Trump warns of 60% tariffs on China if he returns to power

China's annual economic growth will be cut by more than half if former US President Donald Trump returns to the White House and imposes a 60 per cent tariff on all Chinese goods, Swiss investment bank UBS said on Friday (local time). 

Trump had earlier this year signalled his public hardline policy of imposing a flat 60 per cent tariff on Chinese imports to deny Chinese goods access to the US market.

UBS economist Wang Tao said in a report that if Trump imposed high tariffs on Chinese imports, it would shave 2.5 percentage points off China's gross domestic product (GDP) growth the following year, according to Bloomberg. 

Exports are China's main growth engine. China's growth rate for 2023 was 5.2 per cent, and the country is targeting 5 per cent growth this year. Net exports account for 14% of China's economic growth. However, if Trump were to become president again, it would be a major blow to China's exports.

Of course, China may be able to divert exports through third countries, or even have production done in third countries, so it will be interesting to see how the Chinese economy will actually change in the future. 

In the meantime, US companies that have been sourcing products from China will have to decide whether they want to take the 60% tariff or find another supplier. Perhaps a South Korean manufacturer could be a good alternative. Most of South Korea's exports are concentrated in large companies, and exports by small and medium-sized enterprises are still relatively weak. The South Korean government is taking active steps to support small and medium-sized businesses to export. Due to the poor economic situation in South Korea, many companies are trying to find new buyers. In addition, the exchange rate of the Korean won can be an advantage for U.S. companies.

If you're an American company looking to find a new reliable Korean supplier to replace a Chinese company, you can try to find an item supplier yourself on K-TradeHub.com, or you can ask for a company match. Currently, the portal matches Korean companies with international buyers for free.