The gloves are off

Dominic Carman

Following President Trump’s victory, the US-China trade war looks set to escalate, affecting offshore firms in Hong Kong and across the rest of Asia

Trying to understand the machinations of China’s complex economy is notoriously difficult, even for economists. Official Chinese government data is opaque and irregular. So, when the country’s statistics agencies do publish data, commentators are invariably sceptical about its accuracy and reliability. For offshore law firms and their clients operating in Hong Kong and right across Asia, the future direction of the world’s second largest economy and trying to plan with some degree of certainty on the basis of reliable information are paramount concerns. However, the fate of the Chinese economy over the short and medium term remains distinctly uncertain. But one thing is certain: the potential of an intensified US-China trade war will increase with the White House return of Trump 2.0 – a man whose strongly held belief in tariffs is his most consistent and enduring policy position. Back in June 2018, Trump 1.0 announced 25% tariffs on $50bn worth of Chinese goods. Notably, President Biden maintained those tariffs throughout his term in office. If Trump 2.0 delivers on his election campaign promise to up the ante on tariffs against China when he sweeps back into the Oval Office, there will be one key question: by how much?