Search
Close this search box.
Issue Brief
December 16, 2024

L.E.A.D. Project Brief

U.S. President Joe Biden (L) speaks with Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Lima, Peru, November 16, 2024. (Photo by LEAH MILLIS/POOL/AFP via Getty Images)

Trump’s Return Scrambles Outlook

ISSUE BRIEF BY:

Picture of Sourabh Gupta
Sourabh Gupta

Resident Senior Fellow

This article is extracted from Comparative Connections: A Triannual E-Journal of Bilateral Relations in the Indo-Pacific, Vol. 26, No. 2, December 2024. Preferred citation: Sourabh Gupta, “US-China Relations: Trump’s Return Scrambles Outlook,” Comparative Connections, Vol. 26, No. 2, pp 39-58.

On This Page

Summary

US-China relations through 2024 remained marked by a paradox. On the one hand, ties displayed a distinct stabilization. The two sides translated their leaders’ modest “San Francisco Vision” into reality. Cabinet officials and the numerous working groups met in earnest and produced outcomes, functional cooperation was deepened though differences emerged, sensitive issues were carefully managed, and effort was devoted to improving the relationship’s political optics. US electoral politics, or threat of Chinese interference in the elections, did not materially impinge on ties. On the other hand, the negative tendencies in US-China relations deepened. With its time in office winding down, the Biden administration went into regulatory overdrive to deepen the “selective decoupling” of the two countries’ advanced technology ecosystems. China methodically responded in kind using its now-robust economic lawfare toolkit. The chasm in strategic perceptions remained just as wide. Donald Trump’s return to the Oval Office portends a period of disruptive unpredictability in ties, although “Tariff Man” Trump can reliably be expected to enact additional impositions on Chinese imports.

Two years to the day that they met on the sidelines of the G20 summit in Bali, Indonesia to place a floor under their troubled relationship and initiate a process of emplacing guardrails, Joe Biden and Xi Jinping met for their third in-person meeting as presidents in Lima, Peru, on the sidelines of the APEC Economic Leaders Meeting. In Lima, the two presidents took stock of the gradual rehabilitation of ties over the past two years, despite its early interruption by the balloon incident, and pledged to consolidate the fragile stability and make the relationship more predictable. They also patted themselves for harvesting some of the low-hanging fruit since their summit in Woodside, California, 12 months ago. US-China relations have made important incremental progress over the past 18 months, starting with Secretary of State Antony Blinken’s visit to Beijing in June 2023 (Blinken returned to Beijing again this April). In Spring 2023, aside from meetings of their senior-most officials, there was practically no active communication channel between the two sides. Fast forward to today and there are more than 20 dialogue frameworks that span the range from diplomacy, security, economy, trade, fiscal affairs, finance and military to counternarcotics, law enforcement, agriculture, climate change, and people-to-people exchanges.

In Spring 2023, the US Treasury Department was sanctioning Chinese entities for their involvement in supplying chemical precursors to US-bound fentanyl trafficking networks. Today, 55 dangerous synthetic drugs and precursor chemicals have been class scheduled by Beijing, online platforms and pill presses shut down, and arrests connected to the illicit chemical industry made. Reciprocally, China’s Ministry of Public Security-linked Institute for Forensic Studies has been delisted from the Entity List—a rare case of an adversary state entity being delisted without any underlying change in the listed reason for its blacklisting. 

In Spring 2023, US-China people-to-people as well as academic ties were frail, having suffered body blows stemming from the polemics associated with the origins of the COVID-19 virus and the Justice Department’s earlier “China Initiative.” There were only 12 weekly roundtrip passenger flights in service. Today, the two sides are on the verge of renewing their landmark Science and Technology Agreement (STA), the first major agreement to be signed by the two governments following the re-establishment of diplomatic relations in January 1979, pandas are returning to zoos in San Diego, Washington, DC and San Francisco, the number of roundtrip passenger flights has risen to 50 (prior to COVID-19, the number exceeded 150), and the health authorities of the two countries recently held their first ministerial-level dialogue in over seven years. The cases of “wrongfully detained” Americans have been resolved (although many others remain on exit bans), reciprocal repatriations of illegal migrants and fugitives have been conducted, and the Mainland’s Level 3 travel advisory status (Reconsider Travel) has been lowered to Level 2 (Exercise Increased Caution) by the State Department. For his part, President Xi has committed to inviting 50,000 young Americans to China on exchange and study over the next half-decade.

A pair of 3 year old Giant Pandas, Bao Li and Qing Bao, arrive on a FedEx Boeing 777 plane from China at Dulles International Airport on October 15, 2024 in Dulles, VA. Eleven months prior three giant pandas, Tian Tian, Mei Xiang and Xiao Qi Ji left Washington, DC traveling 19 hours to the Wolong Panda Reserve in Chengdu, China. (Photo by Kent Nishimura/Getty Images)

In Spring 2023, US-China climate change discussions—a mutually beneficial area of cooperation – were at a standstill and would only resume after the visit to Beijing by Special Climate Envoy John Kerry in July 2023. Today, the US-China bilateral Working Group on Enhancing Climate Action in the 2020s has met twice and, in keeping with their Sunnylands Statement of November 2023, the two parties jointly hosted a Methane and Other Non-CO2 Greenhouse Gases Summit at COP 29 in Baku, Azerbaijan. In Spring 2023, the idea of hosting exchanges on AI hadn’t even been broached, even as US and Chinese organizations were moving forward with transformative breakthroughs in Generative AI. Today, the two sides have begun a constructive and candid policy dialogue on AI, co-sponsored each other’s resolutions on AI at the UN General Assembly, and affirmed the need to ensure that unsupervised AI must not allowed to dictate command-and-control of critical weapon system – especially the decision to use a nuclear weapon. The fear that China would be treated as a political football during the US election season or that it would interfere in the elections using disinformation operations did not materialize either (although there may have been interference in down-ballot races).   

For all the positives that have flowed from their newly established or restarted dialogue frameworks, not all conversations ended in constructive outcomes. This is understandable. As the “new normal” in US-China relations takes shape, there is no one typology of interaction that can cut across the various “baskets” of US-China issues. A complex relationship demands complex choices that are built as much on ideology and values as much on interests, objectivity and realism. 

Mil-Mil Conversations Go Sideways on Strategic Arms Proliferation Concerns

The decision to restart mil-mil communications at the Biden-Xi Woodside summit in November 2023 was a bright spot in bilateral ties, to the extent that “jaw-jaw” is vastly preferable to “war-war.” Mil-mil ties had been suspended by China, it bears remembering, following Speaker Pelosi’s visit to Taipei in August 2022. This included the Military Maritime Consultative Agreement (MMCA) talks, an operational safety dialogue between US INDOPACOM and PLA naval and air forces, which had convened regularly since 1998. The full range of institutionalized high-level mil-mil communications stand restored as of this writing. 

In January and September 2024, the 17th and 18th editions of the Defense Policy Coordination Talks, an annual deputy assistant secretary level policy dialogue, were respectively conducted. The MMCA working group met earlier in April and again in November, and a theater commanders video-teleconference featuring the Commander of the US Indo-Pacific Command and the PLA’s Southern Theater Commander was held in early-September (the two met later in September at the Indo-Pacific Chiefs of Defense Conference in Hawaii). Topping these engagements was the first in-person meeting between the two countries’ defense chiefs, Secretary Lloyd and Minister Dong, in a year-and-a-half on the margins of the Shangri La Dialogue (SLD) in late-May. While both sides had tough words for the other in their SLD remarks, they also agreed to convene a crisis communications working group by the end of 2024. For added measure, National Security Advisor Sullivan was afforded the opportunity to meet the Vice-Chairman of the Party’s Central Military Commission (CMC), Zhang Youxia, during his late-August visit to Beijing, the first such NSA-CMC vice chair meet in eight years

The mil-mil communications were wholesome but could not mask the wide chasm between the two sides on strategic arms-racing and deterrence concerns. It was reported in August that Biden had reoriented a highly classified US nuclear strategic plan, the Nuclear Employment Guidance, in March 2024 to account for an era of multiple nuclear-armed adversaries in the context of China’s rapidly growing nuclear arsenal. Whether linked or not, China discontinued the bilateral arms control and nonproliferation consultations in July (lamely using Taiwan arms sales card as an excuse) and, later that month, unleashed broadsides against AUKUS’ nuclear submarine cooperation pillar as well as NATO’s nuclear sharing arrangements (it issued a No-first-use Nuclear Weapons Initiative too). It also conducted its first ICBM test in 44 years in late-September, with the projectile splashing down in the South Pacific. The US and China also clashed over the deployment of the Typhon Mid-Range Capability missile system in the Philippines. The US side cautioned the PLA for its dangerous, coercive, and escalatory tactics in the South China Sea which could trigger Article V of the US-Philippines Mutual Defense Treaty; the Chinese foreign ministry spokesperson admonished the US side for the first deployment of a strategic offensive weapon system outside its territory and in the Asia-Pacific since the end of the Cold War. 

Careful Management on Taiwan Amidst Lobbing of Rhetorical Salvos

The Taiwan Question remained a bone of contention in US-China relations during the mid and latter part of 2024, to nobody’s surprise. In early-May, China’s foreign ministry spokesperson blasted Secretary Blinken’s encouragement as well as that of seven other allied nations to the WHO to invite Taiwan as an observer at the 77th World Health Assembly meeting. Later that month, the ministry spokesperson “deplore[d] and oppose[d]” Blinken’s note of felicitation to Lai Ching-te on his inauguration as president of the self-governing island. Lai had angered Beijing by noting that “the PRC and the ROC are not subordinate to each other” in his inaugural address. He was called out by name; treatment that took Beijing three years to mete out to his predecessor Tsai Ing-wen. 

The Biden administration, for its part, was critical of the PLA’s Joint Sword 2024 A and B military exercises that were conducted in the wake of Lai’s inaugural address in May and his “Double Ten Day” address in October, respectively. Joint Sword 2024-A had focused on seizing the initiative in the Taiwan Strait battlefield, with the training content aimed at precision strikes on critical land, air and sea targets; Joint Sword 2024-B featuring the PLA Navy and the Coast Guard sought to execute a blockade of ports and other key locations. The exercises were denounced as “irresponsible, disproportionate and destabilizing.” The Biden administration also strongly condemned the June 2024 judicial guidelines issued by China’s Supreme People’s Court which imposes criminal punishments on “diehard Taiwan independence separatists” for conducting or inciting secession, noting that threats and legal warfare would not achieve peaceful resolution of cross-strait differences. And in conjunction with like-minded ANZUS, NATO and Japanese government allies, the US State Department sought to develop a common front to debunk China’s conflation and “mischaracterization” of UNGA Resolution 2758 with its “One China Principle.” China’s foreign ministry was having none of it, and political parties at the National Assembly in Taipei too were unable to arrive at a consensus on this point. All along, the Biden administration maintained a consistent clip of arms sales to the island, including by utilizing presidential drawdown authority, as well as periodic transits through the Taiwan Strait in international waters and airspace. China, for its part, built out its Taiwan arms sales-related list of sanctioned US parties under the framework of its Anti-Foreign Sanctions Law. 

A man watches a news programme about Chinese military drills surrounding Taiwan, on a giant screen outside a shopping mall in Beijing on October 14, 2024. China said on October 14 it had "successfully completed" its "Joint Sword-2024B" military exercises around Taiwan, adding the drills had "fully tested the integrated joint operation capabilities of its troops". (Photo by GREG BAKER / AFP) (Photo by GREG BAKER/AFP via Getty Images)

Tit-for-tat skirmishes between the two sides were not the whole story on the Taiwan Question. In Lima, Peru, Biden again assured his counterpart that the US does not support Taiwan independence (Xi had attempted—unsuccessfully—in Woodside to alter the phraseology to “oppose Taiwan independence’) and added that the US does not use the Taiwan card to compete or contain China. More broadly, Biden yet again reemphasized his “Five Noes’: that the US does not seek a Cold War with China; does not seek to change China’s system; the revitalization of its alliances is not directed at China; does not support Taiwan independence; and does not seek conflict with China. Whether believed or not in Beijing, these assurances offer a steadying framework for future-oriented ties.

Playing Cleanup on Advanced Technologies Decoupling

In an important speech in September 2022, NSA Jake Sullivan had listed three “families of technologies” —computing related technologies; biotechnologies and biomanufacturing; clean energy technologies—as “force multipliers” that would define the geopolitical landscape of the 21st century. Given their foundational nature, the US would seek to “maintain as large a lead as possible” over adversary nations, including by resorting to a “small yard, high fence” approach on strategic trade controls. Following the speech, the US Commerce Department issued an expansive regulation that instituted controls on China’s access to advanced computing chips as well as semiconductor manufacturing equipment essential to producing such chips. 

With the clock winding down on its term in office, the Biden administration maintained its frenetic rulemaking pace, issuing a number of regulations in quick succession to deepen the “selective decoupling” of the two economies’ advanced technology ecosystems. On Sept. 23, the administration released a Proposed Rule to secure the supply chain for connected vehicles, which prohibits the import of Chinese hardware and software integrated into vehicle connectivity system (VCS) and software integrated into automated driving system (ADS). VCS is the set of systems that allow the vehicle to communicate externally, including telematics control units, Bluetooth, cellular, satellite, and Wi-Fi modules. The ADS includes the components that collectively allow a highly autonomous vehicle to operate without a driver behind the wheel. The Proposed Rule follows an Advanced Notice of Proposed Rulemaking (ANPRM) issued earlier this February. 

On Oct. 29, the US Justice Department issued a massive 422-page proposed rule to prevent access to Americans’ bulk sensitive personal data as well as government-related data by countries of concern, such as China. The rule proposes to establish a new national security-based regulatory regime governing the collection and transfer of personal data. Two types of commercial transactions between a “US person” and a “country of concern” are to be prohibited – transactions involving “data brokerage” (with the term defined broadly) and transactions involving human genomic data. The proposed regulation contains an exemption for certain data transfers in connection with biopharmaceutical clinical investigations and post-marketing surveillance data. The Proposed Rule follows a White House executive order accompanied by an ANPRM issued earlier this March. It also follows instances of damaging cyberespionage breaches by China-linked hackers, which include the infiltration of US broadband providers” networks to sweep up the private communications of hundreds of thousands of Americans as well as access the “lawful intercept” system maintained by the Justice Department to place wiretaps on suspected Chinese spies in the US. Earlier in July, the “Five Eyes” countries, joined by Germany and Japan and South Korea for the first time, had issued a rare joint advisory attributing malicious cyber activities to China. President Xi, for his part, disavowed any such conduct in his Lima meeting with Biden, with his foreign ministry spokesperson having earlier thrown the ball back into the US’ court. 

Also on Oct. 29, the US Treasury Department released a voluminous final rule to prohibit outbound investment in semiconductors and microelectronics, quantum information technologies, and AI systems to China. The purpose of the Outbound Order is to shut down a pathway for Beijing to exploit the “intangible benefits” – including enhanced standing and prominence, managerial assistance, investment and talent networks, market access, and enhanced access to additional financing – that accompany the flow of US investments to China. The order marks the first instance of the US government controlling outbound capital flows for national security reasons. And while the regulation is framed as addressing capital flows, it effectively regulates the coverage of “greenfield” and “brownfield” investments in these national security technologies and products, too. The Final Rule follows a White House Executive Order issued in August 2023 and a Proposed Rule issued earlier this July. 

Finally, on Dec. 2, the US Commerce Department issued a final rule that upgrades the existing controls on China’s access to semiconductor manufacturing equipment so as to impair its capability to produce advanced node semiconductors. Twenty-four types of semiconductor manufacturing equipment and three types of software tools are to be additionally denied to Chinese end-users. Beijing response to the measure was swift. On Dec. 3, it announced a ban on several minerals essential to semiconductor, communications and military technologies, as well as a prohibition on exports of dual-use items to US military end users. Alongside the semiconductor manufacturing equipment rule, the US Commerce Department also imposed controls on the transfer of high-bandwidth memory (HBM) chips, which are crucial for accelerating AI training and inference as well as added 140 entities spanning tool companies, chip fabs and investment firms to the Entity List. Earlier this May, a number of Chinese quantum technology companies and research institutes had been added, too, to the List. Overall, the number of Chinese entities placed in the Entity List during the 2018-2023 period have increased over 300% (from 218 to 787). As for license applications submitted that involve a Chinese Entity List-ed party, they increased from five in 2018 to a high of 1,751 in 2021, with approximately 33 percent of applications either denied or revoked. 

In addition to these advanced technologies and data flow controls, successive rounds of sanctions were enforced on China for its policies on “forced labor” in Xinjiang and support for Russia’s war in Ukraine. This included the first US sanctions imposed on a Chinese entity for joint development and production of a complete weapon system (the Garpiya series long-range attack unmanned aerial vehicle) with the Russians. No Chinese financial institutions have as yet been sanctioned, despite Secretary Blinken’s threat to do so in his late-April meetings in Beijing. To the contrary, the US Treasury Department and China’s Finance Ministry maintain a cordial working dialogue that spans the range from financial sector operational resilience to debt relief for low-income countries to central bank scenario testing of climate change risks. Earlier in April, the two sides had established dedicated workstreams on Balanced Growth in the Domestic and Global Economies and on Cooperation and Exchange on Anti-Money Laundering under the aegis of their financial and economic working groups. 

“Small yard, high fence” export controls has been one component of the Biden administration’s toolkit to vigorously compete with China in the advanced technologies of tomorrow. Alongside, the administration also passed landmark legislation, such as the CHIPS and Science Act and the Inflation Reduction Act (IRA), as well as employed an impressive array of industrial policy authorities, such as the Defense Production Act, Buy American Act and the Bayh-Dole Act, to incentivize the expansion of domestic productive capacity in key strategic and high value-added manufacturing industries. To this end, and in its waning days in office, the administration aggressively pushed out CHIPS Incentives Awards totaling in the many billions to the likes of IntelBAE SystemsGlobalFoundries, and TSMC. There are uncertainties whether this industrial buildout will continue under President Trump and a Republican Congress, particularly with regard to the proposed IRA project investments (fully 80% of announced Korean and Japanese investments are tied to IRA money). Trump had vowed to “terminate” the IRA on the campaign trail and no Republican supported passage of the legislation in 2022. On the other hand, three-quarters of announced investments are in Republican-controlled districts and 65% of them located in counties that voted for Trump. 

China Responds in Kind

China was active on the “selective decoupling” front too in 2024, having methodically built a robust economic lawfare toolkit over the past five years. These include the Unreliable Entities Regulation (Sept. 2020), the updated National Security Review Mechanism (Dec. 2020), the Unjustified Extraterritorial Measures Regulation (Jan. 2021), the Anti-Foreign Sanctions Law (June 2021), and more lately, a new Dual-Use Export Control Regulation (September 2024) under the framework of its Oct. 2020 Export Control Law. Having absorbed blow after blow of US technology denial measures, China began deploying these tools in earnest in 2024. In March 2024, new procurement guidelines were introduced phasing out foreign operating systems, microprocessors and database software from government PCs and servers. In May, the Cyberspace Administration of China banned the use of the US semiconductor firm Micron’s products in China’s critical information infrastructure following a failed cybersecurity review. There have been calls for a cybersecurity review of Intel too and more lately, a coordinated advisory issued by four Chinese industry bodies to discontinue the usage of US-made chips given that they are “no longer safe.” 

In August, the Ministry of Commerce (MofCom), announced export controls on antimony, a critical mineral with military and civilian applications including battery storage. The antimony controls follow on the heels of controls on gallium, germanium, and high-purity natural and synthetic graphite materials introduced in 2023. These controls were effectively upgraded in early-December 2024 to a full ban “in principle” vis-à-vis the US following the latter’s imposition of export controls on China-destined semiconductor manufacturing equipment. Controls on “superhard materials” such as industrial-grade diamonds and tungsten carbide, used in chip manufacturing-related cutting, grinding, and polishing processes, is anticipated to be the next export control shoe to drop. In September, MofCom announced an investigation into the US parent company of Calvin Klein and Tommy Hilfiger under its Unreliable Entity List mechanism for its exclusion of Xinjiang-originating cotton from supply chains. And in October, sales of key Chinese battery components to the largest US drone maker, Skydio, was revoked under the Anti-Foreign Sanctions Law for its role in arms sales to Taiwan, forcing Skydio to ration batteries to one per drone to customers. 

Wave-upon-wave of Taiwan arms-sales related countermeasures against US military companies and senior executives were imposed too in AprilMayJuneJulySeptember, and December by China’s foreign ministry under its Anti-Foreign Sanctions Law. For added measure, General Atomics Aeronautical Systems, General Dynamics Land Systems, and Boeing Defense, Space & Security were separately added to the Commerce Ministry’s Unreliable Entities List in May. In February 2023, Lockheed Martin and Raytheon Missiles & Defense became the first US entities to be placed on this list for their role in arms sales to Taiwan. The upshot is clear: China’s countersanctions and reciprocal export control regime is being ramped up which will inevitably lead to more US (and foreign) companies being caught in the crossfire between the US and Chinese regimes. 

Doubling-down on Section 301 Tariffs

Trade frictions returned to the fore in US-China relations during the latter half of 2024. The first shot of this new great power rivalry, it bears remembering, was fired in the trade policy arena in the Summer of 2018 when the Trump administration introduced Section 301 List 1 tariffs on $34 billion of Chinese imports. In total, $370 billion of Chinese imports spread across four lists were thereafter subjected to tariffs, with China imposing lesser retaliatory tariffs also. On May 14, 2024, following a statutory four-year review of the Trump-introduced tariffs, the Biden administration not only retained the tariffs but selectively augmented them to the tune of $18 billion for semiconductors, electric vehicles, batteries, battery parts and critical minerals, solar cells, and certain personal protective equipment (final modified rates were notified in September). Concurrently, the White House and the Treasury Secretary accused China of engaging in non-market practices that was creating excess supply to the detriment of industry and workers abroad. China was failing to meet its industrial subsidies-linked notification requirements at the WTO too, especially regarding proliferation of sub-central level “public-private investment funds” which were driving this structural overcapacity. The additional Section 301 tariffs were justified, in the administration’s telling, to protect the historic Chips Act and IRA investments in strategic sectors (semiconductors, batteries, EVs, solar, medical equipment) from being unfairly undercut by Chinese exports. 

The administration’s accusations are not without merit. China’s domestic savings remains excessively high. The fear that these excess savings (and domestic under-consumption) will macroeconomically manifest itself in the form of overproduction that is dumped overseas is genuine. And because a component of this overproduction is the product of non-transparent industrial subsidies, this would amount to unfair trade-distorting competition in international markets. Beijing rejects this characterization. In its view, the current global production landscape is the result of market competition and the international division of labor. Within China, competition in its new energy marketplace is intense; as such, only the fittest survive and therefore tend to prosper in international markets. Export volumes too should not be taken as a benchmark for determining overcapacity either. US, Japan, and Germany’s auto exports for instance account for 23%, 75%, and 50%, respectively, of domestic production; China’s EV exports by comparison account for only 12.5% of production. Besides, there is a huge demand for new energy products in global markets, and it is the fragmentation of global industrial and supply chains due to the adoption of discriminatory subsidy measures by the West that is the primary contributor to “so-called overcapacity,” Beijing counters. China’s subsidy programs adhere to fair competition and non-discrimination rules, are mainly for R&D, are targeted at the consumption end, and are not contingent upon export performance. The WTO secretariat and the European Commission might beg to differ with some of these contentions. 

The Return of “Tariff Man” and the Uncertain Future of Bilateral Ties

A Donald Trump impersonator standing in front of the White House in Washington, DC in a mask and pointing at the camera. (Photo: UnSplash, CC2.0)

“I am a Tariff Man. When people or countries come in and raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking $billions in Tariffs. MAKE AMERICA RICH AGAIN.” 

So tweeted President Donald Trump, three days after a tense but positive meeting with President Xi on the sidelines of the G20 Summit in Buenos Aires, Argentina, in December 2018 as the two sides tried to head-off tit-for-tat tariffs on billions of dollars of bilateral trade. 

Trump may be notorious for his unpredictability and embellishment. But on the issue of trade and tariffs, he has been a pillar of consistency. From his formative 1980s days as a young Manhattan real estate developer, it has been his cardinal belief that goods consumed in the US must be produced at home using US workers. To the extent that some of these goods are imported, an equivalent dollar amount of US goods should be purchased by that country. At day’s end, bilateral trade must be balanced. Anything less is a “loss” for the US. And hence his dislike of the large bilateral trade surpluses run by China and his sense of personal affront when run by allies, such as Japan and Germany originally and South Korea and the Europeans today, which doubly happen to benefit from expensive treaty-underwritten US defense guarantees. 

As president-elect in 2016, Trump vowed to withdraw the United States from the Trans-Pacific Partnership agreement; renegotiate the North American Free Trade Agreement under threat of withdrawal; label China a currency manipulator; bring cases against China at the WTO; and use every lawful presidential power to remedy trade disputes with China and other countries, including the application of tariffs consistent with Section 201 and 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962. Each vow was fulfilled. With Trump now promising to impose tariffs of at least 60% on all Chinese goods (he had threatened China with 45% tariffs during his 2016 political campaign and ended up imposing 25% tariffs), the president-elect deserves to be taken not just seriously but (quite) literally. 

Be that as it may, Beijing is not likely to be in any hurry to flatter the president-elect, having learnt from bitter experience of the limits of its own flattery. Within three months of Trump’s inauguration in 2017, Xi had snagged a high-profile meeting in Mar-a-Lago, which delivered a shiny 100-Day Action Plan under the framework of the US-China Comprehensive Economic Dialogue. Later that November, Trump was feted with a “state plus” visit to Beijing where he became the first foreign leader since the founding of the People’s Republic to dine inside the Forbidden City. None of this flattery prevented his national security team from listing China as a “revisionist power” and inaugurating a new era of great power rivalry just a month later in its National Security Strategy of December 2017. Or prevented his trade policy team from slapping Section 301 tariffs in Summer 2018 and launching the trade war. 

It is not lost on Xi’s China either that engaging “dealmaker” Donald Trump has the potential to backfire, should the attempt at dealmaking fail. The US-China technology war, with its initial focus on kneecapping Huawei, almost-literally dates back to the day in May 2019 when the “90 Day [trade] talks”—that the two leaders initiated at the December 2018 G20 Buenos Aires summit – formally collapsed. China’s drive toward technological “self-reliance” can be specifically dated to this collapse, too. Xi Jinping reportedly observed to his closest confidants that he had considered the 90-Day talks to be an economic matter and “demonstrated utmost sincerity” but the Trump administration deliberately scuppered the negotiation (by insisting that Beijing sign an unfair bargain) to pursue its true objective: complete suppression of China. China would not succumb to pressure, Xi noted. “We have to come together to survive this situation.” 

Where this leaves US-China engagement, remains to be seen. At minimum, the two sides will approach the other warily during the likely-chaotic first year of the second Trump presidency. Almost none of the senior officials who had played a major role in charting the outlines of China policy during Trump’s first term—Secretary of State Pompeo, NSA Robert O’Brien, Deputy NSA Pottinger, and USTR Robert Lighthizer—will be returning in Trump 2.0. Some were even sanctioned by Beijing on their way out in January 2021. One thing is fairly certain though. The multitude of working groups that the two sides had successfully stumbled upon during the Biden-Xi years will be disbanded. In Trump 1.0, the clunky and top-heavy Obama-era Strategic and Economic Dialogue was discarded in favor of four newly established dialogue mechanisms in the areas of diplomacy and security, economic and trade, law enforcement and cybersecurity, and people-to-people exchanges. In Trump 2.0, the wheel will once again be reinvented. 

From a longer-term policy standpoint though, the overarching approach toward China will more-or-less remain the same. Two weeks before the first Trump administration left office, NSA O’Brien had declassified the administration’s overarching strategy document for the Indo-Pacific region, titled the US Strategic Framework for The Indo-Pacific. The strategy document featured five elements: (1) advance economic decoupling and prevent China’s industrial policies and unfair trading practices from distorting global markets and harming US competitiveness; (2) maintain US industry’s innovation edge over China; (3) promote US values and influence in the Indo-Pacific and counter Chinese models of governance, coercive behavior and influence operations; (4) maintain an intelligence advantage over China, and against Chinese intelligence activities; and (5) deter China from using military force against the US and its allies and partners by maintaining the capability to deny China sustained air and sea dominance inside the first island chain in a conflict, defending the first island chain nations, including Taiwan, and dominating all warfighting domains outside the first island chain. These elements will continue to guide China policy in Trump 2.0. And Beijing, for its part, will continue to pursue its interests reactively but firmly within this framework.

— Chronology of US - China Relations —

May – November 2024

This chronology was prepared by Jessica Martin, ICAS Research Associate.