Trump’s escalating trade war with China, a trade war he predicted he would win long before his election, is likely to spark a trade confrontation with Beijing that could ultimately trigger a trade conflict.
“I think it is likely that we will see a trade dispute between China and the United States,” said Dan Kowalski, a senior fellow at the Center for Strategic and International Studies think tank in Washington.
“There’s a possibility that it could lead to a trade-related crisis.”
That possibility is particularly real given that Trump has called for “border adjustment” measures to help ease the burden on China and other countries, including tariffs on goods from countries such as Mexico, which he has said he would impose if they retaliate in kind.
Trump has also suggested that the United Nations Security Council would consider imposing punitive measures against China, although he has so far refused to do so.
“We’ve been talking about the possibility of some kind of trade war in the future, which is quite possible,” Kowalksi said.
“So it’s certainly something that would be a cause for concern.”
Trump’s recent rhetoric about China has stoked concern among U.S. businesses and international partners about the potential impact of a trade showdown.
He has made trade wars a cornerstone of his presidency and has proposed creating a new U.N. office to negotiate and enforce international trade rules, which would likely entail imposing tariffs on Chinese goods.
“In my view, he’s already made a big trade war of his administration,” said Adam Levick, a vice president at the nonpartisan Peterson Institute for International Economics.
“And I think he’s going to continue to escalate that trade war, and he will probably escalate it to a level where he might actually be able to push for an international trade war.”
Trump also has called China a “currency manipulator” and “currency war criminal,” and has threatened to impose punitive measures on the country.
“You’re going to see some big things happen, including potentially trade war,” Trump said last month.
“But I think we’re going see a lot of the things that I have said, and the things he has done.”
While there is no consensus about what kinds of trade wars Trump might pursue, Kowaldski said he thinks Trump’s strategy would be to target Chinese goods in a bid to force Beijing to accept tougher terms on trade.
“It would be very hard for China to agree to anything that would make their exports more competitive,” he said.
But China has been reluctant to make concessions, particularly in areas such as intellectual property protection.
“A lot of that is because they have a sense of their business model, and that they have seen that their market share has been declining,” Kovacs said.
In addition, China has traditionally been a buyer of U.T.O. products, with China making up more than half of all imports into the U.K. and the U of T.O.’s exports to the United Kingdom totaled $2.4 billion in 2014.
Trump could have a harder time pushing China to accept concessions if he does not succeed in getting China to change its policies, he said, because China’s leaders are unlikely to be swayed by his demands.
“They are not going to agree,” Kovealski said.
Trump’s rhetoric has been a boon for U.C. Berkeley economist Richard Freeman, who said the president has given China a chance to respond to the criticisms of China’s currency manipulation and to demonstrate that he is not going out of his way to harm its economy.
“He’s shown a willingness to do things that the Chinese would normally avoid, so there is a potential for China not to react and take a step back,” Freeman said.
The administration is also facing a backlash from U.A.E. officials who say Trump has failed to protect U.U.S.-China relations.
In his first months in office, Trump has criticized U.B.E.’s handling of the North American Free Trade Agreement, saying it was unfair to the U, which has a lower tax rate than the U., and he has suggested that China is trying to take advantage of U,U.B.’s relationship with China by offering preferential trade deals.
He also threatened to pull out of the Paris climate accord, saying he would be the last American president to sign it, though his administration has since softened its stance.
The Trump administration is hoping that the North Atlantic Treaty Organization (NATO) will be strengthened, which Trump said he was going to do.
But the alliance has also come under fire for its human rights record, including from human rights groups, and Trump has been critical of NATO, which in turn has been criticized for not taking enough action against Russian President Vladimir Putin’s aggression in eastern Ukraine.