.
However, Bremmer believes that the situation with China differs from other countries like Mexico, Canada, and Europe. While those nations may engage in early skirmishes, they are likely to reach deals. In contrast, China's current economic challenges make it unlikely to capitulate to Trump's demands, leading to potential retaliation.
"We're heading towards a trade war with China this year," Bremmer asserted.
Further complicating US-China relations is the fate of TikTok, a Chinese-owned app banned in the US on Sunday. Despite the Supreme Court's upholding of a congressional law, Trump has promised to extend TikTok's reprieve.
"What Trump wants to do with TikTok contradicts legislation passed by Congress and upheld by the Supreme Court," Bremmer said. "It's unclear what he intends to do."
Bremmer also expressed concern over the world entering a "G-Zero" order, where no power or group of powers can effectively drive global policy or maintain international order. He sees a "law of the jungle" emerging, where powerful billionaires wield undue influence.