Therefore, he said, it will have to export more to other countries, including the US – which may respond with increasing tariffs.

Imposed since the Donald Trump administration, average US tariffs on imports from China remain elevated at 19.3 per cent. The US also has 247 anti-dumping and countervailing duty measures in place against Chinese goods, including steel, chemicals, machinery and automobiles, Kennedy added.

To retaliate, China attached additional tariffs on certain US goods. And the issue remains a friction point between the two nations.

William Reinsch, a chair in international business at CSIS, said, though, that a lengthy legislative process and lack of consensus in the US Congress could delay final enactment of any potential new tariffs.

“It’s going to take longer than 2024 to get there, because it’s a process issue,” Reinsch said. “And the process is not short.”

China’s exports to US endure steepest plunge in nearly 30 years

Historically, passing significant legislation tends to be difficult in an election year, but tough-on-China bills could be the exception, given bipartisan wariness towards Beijing.

So far, there has been no broad national consensus on increasing tariffs against China, and the idea is unpopular with the US business community, which has sought to remove the Trump-era tariffs.

Still, any announcement of trade bills or import duties investigations would have a chilling effect on bilateral trade and investment, Reinsch added.

In 2023, China’s exports to the US suffered their deepest decline in almost three decades, falling by 13.1 per cent compared to a year earlier to US$500.3 billion, according to China customs data.

The panellists noted that while the US and its allies share rising economic and security concerns towards Beijing, it remains very challenging to take joint actions. Many US allies, they noted, do not have not much interest in a broader decoupling with China.

“One of the risks that the US runs – if it heads in that direction [of decoupling] – is getting out of step with its trading partners around the world and ending up isolating itself,” Kennedy said.

14:45

An unwinnable conflict? The US-China trade war, 5 years on

An unwinnable conflict? The US-China trade war, 5 years on

While semiconductors and critical minerals are already contested areas, electric vehicles might emerge as a new focus dominating US-China economic competition this year, said Ilaria Mazzocco, a chair in Chinese business and economics at CSIS.

“The debate is not necessarily going to be just about EV imports into the United States, which of course are not particularly significant at this time,” she said.

“It’s going to be about future imports. More importantly, it’s going to be about the whole value chain.”

When all the data is tabulated, China is set to have surpassed Japan as the world’s leading exporter of automobiles in 2023, with major destinations spanning from Europe to Southeast Asia.

But a stiff 27.5 per cent tariff – in place since Trump’s presidency – along with US President Joe Biden’s signature legislation, the Inflation Reduction Act, that provides subsidies for domestic electric vehicle manufacturers, have largely kept Chinese EVs at bay in the US market.

TSMC founder Morris Chang’s major worry: US-China decoupling

Still, US reliance on imports of Chinese-made lithium batteries has continued to rise in recent years. In the first 11 months of 2023, China’s share of US total lithium battery imports was more than 70 per cent, according to South China Morning Post calculations based on US census data.

“In EVs, there’s a fundamental question about whether China’s going to be part of the solution or they’re just the entire problem,” Kennedy said.

“I think it’s going to be hard for the US to make its energy transition, particularly in transportation, without having some amount of Chinese participation – particularly in batteries.”