Marko Papic of BCA Research anticipates that President Trump will reach a trade agreement with China, countering widespread concerns about a potential "tariff frenzy."
Despite previous threats by Trump to impose tariffs as high as 60% on Chinese goods, Papic views these threats as a strategic move designed to encourage Chinese companies to move production to the United States, rather than an actual policy plan.
Papic's prediction comes amid reports that Trump intends to implement an additional 10% tariff on Chinese imports upon his return to office. These reports have led to speculation about a re-escalation of global trade tensions. However, Papic suggests that the perceived threat of a trade war with China is exaggerated.
Pointing to the current administration's stance on trade, which includes imposing 100% tariffs on certain electric vehicle imports and revoking licenses for companies such as Huawei, Papic argues that the trade war is not a future possibility but an ongoing reality. He believes that economic challenges in China increase the likelihood of a forthcoming trade deal between the U.S. and China.
Papic's statement emphasizes that President Trump's aggressive tariff rhetoric is consistent with his "America First" campaign promises and is aimed at influencing Chinese companies to relocate to the U.S. According to Papic, Trump's strategy is based on leveraging China's economic vulnerabilities to achieve a trade agreement that may include conditions favorable to the U.S.
In summary, Papic asserts that the fears of an imminent trade war with China are unfounded and that a trade deal is more probable than many expect. He suggests that Trump's tariff threats are part of a broader negotiation tactic rather than a definitive trade policy.
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