Trump and China: 2018 could get nasty

The United States vs. China was the 2017 trade battle that never materialized. But 2018 could be a different story.

Date: December 20, 2017
By: Jethro Mullen 

President Trump hammered China on the campaign trail, promising to get tough on trade. But his tune changed once in office, with fiery rhetoric giving way to a budding bromance with Chinese President Xi Jinping.

Trump didn’t follow through on his promise to label China a currency manipulator, and instead opened talks with Beijing on improving economic ties. He also put potentially inflammatory investigations on the back burner.

“Despite strong language a year ago, the U.S. administration has been remarkably restrained in its usage of measures to restrict imports from China,” said Louis Kuijs, the top Asia economist at advisory firm Oxford Economics.

But experts predict things are going to get nasty in 2018.

‘I expect a trade war’

Trump’s patience appears to be running out, especially with his idea to cut Xi some slack on trade in the hope China would pressure North Korea into backing down on its nuclear weapons program.

Trump and his trade lieutenants are expected in the coming months to announce results from some of their big investigations — on issues like steel and intellectual property theft — that could result in tariffs on Chinese goods.

“I expect a trade war to emerge in the first part of the year, and it could spiral into a serious conflict that threatens other elements of the relationship,” said Scott Kennedy, director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies.