China may view President-elect Donald Trump’s return to the White House as an opportunity for strategic advantage despite immediate economic challenges, according to a leading China expert.

What Happened: Elizabeth Economy, a senior fellow at the Hoover Institution, told Bloomberg TV that while Trump’s proposed 60% tariffs would significantly impact China’s economy, the longer-term implications could favor Beijing’s global ambitions.

“China is probably looking at the return of Donald Trump as short-term pain, but potentially long-term strategic gain,” Economy said. She estimated that China would need to find new markets for approximately $200 billion in exports if Trump’s tariff plans materialize.

The trade restrictions would hit China particularly hard given its current economic struggles, Economy noted. However, she suggested that Trump’s potential impact on America’s global leadership role could ultimately benefit China’s strategic interests.

Economy emphasized that Trump’s presidency could weaken the United States’ traditional position as a major security guarantor, free trade advocate, and democracy supporter on the world stage – areas where China seeks to expand its influence.”It opens up an opportunity for [Chinese Prsident] Xi Jinping to fill the gap to step into the bridge,” Economy said.

See Also: Wall Street Hits Record Highs After Powell’s Speech, Lifts Magnificent 7 Stocks To $17 Trillion In Historic Trading

Why It Matters: Trump’s return has already prompted reactions from China, as seen in recent moves by Chinese leadership. China is actively engaging U.S. allies in Europe and Asia to mitigate the impact of Trump’s proposed tariffs, which could be as high as 60% on Chinese imports. This strategy includes offering tariff cuts and visa exemptions to these allies.

Additionally, the U.S. has taken steps to curb China’s technological advancements. A report reveals that the U.S. has asked Taiwan Semiconductor Manufacturing Co ( TSM ). to halt shipments of advanced chips to China, further complicating China’s economic landscape.

Furthermore, companies like Steve Madden Ltd. are already adjusting their strategies to avoid potential tariffs by reducing manufacturing in China and shifting production to other countries.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.