Eurasia Group founder and president Ian Bremmer warned Monday that he believes the US is headed for a trade war with China this year as Donald Trump assumes the presidency for the second time.
"Like two boxers touching gloves before a match, there's a fight that's coming," Bremmer told Yahoo Finance during an interview conducted at the World Economic Forum in Davos, Switzerland.
"Everyone around Trump, with the exception of Elon [Musk], is leaning into 'we want to hit China — we want to decouple our economy from theirs,'" Bremmer added.
Trump had vowed tariffs of 10% on China on day one and 25% on Mexico and Canada.
But a report from the Wall Street Journal on Monday morning indicated Trump would outline his trade vision but not impose new tariffs immediately. An incoming White House official referred a question on the topic Monday morning to the report and declined to offer additional details.
Bremmer believes the situation with China, though, is different than with places like Mexico, Canada, and Europe if new tariffs are, in fact, imposed. Those places will trade punches in the early days but ultimately get to a deal, he said.
Read more: How do tariffs work, and who really pays them?
China, on the other hand, is not at a place where officials are willing to capitulate to any new Trump demands due to current economic challenges, forcing them to retaliate.
China’s economy grew at 5% last year, meeting the government’s target, but the country is propping up a lackluster property sector and is highly dependent on exports.
Therefore, "what I expect is we're heading towards a trade war with China this year," Bremmer said.
One complicating factor for US-China relations at the moment is the ultimate fate of TikTok, which is controlled by Chinese parent ByteDance and was banned in the US on Sunday after the Supreme Court upheld a law passed by Congress last year.
Trump promised Sunday that he would sign an extension to give the company a reprieve even as legal questions abound about whether he has the authority.
"What Trump is saying he wants to do with TikTok is completely at odds with the legislation that was passed by bipartisan House and Senate and upheld 9-0 in a 6-3 conservative-leaning Supreme Court," Bremmer said.
"So it is utterly unclear ... what Trump is trying to do and what he can actually do.”
In an interview with Yahoo Finance Monday, Bremmer also warned that the world is moving into what he calls a "G-Zero" order: an era in which no one power or group of powers is willing and able to drive a global agenda and maintain international order.
"It’s the law of the jungle where the powerful apex predators [the billionaires] do what they want and everybody else has to suffer what they must," he said.
Bremmer said the "globalist promise" was always supposed to be that the people responsible for governments and industry were going to be accountable to those they had authority over, but now nobody buys that.
Bremmer also said if other countries had situations similar to the US, where billionaire entrepreneur Elon Musk is on calls and in meetings with chief executives and heads of state, it would be viewed as a "kleptocracy."
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