As US President-elect Donald Trump prepares for his return to the White House, it’s clear that a more hard-line China policy is coming—but the shape that it will take and its limits are not yet apparent. There are some big questions and divisions already emerging in the circles around Trump.
The second Trump administration must ask: Can its China policy can be reconciled with its domestic economic needs? Tariffs are the most certain policy, and it’s possible that trade hawk Robert Lighthizer will return as US trade representative. Some Republican advisors aspire to total decoupling from China, which is the largest supplier of goods to the United States and its third-largest buyer.
Trump’s oft-stated preference for tariffs on China set at 60% may lead to significant inflation and lead the United States to turn to cheaper manufacturing alternatives in countries such as Indonesia or Vietnam. That might ease the blow, though even so-called friend-shoring would run up against the 10 to 20% tariffs Trump says he wants to apply to all countries, including allies.
Sticker shock had painful consequences for Democrats in recent years, and the same may apply for Republicans once in power, especially if Americans simultaneously lose access to low-cost goods through Chinese apps such as Temu and Shein.
Another big question: How much leverage do business holdings in China among Trump allies give Beijing? Trump himself has long-standing interests in the country; key ally and real estate developer Steve Wynn has invested heavily in Macao’s casinos.
However, the most important figure will be the man whom Trump watched the election results with at Mar-a-Lago: Elon Musk, whose success with manufacturing Teslas in China is tied to favourable policies from Beijing. Musk has walked the Chinese Communist Party (CCP) line on issues such as Taiwan and Xinjiang and described himself as “kind of pro-China.”
Trump has repeatedly shown that he can be persuaded when it comes to Chinese business interests if spoken to directly. As president, he reversed positions on Chinese telecommunications giant ZTE after phone calls with Chinese political leadership in 2018 and on Huawei after meeting with Chinese President Xi Jinping at the G-20 summit in 2019.
After advocating for banning social media app TikTok—and failing to do so in 2020—Trump made U-turn this year after meeting with megadonor and TikTok investor Jeff Yass. As with the first Trump administration, policy may depend on whom the president talked to last.
In some ways, the most abstract question about Trump’s future China policy is the biggest one: Is the United States facing down China out of ideological principle, or is it doing so out of a need for geopolitical primacy? That makes a difference in the nature of the opposition. Grand bargains are possible if Washington sees Beijing as a fellow player on the board but not if it conceives of the CCP as abhorrent.
These differences in approach would significantly affect US positions on Taiwan. Trump strategists such as Elbridge Colby have criticised Ukraine as a distraction from the Asia-Pacific while also saying that Taiwan isn’t doing enough to defend itself. Trump has blamed Taipei for being a security freeloader and implied that he might not defend the island.
