“I think it is mainly down to Trump. The threat is becoming more real.”

So said an economist quoted by Reuters last week for a recap of monthly trade figures out of Beijing. China’s exports grew at the briskest pace in years in October on two kinds of front-running: Holiday stocking and a just-in-case approach to inventories ahead of an election with the potential to restore “Tariff Man” to the US presidency.

Fast forward a week and the world’s breathing a heavy sigh of relief. Although friction between the world’s two superpowers will continue unabated, President-elect Kamala Harris is widely expected to pursue a strategy of “containment without conflict” in coordination with The Quad and America’s allies in Europe………..

I’m just kidding, Tariff Man’s back, and you know what that means vis-à-vis China — “Gina”:

We had the greatest economy we’ve ever had, and we did the deal — I called it ‘phase one’ — so we did the deal — great deal, our farmers were very happy — and then something happens, ok? We get a pandemic — I called it the ‘kung flu’ — and everybody died, ok? Everybody died, and it was a terrible thing, but I don’t blame President Xi. He’s a good friend of mine, we get along very well. Is that such a bad thing? That I get along with Putin? People say ‘Russia, Russia, Russia,’ and I said ‘Who’s talking about Russia? I didn’t bring up Russia.’ A highly respected judge said there was nothing to do with collusion. You ask Paul Manafort’s lawyer. A highly respected man. There was no collusion. It’s a hoax. A collusion witch hoax. And these people are sick, ok? They’re sick, evil people. So like I said, we’re going to be doing tariffs, and China’s going to be paying and we’re going to be bringing in billions of dollars.

Don’t laugh. I mean, do. Do laugh, because it’s funny, but I’m only half-joking. There are several direct quotes in that otherwise satirical Trump spiel. The world’s in for four years of Freudian slips and non sequiturs, and that’s assuming he leaves after his second term, not a safe bet by any stretch.

It’s hard to know what they’re thinking on the Standing Committee in Beijing right about now. I imagine they’re at least a little bit bemused just like everyone else. Chinese state media spent the weeks leading up to the US election deriding the American political process as chaotic and violent, which is to say making the case for autocracy. Be careful what you wish for, People’s Daily! Because I can assure you that at some point over the next four years, assuming Trump stays healthy enough to serve, some (most) Republicans will move to suspend presidential term limits in the US. Whether it’ll work’s another matter entirely, but expect that subject to be broached sooner rather than later. My guess: You’ll see a trial balloon or two floated by the end of 2025.

China’s supposedly playing “the long game” when it comes to strategic competition with the US, which is another way of saying the Party, for all the overwrought bombast that emanates from Beijing’s propaganda machine, is a model of patience. That patience will be tested daily going forward. Populism needs scapegoats, and “Gina”‘s second only to cat-roasting Haitians on Trump’s (very) long list of scapegoats. But there may be a silver lining for Beijing. Hold that thought.

The figure below just shows the front-loading effect mentioned above. China’s exports grew almost 13% in October, the swiftest since the summer of 2022.

As Bloomberg noted on Monday, China’s overall surplus may kiss $1 trillion by year-end.

Read that again. Then consider: Trump’s going to read it too. He’s going to read the headline on that linked Bloomberg article, or whatever version of it Fox and the MAGA media runs. Here’s the actual headline: “China Nears Record $1 Trillion Trade Surplus as Trump Returns”. Trump’s triggered by big numbers. $1 trillion’s a big number. He’s going to be on that like the younger him on a reluctant woman in Bergdorf Goodman. (“When you’re president they let you do it.”)

Now consider: China’s still relying on exports to prop up the economy. Imports contracted 2.3% in October, matching the weakest showing since September of 2023. That’s a God-awful print, and it underscored the message from CPI figures for October, which were characteristically moribund.

Both headline and core consumer price growth were essentially flat YoY, and producer prices spent a — checks notes — 25th month in deflation.

There’s stimulus in the pipeline, but last week the Party again delayed a big unveil in favor of announcing a debt swap program which sounded impressive on the headlines, but ultimately underwhelmed given there’s still (still) no indication that Xi’s prepared to countenance an all-out foray into direct, government-funded consumption subsidies.

If Trump had any sense about him — or if he wasn’t too busy fawning over autocrats and coveting the power they wield domestically — he’d see an opportunity here to bury Xi. China’s struggling. They’re not in a position to fight a trade war. Sure, Trump lost the first trade war on some (many) accounts because he’s a moron, but this isn’t rocket science.

Here’s an economy (China’s) which has one and only one thing going for it: Exports. If you target those and ask America’s allies to do the same (not exactly a hard sell, particularly with the Europeans), then instruct your new Treasury chief to take the hardest possible line on the yuan and also to sanction every, single SOE involved in funneling dual-use technology to Russia’s war machine, you could make life very difficult on China at a time when the Chinese populace is already restive (or as restive as it can be in a totalitarian police state where dissent’s illegal).

Of course, Trump won’t do that. Why? Because he’s transactional, not goal-oriented, for one thing, and also because — spoiler alert! — he’s a friend of autocrats. He fancies himself a leader in the fashion of Xi and Putin. Does Trump want to “win trade” with “Gina”? Well, sure, but one thing he’s not interested in is seeing the Chinese people unyoked.

Here’s a counterintuitive suggestion: Sino-US relations will improve under Trump. He’ll go after China’s trade surplus (“A trillion dollars! Think of it!”) and he’ll carry on about rape-by-trade, but in the final analysis, Trump’s geopolitics his autocrat-friendly, with the exception of Khamenei.

At the end of the day, Trump’s not a democrat with a small “d.” In that respect, his reelection was a good thing for Xi and Vladimir Putin. Joe Biden described an epic struggle between democracy and autocracy. That battle’s over now. Autocracy won when Wisconsin was called for Trump early on November 6.