After four years, the man is back!
On November 6th, former U.S. President Donald Trump publicly announced his victory in the 2024 U.S. presidential election.
In fact, no matter who wins the presidency, the reality of the U.S. pressuring China will not change. However, from three perspectives, Trump's return to power will have a more significant impact on China's tire industry.
1. Tariff Policy
On tariff policy, both Trump and Harris advocate for increasing tariffs to promote the return of manufacturing to the U.S. However, Trump's stance is clearly more aggressive, and his attitude toward China is much tougher.
Trump advocates for revoking China's Most-Favored-Nation status and imposing a 60% tariff on Chinese goods.
If Trump returns to the White House, Chinese tires—already struggling under the burden of anti-dumping and countervailing duties (referred to as "double reverse")—will face even more difficulties. Under his leadership, Chinese tire companies' overseas factories may also face sanctions.
2. U.S. Dollar Policy
During his campaign, Trump specifically pointed out that the low value of the Chinese yuan was undermining the competitiveness of U.S. manufacturing. After his election, concerns over the potential restart of the trade war flooded the market, which would likely lead to an appreciation of the yuan.
This would be extremely unfavorable for Chinese tire companies, which currently rely heavily on foreign trade for profits.
From the third-quarter financial reports of various companies, the impact of exchange rate fluctuations on profits is already becoming apparent.
Perhaps the only solution would be to build factories overseas, but choosing the right location for these factories is another major challenge.
3. Relations with Mexico
At present, Mexico has become China's largest tire export destination and a new "investment blue ocean." This indirect method of exporting tires to the U.S. through Mexico has not escaped the notice of high-level U.S. officials.
Traditionally, Trump has had a tough stance on Mexico, while Harris has taken a more conciliatory approach. In reality, both have plans to implement measures to prevent Chinese products from being rerouted into the U.S. via Mexico.
Trump's return to power will likely make this plan a reality, further suppressing China's tire trade.
