US-China relations depend on which version of Trump will emerge

By: Evan Medeiros, professor at Georgetown University and former member of the US National Security Council from 2009-2015 / The Financial Times
Translation: Telegrafi.com

No one knows what the future holds for US-China relations, and perhaps not even Donald Trump himself. The president-elect's views on China are numerous and often contradictory. On the one hand, there is Trump who likes Xi Jinping and wants to make big deals with powerful leaders. On the other hand, it is Trump as a strategic competitor who feels cheated by China on the issue of Covid and the bilateral trade agreement. He also knows that it is politically advantageous to be tough on China. Will Trump the negotiator or Trump the competitor emerge? Both are likely to appear.

Perhaps the biggest unknown will be whether Trump himself will direct China policy or let his advisers take control. During the early years of his first term, Trump was very focused on the Phase One trade deal and happily used tariffs as a pressure tool. His advisers, on the other hand – a mix of economic nationalists and national security supporters – pushed for an economic divide, technological restraint and strategic competition. In the last year of his term, after feeling betrayed on the Covid issue, Trump gave free rein to his advisers, especially by supporting Taiwan politically.

For Trump 2.0, the most ardent nationalists and the toughest advisers will return and feel more empowered. The likely next Secretary of State, Marco Rubio, and the next National Security Adviser, Mike Waltz, are both hardliners who see China as an existential threat. At the same time, powerful businessmen with deep interests in China, such as Elon Musk, will also be part of the discussions. As we have seen in his first term, those who speak with Trump most often and those who stick with him to the end will have the main influence.

Perhaps the only thing we can predict is that the range of possible outcomes for US-China relations is wider than ever before. There are possible scenarios for a major deal – a compromise on economic or security issues – or a major deterioration, as relations could descend into deep freeze or even military confrontation.

Three main issues will be pursued. First, for trade, tariffs will be part of the discussion from the start. Trump has promised tariffs of up to 60 percent on Chinese imports, and that is expected to happen. These could be used as a negotiating tactic or as an attempt to hurt China at a time when exports are a key source of growth. Trump's advisers will use the tariffs to move toward economic separation.

How will Beijing respond? Will he show restraint and seek a deal or focus on harsh revenge? China's weak economy may not welcome an all-out trade war, but Xi is a staunch nationalist and has devised a series of countermeasures to impose a cost on the US economy. The trade war could escalate very quickly, with consequences for Washington, Beijing and the world.

For Taiwan, the range of possibilities is very troubling. After Russia's complete invasion of Ukraine, Taiwan is now a global issue. However, Trump remains skeptical of Taiwan's importance to US interests. For him, this can be a bargaining chip. Beijing probably sees Trump's election as a golden opportunity to persuade the US to give up Taiwan – for the right price.

Conversely, many of Trump's advisers would like Washington to support Taiwan and adopt a pro-independence stance. Trump may agree to this, but as a tactic to improve his positions in trade talks. Any move could quickly fuel a crisis with Beijing, at a time when Xi has asked his military to be ready for conflict. It is not clear whether a Republican "MAGA" Congress would be able, or willing, to stop him.

In terms of strategic competition, Trump lacks the ideological focus and passion of some of his advisers, who sometimes support regime change. As before, Trump won't stop them, as long as their actions don't disrupt the deal-making process or make it look bad.

This commitment to competition could manifest itself in a new set of export controls on a wide range of Chinese industries. Trump 2.0 is likely to impose a broader and more costly regime of technological restrictions, unaffected by commercial realities. A rapid technological disconnect may be on the horizon.

Amidst these mixed results, two things are certain. First, relations will deteriorate, perhaps at a rapid pace. The structural drivers of competition are expanding, intensifying and diversifying. Trump's new team will be impulsive and unpredictable.

Second, China will benefit from the opportunity to position itself as a defender of globalization and multilateralism, while Trump isolates the world with protectionism, isolationism, and harsh rhetoric.

China failed to capitalize on global discontent with America during Trump's first term. She won't make the same mistake again. /Telegraph/