Donald Trump to take office today amid fears of trade war

Worries grow of looming clash with China even as Beijing seeks to minimise tensions

Third-grade school teacher Kimi Moro poses with a flag featuring a picture of US President-elect Donald Trump near the Capitol Building in Washington, DC. PHOTO: AFP

Mr Donald Trump takes his oath of office as the 45th President of the United States today, presiding over a sharply divided country that he could also drag into a costly trade war with China.

As security barricades go up in the US capital ahead of massive protests against the incoming president, a different sense of trepidation is growing abroad of a looming clash over trade between China and the US, with dire consequences for the global economy.

Yesterday, the Chinese government sought to minimise tensions, saying that any problem can be resolved through talks, even as the nationalistic Global Times warned that US aviation giant Boeing would be a target of retaliation in the event of a trade war.

Mr Trump has criticised Beijing's trade practices, threatened to impose tariffs on its imports and declared that "everything is under negotiation, including 'one China' ".

His nominee for commerce secretary Wilbur Ross, who has been equally critical of China, on Tuesday told America's trading partners to practise "fair trade" and cut state control over business if they want access to the world's biggest economy.

"The US should provide that access to nations who agree to play by our standards of fair trade," he told a Senate panel on commerce.

Speaking at the World Economic Forum in Davos this week, Chinese President Xi Jinping has said that "no one will emerge as a winner in a trade war".

Commerce Ministry spokesman Sun Jiwen said yesterday that Beijing was willing to work with the new administration in Washington. "I believe China and the United States can resolve any disputes through dialogue and negotiation, and that the China-US commercial relationship will not significantly stray from the path of mutual benefit," he told reporters.

Similarly, Alibaba Group founder and billionaire Jack Ma, speaking in Davos, said a US-China trade war would be devastating. But he said he was hopeful of a compromise.

"I think that China and the US should never have a trade war, will never have a trade war, and I think we should give President-elect Donald Trump some time - he is open-minded, he is listening," said Mr Ma, who met Mr Trump in New York last week. They discussed ways Alibaba could support small businesses in the US by opening up its online marketing platforms to their products.

China's richest man and Hollywood investor Wang Jianlin, too, had words for the incoming US president: The US would be the bigger loser if the entertainment sector fell victim to a trade war.

"The main growth market of English-language films out of the US is actually China, not anywhere else," said Mr Wang, whose Wanda group owns a US cinema chain, a Hollywood production company and the firm that runs the Golden Globe Awards. He had warned last month that the jobs of his 20,000 US employees would be on the line if the Trump administration mishandled Chinese investment.

And in a sign of what else the US could lose by leaning towards protectionism, a panel of regional experts told global leaders in Davos that Asia would push ahead with a China- backed free trade agreement - the Regional Comprehensive Economic Partnership - if Mr Trump follows through with his pledge to ditch the Trans-Pacific Partnership.

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A version of this article appeared in the print edition of The Straits Times on January 20, 2017, with the headline Donald Trump to take office today amid fears of trade war. Subscribe