Aurelia Butler

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$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldChina is willing to engage in “positive dialogue” on trade with the US under a Donald Trump administration, senior trade officials said, a day after Beijing introduced a swath of measures to fortify its exporters ahead of anticipated higher tariffs imposed from Washington.At a press briefing on Friday, officials said Beijing would remain “steadfast” in resisting protectionist measures. They also pledged to maintain a stable exchange rate despite expectations that Trump’s policies, which include imposing 60 per cent tariffs on Chinese goods, could lead to a stronger dollar.“China and the United States share strong economic complementarities . . . China is willing to engage in positive dialogue with the US,” Wang Shouwen, international trade representative and vice-minister of commerce, said when asked about the expected Trump tariffs. “At the same time, it remains steadfast in safeguarding its sovereignty, security and development.” His comments came as Beijing on Thursday announced policies to support its exporters ahead of the start of the Trump administration in January, whose early cabinet appointments indicate it will be particularly hawkish on trade with China.The commerce ministry pledged to guide Chinese banks in channelling more credit to the export sector and help companies with foreign exchange hedging. In addition, it would “promote the development of cross-border ecommerce” and encourage agricultural exports, helping companies to “actively respond to unreasonable foreign trade restrictions”.As part of the measures, China would also “attract and facilitate cross-border exchanges of business personnel” through measures such as visa-free travel.China relies heavily on manufacturing investment and exports to boost an economy that is suffering from weak domestic demand following a prolonged property downturn. The country’s surging exports, which in dollar terms rose 12.7 per cent year on year in October, have ratcheted up tensions with trading partners from the US and the EU to developing countries. Brussels accuses Beijing of failing to do enough to stimulate domestic demand and of not removing barriers for foreign companies operating in China or exporting to the Chinese market. China’s imports declined 2.3 per cent year on year in October.Wang said China’s economy had “already demonstrated remarkable resilience” and that the previous round of tariffs initiated by the US had mainly been borne by American consumers.Some economists have speculated that China could counter Trump tariffs by allowing a depreciation of the renminbi, which would make Chinese goods more competitive in foreign exchange terms. If Trump’s tariffs and tax cuts prove to be inflationary, driving up the prices of goods in the US, that could increase the interest rate differential with China and also drive a weakening of the renminbi, they say. But Liu Ye, director of the international department of the People’s Bank of China, said at Friday’s briefing that the central bank would ensure “the renminbi exchange rate remains fundamentally stable at a reasonable and balanced level”.China’s President Xi Jinping has called for a stable exchange rate as the world’s largest exporter and manufacturer seeks to portray itself as a reliable trading partner. More

One of the promised advantages of leaving the EU was that it would allow Britain to forge its own path in the world. With the re-election of Donald Trump, charting an independent route forward became more complicated.Brexit has already left the UK adrift between American and EU trade and regulatory regimes — reluctant to tack too far one way or the other. Now the government is bracing itself for stark strategic choices on pivotal issues ranging from carbon pricing and AI regulation to trade tariffs when the president-elect enters the Oval Office in January.Ministers and officials wonder whether Trump’s return could force the UK to make a decision — either to cleave to Washington or to veer towards Brussels — or whether Britain can still attempt to chart a middle path on a range of policy flashpoints.Lord Peter Mandelson, the former Labour cabinet minister and EU trade commissioner — and a leading candidate to become the next UK ambassador to Washington — has said that the UK must look to “have our cake and eat it” when triangulating with Trump. That will mean seeking side deals with Washington in areas like digital trade and defence while continuing Labour’s current “reset” with trade and security ties in Europe. Others are less optimistic. Walking a line between being both pro-European and Atlanticist will be difficult when it comes down to matters of substance, warns Charles Grant, the director of the Centre for European Reform in London.Some content could not load. Check your internet connection or browser settings.“It seems clear that the UK government will look to walk a tightrope with the Americans; collaborating with the US on defence and lining up with the EU on trade and climate issues,” he says.But, he adds, “the danger is we don’t keep anyone happy: we do just enough with the US to create doubts in European minds that we’re not trustworthy.”Other trade experts and longtime Brussels watchers agree that the result of the US election has the potential to significantly complicate the UK prime minister’s efforts to reset relations with Brussels on a number of commerce and trade issues.Trump will be returning to the White House in the new year just as the British government is seeking to finalise its pitch to the EU on how to deepen ties on trade, energy co-operation and security matters ahead of a planned EU-UK summit in the early spring.“The big question is whether any kind of tariff exemptions or deal with the Trump administration requires a radically different approach to either regulation or trade — if the inconsistencies with the EU became too big, then it would make it difficult to get closer to the EU,” says Olivia O’Sullivan, director of the UK in the World programme at think-tank Chatham House.It is not just about trade or defence: the UK could also find itself caught between Europe and the US over how to deal with China. The government will also have to navigate complex domestic political arguments about its approach that will probably revive many of the issues around the Brexit referendum.Experts caution that there are downsides to pivoting in either direction — but also in failing to make a choice at all. As Kim Darroch, former UK ambassador to the US, warns: “If you choose to leave the world’s biggest trading bloc and drift gently around in the Atlantic — and are not sure whether you want to join an American regulatory regime for trade or the EU one — it’s going to leave you looking very isolated.”The success or failure of London’s attempts to thread the needle with Washington will depend in large part on how hard Trump’s new administration pushes for Starmer’s government to choose between dual trade regimes, according to trade experts.John Alty, the former director-general of trade policy at the UK Department for International Trade during the last Trump presidency, says that Britain’s current trade agreement with the EU in theory left the country free to do side-deals with the US without affecting UK-EU trade.The UK government would be looking to put together a package of “common interests” based around digital trade and supply-chain resilience in critical minerals. At the same time, London will be arguing to Washington that imposing economically damaging tariffs is self-defeating when it is also demanding Europe finds more money to pay for its own for defence. US demands could include some carve-out for US exporters from a UK carbon border tax on imported goods which is due to be introduced in 2027, or politically more contentious “asks”, such as requesting that the UK admit US food products such as chlorine-washed chicken or hormone-raised beef as part of an offer for a full US-UK free trade agreement.A container ship in the UK port of Felixstowe. Some UK industries could be badly affected by heavy tariffs, in particular pharmaceuticals and automotive, which are leading exporters to the US More

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