The 2024 US Election: Diverging Paths for US-China Relations and Global Business Impact

The 2024 US presidential election could reshape US-China relations, impacting global trade, tech competition, and geopolitical balance. While both Donald Trump and Kamala Harris take tough stances on China, their distinct approaches to trade, tech policy, and diplomacy could lead to drastically different outcomes for US-China relations, with significant implications for businesses connected to China.

China’s ideal is stability—a “managed” relationship that avoids open conflict. By contrast, the US aims to reduce economic reliance on China and address perceived security threats. Here, we break down the key differences between Trump and Harris’s China policies and how each candidate’s approach could affect trade, technology, and business in the years ahead.

Trade and Economic Policy

Trump’s Approach: Trump’s proposed universal baseline tariff would hit Chinese exports hard:

• Consumer Electronics: A blanket tariff could increase costs for US companies like Apple, which relies on Chinese production, potentially raising prices and disrupting supply chains.
• Auto Industry: Import tariffs would impact auto companies like General Motors that rely on Chinese parts, raising costs and challenging competitiveness abroad.

Trump’s proposal to remove China’s most-favored nation (MFN) status could also lead to discriminatory tariffs, spurring China to retaliate, impacting sectors like agriculture and aircraft.

Harris’s Approach: Harris would likely continue Biden’s targeted tariffs on strategic industries such as semiconductors and renewable energy:

• Semiconductors: Tariffs aimed at bolstering domestic production would benefit US companies like Intel, encouraging local investment.
• EV Industry: Higher tariffs on Chinese EV components align with Biden’s “Investing in America” agenda, supporting domestic players like Tesla.

Technology and National Security

Trump’s Approach: Trump might revive the China Initiative and impose stricter controls on Chinese investments in US infrastructure.

• Counter-Espionage: Measures against companies like Huawei could limit Chinese tech’s reach in the US.
• Academic Restrictions: Limiting Chinese academic collaboration would impact US research institutions that benefit from Chinese funding and partnerships.

Harris’s Approach: Harris would likely focus on export controls for critical technologies.

• Export Restrictions on AI and Supercomputing: Continuing Biden’s tech restrictions would curb Chinese access to US tech, pressuring firms like Nvidia to shift focus away from China.

Geopolitical and Diplomatic Stances

Trump’s Approach: Known for aggressive rhetoric and isolationism, Trump’s policies could shift power dynamics.

• Alliances: Reduced US military presence in the Asia-Pacific could open opportunities for China in the South China Sea, affecting stability.
• Taiwan: Trump’s criticism of Taiwan’s dominance in chip manufacturing complicates US-Taiwan relations, impacting suppliers like TSMC.

Harris’s Approach: Harris would likely continue to strengthen US alliances in Asia.

• South China Sea and Alliances: Harris’s support for alliances with countries like Japan and South Korea would create a united front against China’s claims.
• Taiwan Defense: Harris’s commitment to Taiwan’s security would likely maintain stability in the region but could elevate tensions with China.

Business Impacts

Under either administration, US-China relations will remain tense. Businesses should prepare for:

• Supply Chain Diversification: Retailers like Walmart may need to diversify supply chains to reduce reliance on China, shifting manufacturing to Vietnam or India.
• Export Controls: Restrictions on critical technologies could affect companies like Qualcomm, requiring shifts to alternative markets.
• Academic Collaboration: US universities with Chinese partnerships may face restrictions, impacting joint research projects.

Preparing for Either Outcome

Regardless of who wins, businesses should:

• Evaluate Supply Chains: Companies like Apple are already diversifying production to India and Vietnam to offset US-China risks.
• Monitor Tariff Policies: Import-reliant companies like Ford will need to adjust strategies based on tariff changes.
• Build Regional Partnerships: Companies such as Boeing may focus more on regional alliances for stability.

While both candidates will continue a hardline stance, Harris’s targeted approach may offer businesses more predictability, whereas Trump’s broader policies carry higher economic risks. Flexibility and preparation will be essential for companies navigating the complexities of US-China relations.

From Shanghai

Alexander Glos