Trump's Tariff Threat Could Spark Short-Term Growth in the Global Manufacturing Sector

Forex - Trump's threats of imposing a 60% customs duty on imports from China are causing unease globally. Economists suggest that with Trump's inauguration on January 20, factories worldwide may work overtime to ship as much as possible before potential tariffs come into effect. Joe Lupton, a senior global economist at JPMorgan, stated, "There could be real front-loading activity before the tariffs take effect. As businesses try to get ahead of this, you may see some surge in global manufacturing, particularly in Chinese manufacturing, as we enter the first quarter."

Demand for imports, including those from China, could also come from within the United States. Zichun Huang, a China economist at Capital Economics, noted in a Thursday report, "Trump's return could create a short-term boost in Chinese exports as U.S. importers ramp up purchases to get ahead of the tariffs." Nomura economists argue that due to Trump's focus on reducing the U.S. bilateral trade deficits, Asia's export growth may fall into negative territory in the second half of next year. Among the top ten countries with trade deficits with the United States, six are Asian countries, including China, Vietnam, Japan, South Korea, and India.