by Plamen Tonchev*
On the one hand, there’s an effusive Donald Trump who regularly comes up with grandiloquent statements, versus a buttoned-up Xi Jinping who never veers away from his written talking points. On the other hand, the two countries have locked horns in a major power struggle in a framework that’s too complex to authoritatively read through. While nobody has a crystal ball, a look at a sample of views recorded on both sides may give one an initial inkling.
Trump’s team and views on China
There seem to be three factions in the Trump 2.0 team in charge of China policies. Hawks insist that the U.S. needs to confirm its global hegemonic weight, by making the most of its military might, economic heft and international clout. Prioritisers warn that the American lead vis-à-vis China is narrowing, so the Asian giant should be the centre of attention in Washington’s foreign policy, even if at the expense of U.S. allies and partners – primarily Europeans.
Restrainers who argue that the new administration should focus on domestic issues are the most fervent supporters of the America First doctrine, largely based on the political energy of the MAGA movement that brought Trump back to power. In any case, there are overlaps between these schools of thought and a clear-cut Trump 2.0 China policy has yet to take shape.
Being highly unpredictable, the U.S. president himself has toggled at times between positive signals and threats to China, though his statements largely suggest that he might be tempted to consider a tough bargain with Beijing rather than a divorce. And, of course, there’s Elon Musk who views China as a key market for his Tesla company and a host to a huge car factory in Shanghai. Yet, he has also stated that, while TikTok has 170 million followers in the U.S., his X (former Twitter) is not allowed to operate in China – a rare occasion of even mild criticism of the Chinese regime voiced by Musk.
Notably, president Trump has chosen former Republican senator David Perdue as the U.S. ambassador in Beijing. Critics have complained that in his 40-year career as a business executive, Perdue relied on outsourcing American jobs to Asia, a practice Trump has railed against and vowed to end.
Tensions between the three camps are gradually beginning to surface. Some Republicans are calling for the revocation of China’s most-favoured-nation status and tend to see decoupling as the ultimate objective of the coming trade war. This certainly is the view of Peter Navarro, who was sanctioned by Chinese authorities in 2021 and is now back in the second Trump administration as a senior counsellor for trade and manufacturing. A strong proponent of reducing U.S. trade deficits, he is known for his harsh stance towards China, accusing it of unfair trade practices and describing it as an existential threat to the U.S.
At the same time, there’s the assumption that the president’s obsession with the “beautiful word tariffs” would be checked by traditional conservatives left within the administration. For instance, there have been calls for the new administration to develop a differentiated tariff rate for China, rather than an across-the-board rate, so as to protect the interests of the U.S. and its allies in de-risking from the PRC in critical supply chains.
Things appear to be a bit clearer in the emerging hard core security establishment in Washington, D.C. Marco Rubio doesn’t seem to be fully in line with Trump’s instinctive preference for transactions over military conflicts. The new state secretary is seen by many as a hawk and, while testifying to the Senate Foreign Relations Committee, he painted a dark vision of the consequences of America’s “unbalanced relationship” with Beijing. However, in endorsing Trump’s views and some of the restrainers’ lines, Rubio blames America’s vulnerability to China on the shift to globalism, which he says “is now a weapon being used against us”.
Pete Hegseth, the controversial defence secretary who barely made it through the Senate hearings, is on record stating that threats in the Indo-Pacific, including a potential seizure of Taiwan by the PRC, should motivate U.S. military modernisation. Guam, in his words, is a linchpin for success, and collaboration with Japan will pay deterrence dividends. Mike Waltz, the new national security advisor, prioritises Washington’s partnerships in the Indo-Pacific and stresses that the U.S. should never allow China to turn Taipei into Mariupol, though Trump was conspicuously vague on the Taiwan issue during his campaign.
How does Beijing view Trump?
Expectations within the Chinese strategic community about the path of U.S.–China relations over the next four years appear to oscillate quite a bit, from fatalistic to optimistic. At one extreme, commentators expect bilateral relations to head for a free fall. At the other, pundits argue that Trump the deal maker could come to terms with China on several important issues, including Taiwan.
By and large, among Chinese analysts publishing on Sino-American relations under Trump 2.0 the sentiment is predominantly pessimistic, punctuated by occasional cautious optimism. The general impression is that the flock of China hawks appointed by Trump to key foreign policy and trade positions in his second administration does not bode well for the Washington-Beijing relationship.
They opine that, although the U.S. president himself may not want a direct geopolitical and military conflict with Beijing, he is likely to exert geopolitical and military pressure on China in order to win bargaining power in the field of science, technology, economy and trade.
Pessimists go on to point out that, with a few insignificant changes in form, Biden largely inherited Trump’s China policies in substance, as exemplified by the “small yard and high fence“ strategy. In their view, the 47th U.S. president is now back to take on the “unfinished business” he left behind in January 2021. Yet, some scholars and officials in the PRC credit the Biden administration for adjusting its tactics from an intense confrontation to managing competition through guardrails.
Cautious optimists argue that the future of U.S.-China relations is not preordained and their trajectory will largely depend on Trump’s personal decisions. If the U.S. president is in charge of Sino-American relations, the argument goes, a showdown could be avoided and perhaps even a “grand bargain” between the two powers would not be unthinkable.
Other commentators hope that there will be backchannel negotiations with China through close advisors and business intermediaries, such as Elon Musk. They argue that the threat of high tariffs may simply be a negotiating tactic, i.e. a so-Donald-Trump bluff, as the risks of inflation could deter the U.S. president from imposing them.
Some observers assert that under Trump 2.0 the U.S. will resume the status of the United States of America and will no longer be the United States of the World. This, in their view, is good news for China, as Trump’s return to the White House will deconstruct America’s alliance and reduce its international influence. In a similar vein, a prominent Chinese international relations scholar writes that, ultimately, Trump’s isolationism will be beneficial to China’s continued rise.
Representatives of both camps expect to see an America characterised by what they view as wildly arrogant and unbridled hegemonic behaviour, even if a full decoupling of the two countries remains an unlikely prospect. Another point they agree on is that Trump will initially focus on the conflicts in Ukraine and the Middle East and may even ask China to play a role, therefore facilitating a ceasefire in Ukraine might emerge as one of the limited opportunities for cooperation between the two powers.
Interestingly, however, Trump’s expected contribution to appeasement in Europe and the Middle East is seen by other analysts as a prerequisite that would allow the U.S. to focus resources more effectively on its strategic competition with China. Along this train of thought, Washington will seek to weaken Sino-Russian relations through a ceasefire in Ukraine.
On trade, China clearly wants to avoid a headlong clash with the U.S. This is why Beijing is likely to hold its fire as long as possible, though it may have to hit back in the end. China’s retaliation is likely to target sectors such as critical minerals, where Beijing clearly enjoys a dominant position on a global scale. Furthermore, unlike during Trump’s first presidency, China now appears better prepared to counter U.S. tariffs. Through economic diversification and reduced reliance on American markets, Beijing has bolstered its resilience and this could diminish the effectiveness of Trump’s aggressive economic strategies.
For all that, China needs to strike the right balance. Washington is capable of imposing highly damaging export controls on high-tech industries or exploiting the privilege of owning the greenback as the leading international reserve currency. At the same time, CCP leaders must also recognise unfavourable public opinion towards the U.S. in their own country and will seek to avoid being perceived as weak by Chinese citizens.
A temporary repose?
For the time being, both the U.S. and China are careful to keep temperatures as low as possible. Since the election last November, the two presidents have spoken on the phone. And so have the two countries’ top diplomats – on the face of it, yet another positive sign, despite the very different accounts of what they reportedly said about Taiwan. In an unorthodox move, Trump invited Xi to his inauguration last January. The Chinese supremo did not turn up, but his deputy Han Zheng served as an envoy for him, the first time ever a senior PRC official attended the inauguration ceremony of a U.S. president.
Moreover, the tenor of Trump’s inaugural speech shows that Sino-American relations are unlikely to be on the top of his to-do list over the first several months. The U.S. president’s first priorities are to deport migrants and get grocery prices down. A spat with Jerome Powell is out in the open, as the Fed chair has not given in to Trump’s call for lower interest rates. And the U.S. president may have to brace for a raft of other domestic battles as well, now that his opening salvo of executive orders is already being challenged in blue states and courtrooms across the nation. So, China can wait for a while.
Tellingly, state-run media outlets in the PRC have been given orders to woo the new occupant of the White House, by putting forward the argument that Republican presidents traditionally tend to focus more on economic and social development while downplaying ideological differences. On some occasions they are even overdoing it by asserting that so far the Trump administration’s statements regarding relations with China are distinctly different from those of its “confrontational predecessor”.
At the same time, while a usually brawly Trump has indeed struck a fairly conciliatory tone towards Xi since winning the presidential election, this does not look very different from the honeymoon the two leaders enjoyed in 2017. In April that year, Trump hosted Xi at Mar-a-Lago, and then reciprocated the state visit in November 2017. Yet, the honeymoon ended abruptly when Trump launched the trade war on China the following year. A replay of the same scenario can all but be ruled out.
Trade will certainly be an area of heated confrontation between the two powers. In 2024, bilateral trade grew by 4.9% year-on-year, with China importing agricultural products, energy, pharmaceuticals, and aircraft from the US, while exporting mostly clothing, consumer electronics, and household appliances. A year earlier, the trade deficit of the U.S. vis-à-vis China amounted to $280 billion and this is a major irritant for Trump and his staff.
However, enacting tariffs on imports from China will be easier said than done and will take time. This may – partly at least – explain why, starting from 1 February 2025, Chinese goods imported into the U.S. are subjected to a relatively modest additional 10% tariff, not as steep as the menacing “up to 60%” Trump spoke about while on the election trail. Exactly how the trade dispute between Washington and Beijing will evolve over the next four years remains to be seen, as it will depend on developments in a number of other policy areas that do not relate exclusively to trade.
On Taiwan, Trump could possibly bully the authorities of the self-ruled island into increasing its defence spending and compel advanced semiconductor manufacturers there to expand their investments in the U.S. Moreover, with geopolitics cutting across an ever-growing spectrum of issues, Trump’s economic toolkit alone will not be a panacea.
China’s muscle-flexing in the Taiwan Strait and the South China Sea will remain high on the bilateral agenda, and the U.S. president cannot afford to appear weak in the stand-off with Beijing. Trump’s insistence on American control over the Panama canal or ownership of Greenland also relates to the geopolitical competition between Washington and Beijing.
Technology will definitely be a line of fire between the two powers, artificial intelligence being the new frontier. DeepSeek, a Chinese AI company, sent shock waves through Wall Street recently, causing a significant crash in stocks due to the much lower cost of its software.
This is yet another strong indication that China may be closing the gap with the U.S. in areas previously thought to be dominated by American tech giants. A new wave of export controls and sanctions from the U.S. and like-minded western partners cannot be precluded, though these measures could be less effective than they were in the past.
Trump has reportedly expressed interest in visiting China in his first 100 days in office. But a meeting between the two leaders may or may not substantially lift ties after several fractious years. The rivalry between the two countries is structural and much more decisive than a Trump-Xi summit.
For now, both powers are trying to second-guess each other’s moves and devise their outsmarting strategies rather than open their cards. Therefore, the relatively calm tone marking the first weeks since Trump’s return to the White House should not be taken at face value and as a harbinger of what’s to come in U.S.-China relations.
*Head of Asia Unit, Institute of International Economic Relations, Athens
**first published in macropolis
By: N. Peter Kramer
