Tensions over China’s overcapacity will rise under TrumpBy Brendan KellyWhile US president-elect Donald Trump’s tariff threats are likely to dominate headlines in the near term, China’s industrial overcapacity remains a larger, core challenge for the global economy and trading system in the coming years. On Oct. 29, a month after US tariffs targeting China’s overcapacity went into effect, the European Commission imposed its own tariffs on Chinese electric vehicles (EVs). The policies driving China’s overcapacity — and the resulting trade tensions — are probably here to stay. That said, addressing the complex global challenges posed by China’s overcapacity will require additional trade restrictions and innovative policy tools. Tackling China’s overcapacity problem will require rebalancing the economy and overhauling industrial policies.
