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How Will Qifu Technology Adapt to Rising Tariffs and Economic Challenges?

2024-11-16 17:51:03.389000

As Donald Trump prepares for a potential return to the White House in January 2025, the implications for US-China trade relations are becoming increasingly concerning. Trump has threatened to impose tariffs on Chinese imports that could reach as high as 60%, with analysts warning that these tariffs could escalate to 100% if he is elected [85b4ec49]. This situation poses significant challenges for Chinese electric vehicle (EV) manufacturers, including BYD, who are looking to enter the U.S. market [f3372a0a][e4a4980a].

In the midst of these developments, Qifu Technology (NASDAQ:QFIN) has reported a 23% rise in net income for Q2 2024, projecting a 36% growth in normalized earnings despite the economic uncertainty surrounding U.S.-China relations [b74d1f6d]. The company is strategically positioned to navigate the challenges posed by rising tariffs and economic volatility, particularly through its credit risk management services [b74d1f6d].

Stephen Orlins, president of the National Committee on US-China Relations, has raised alarms about the potential for severe impacts on ordinary people due to US-China decoupling under Trump. He warns that a revival of the China Initiative from 2018 could further strain relations and slow global innovation as research efforts become duplicated [8100f0e0].

The Biden administration has already implemented 100% tariffs on Chinese EVs as of May 2024, creating a difficult landscape for these companies [85b4ec49]. During his previous presidency, Trump had already set a precedent for high tariffs on Chinese goods, and experts believe that a renewed focus on this strategy could lead to even harsher trade barriers, particularly affecting the EV sector [9bab615f][e4a4980a].

In response to these challenges, Chinese EV manufacturers are increasingly looking to alternative markets, particularly in Africa, to mitigate the impact of U.S. and EU tariffs [e4a4980a]. Meanwhile, EU officials have stated that new tariffs from the U.S. will not impede Chinese EVs from entering the European market, providing a potential avenue for growth [e4a4980a].

Orlins expresses skepticism about Trump's proposed tariffs, suggesting they may ultimately be lower than anticipated, but he also notes an expected uptick in Chinese exports before Trump's inauguration on January 20, 2025 [8100f0e0]. Hopes for a phase two trade deal and reforms from China to reduce the US trade deficit remain, as Orlins emphasizes the need to change negative perceptions of US-China relations [8100f0e0].

Elon Musk's investments in China position him as a key player in navigating these turbulent waters, potentially facilitating negotiations that could soften the impact of Trump's proposed tariffs [f3372a0a]. Additionally, Schwarzman’s established connections with Beijing could enhance diplomatic efforts to address trade disputes [f3372a0a].

As the geopolitical landscape shifts, the implications of Trump's presidency on trade relations with China remain a critical concern. Analysts warn that Trump's proposed tariffs could fundamentally alter China's reliance on exports and manufacturing, essential components of its growth model [0cbefe4b].

In the broader context, Biden is set to meet with Xi Jinping on November 16, 2024, amid rising tensions and the potential for a renewed trade war [85b4ec49]. The International Monetary Fund (IMF) has projected China's growth at 4.8% for 2024, below its target of 5%, highlighting the precarious state of the Chinese economy [0cbefe4b].

As Trump's administration potentially unfolds, the roles of billionaires like Musk and Schwarzman could play a pivotal role in shaping the future of U.S.-China relations, navigating the complexities of trade, tariffs, and diplomacy [f3372a0a]. With the expansion of BRICS, including new members like Saudi Arabia and Iran, the global economic landscape is poised for significant shifts that could further complicate U.S.-China relations [85b4ec49].

Disclaimer: The story curated or synthesized by the AI agents may not always be accurate or complete. It is provided for informational purposes only and should not be relied upon as legal, financial, or professional advice. Please use your own discretion.