Trade War with China Looms as US President Prepares for Second Term
Eurasia Group founder and president Ian Bremmer predicts a trade war between the US and China in 2023 as Donald Trump assumes the presidency for his second term. "It's like a boxing match waiting to happen," Bremmer told Yahoo Finance at the World Economic Forum in Davos, Switzerland.
Despite Trump's previous threats of tariffs, a Wall Street Journal report suggests he may outline his trade vision without imposing immediate tariffs. However, Bremmer believes the situation with China differs from other countries.
While Mexico, Canada, and Europe may engage in initial retaliation, China's economic challenges may prompt it to respond aggressively. China's economy grew by 5% last year, but it faces challenges in the property sector and relies heavily on exports.
"I expect we're heading towards a trade war with China this year," Bremmer said.
Another complicating factor is the fate of TikTok, which Chinese parent company ByteDance controls. Trump promised to extend a reprieve for the app, despite legal questions surrounding his authority. Bremmer notes that Trump's stance conflicts with legislation passed by Congress and upheld by the Supreme Court.
Bremmer also warns of a "G-Zero" order, an era where no dominant power or group of powers can drive the global agenda. He emphasizes the growing influence of billionaires and the erosion of accountability in governments and industries.
Bremmer compares the US situation, where Elon Musk interacts with business leaders and heads of state, to a "kleptocracy" if it were to occur in other countries.