Will Trump's Return Disrupt the Growing China-Russia Trade?

As of November 14, 2024, the dynamics of China-Russia trade are poised to reach unprecedented levels, with projections indicating that total trade could surpass previous records. In the first ten months of 2024, trade between China and Russia reached $202.2 billion, marking a 2.8% increase compared to the same period in 2023. Notably, October alone saw a remarkable 26.7% year-on-year increase in China's exports to Russia, solidifying Russia's position as China's sixth-largest trading partner. [890d9f8b]

The surge in trade is largely attributed to the exit of Western brands from Russia, which has led to a significant increase in Russian imports of Chinese goods, particularly car parts and machinery, which neared $25 billion. This shift reflects a broader trend where China is stepping in to fill the void left by Western companies. [890d9f8b]

However, the outlook for this burgeoning trade relationship is clouded by the potential return of Donald Trump as US president. Analysts are concerned that Trump's administration may reintroduce stringent sanctions that could complicate trade dynamics between China and Russia. The recent temporary lifting of sanctions on 11 Russian banks, which had been excluded from the SWIFT payment system, further complicates the financial landscape for these transactions. [890d9f8b]

In the context of ongoing US sanctions against Russia, the US Treasury has been actively targeting entities involved in facilitating trade with Russia. Nearly 400 corporations and individuals across various nations have been sanctioned, with the aim of diminishing Russia's military capabilities. Deputy Treasury Secretary Wally Adeyemo reiterated the US's commitment to these sanctions, despite projections of a potential 3.5% to 4% growth in Russia's economy for 2024. [a479ec79]

As China and Russia continue to deepen their economic ties, the implications for global trade dynamics are significant. The establishment of alternative payment systems and the push for local currencies in trade, as advocated by BRICS nations, may further reshape the economic landscape. Brazilian President Lula da Silva's call for alternative trading systems underscores this shift. [a479ec79]

The cautious approach of Chinese state-owned banks, which have halted large-scale transactions with Russia since August 2024, highlights the complexities of navigating international sanctions while pursuing trade opportunities. As the geopolitical landscape evolves, the future of China-Russia trade remains uncertain, particularly in light of potential changes in US policy. [3bcaa3e0]