What would a second Trump presidency mean for China? Goldman Sachs weighs in

BEIJING — If Donald Trump wins the U.S. presidential election, his plans for 60% tariffs on Chinese goods could be a "major downside growth risk" to China, according to Goldman Sachs.

Chances of Trump becoming the next president ticked higher after he survived an assassination attempt on Saturday and selected former critic JD Vance as his running mate two days later.

"Right now exports are a major bright spot in the Chinese economy, and I think the policymakers might want to be prepared," Hui Shan, chief China economist at Goldman Sachs told CNBC's "Squawk Box Asia" on Tuesday.

"We are seeing tariff narratives, not only in the U.S., but across other major trading partners of China's," she said. "So this is not going to be a sustainable driver of growth for China." 

The U.S. is China's largest trading partner on a single-country basis, while the European Union has fallen behind Southeast Asia as China's largest regional trading partner. Trump had raised duties on Chinese goods when president in 2018 and has threatened to increase them to 60% if reelected this fall.

The contribution of goods exports to real GDP growth in China for the second quarter of this year was the highest since the first quarter of 2022, when Covid restrictions limited domestic economic activity, according to Citi.

Meanwhile, Beijing's push to develop high-end manufacturing has not yet been able to fully offset a real estate slump and lackluster consumption.

U.S. officials such as Treasury Secretary Janet Yellen have said that China's policies to boost its industrial capability and technological self-reliance have led to U.S. job losses.

In his first interview since he was selected as Trump's running mate, Vance told Fox News that instead of the war in