The News
A high-profile supply chain exhibition that kicked off in Beijing on Tuesday put into sharp relief the challenges US President-elect Donald Trump’s second term could present to global trade.
Just before the China International Supply Chain Expo got underway, the president-elect pledged to increase tariffs on all Chinese imports to the US, as well as goods from Canada and Mexico — underscoring the tensions over economic decoupling that “are set to be at the forefront of discussions,” the South China Morning Post wrote.
SIGNALS
Global supply chains have ‘elongated,’ but China role still prominent
Some Chinese exporters with lots of business in the US are already looking to new markets, predicting that any coming tariff hikes would hurt their profit margins, The Associated Press reported. But in many cases, China will remain influential in global trade with the US, although supply chains could become more “elongated,” one China economist told the South China Morning Post. Third-party countries will play “a more prominent role in sourcing Chinese inputs, processing locally and exporting final goods to the US,” he said. “The content of ‘made in China’ may diminish, but that of ‘made by China’ … will remain unshakeable.”
Chinese state media heralds expo as ‘opening-up’ move
Even as Beijing pursues a more nationalist economic agenda and foreign investment in the country shrinks, state media outlets heralded the supply chain expo as a sign that China is further expanding its international influence. Without explicitly mentioning the US, state media outlet China Daily wrote in an editorial: “At a time when the unilateralism and protectionism of some major economies are negatively impacting the international supply chain… the event is expected to play a prominent role in boosting the openness and inclusiveness of the global economy.” People’s Daily, meanwhile, focused on the attendance of Apple CEO Tim Cook at the summit, and his praise for Chinese suppliers.