Robert Friedland, Chairman of Ivanhoe Mines Ltd. (IVPAF, Financial), discussed China's strategic position concerning potential tariff policies suggested by former President Trump. Friedland noted that since Trump's first term, China has strategically reduced its economic exposure to the United States, fortifying its economy against any proposed tariffs.
Trump has proposed imposing a 10% tariff on imports from all countries and a 60% tariff specifically on Chinese imports as part of his plan to boost American manufacturing. Friedland suggested that China's exports to the U.S. are significantly lower than during Trump's previous administration, reducing their sensitivity to such tariffs.
Capital Economics estimates that U.S. demand for Chinese goods accounts for less than 3% of China's GDP. They suggest that any adverse impacts from tariffs might not be felt until the next half of the year. Friedland stated that China is observing whether Trump will act on these threats and is preparing potential policy responses.
He highlighted that China is employing various strategies to stimulate domestic demand and address local government debt issues, maintaining confidence in the Chinese economy's stability over the next few years. Other analysts agree that the potential tariff increases are unlikely to cause significant direct harm to China's economy in the long run.
Additionally, Trump's tariff strategies might inadvertently benefit China by creating opportunities to bypass Western technological restrictions due to the potential isolationist stance of the U.S. This scenario could bolster China's manufacturing sector as global businesses might prepare for changes, indicating a potential slight growth in China's manufacturing in the short term.
On the investment front, Friedland mentioned that some overseas investors view Chinese stocks as more attractively priced compared to certain U.S. stocks. He also noted that Trump's advisors, including figures like Elon Musk, could positively influence his administration's approach, likening Trump's potential leadership to that of a CEO.
