Trump's victory could wipe $420 bn off China's exports

Click on graphic

Victory for Donald Trump in the US presidential election could be a game changer for China's economy. The candidate's promise to slap punitive tariffs on Chinese imports would be highly contractionary, deflationary and wipe hundreds of billions off the value of the world's second-biggest economy, according to new research by Kevin Lai, the Hong Kong-based chief economist for Asia (excluding Japan) at Daiwa Capital Markets. Lai estimates that Trump's suggestion for a 45 per cent tariff on Chinese goods to narrow the trade deficit with America would spark an 87 per cent decline in China's exports to the US - a decline of $420 billion. Here is a chart that demonstrates what could be the impact of this decision: