US President Joe Biden and Chinese President Xi Jinping (習近平) managed to keep US-China tensions contained last year. However, when US president-elect Donald Trump returns to the White House this month, he would end this fragile stability, drive an unmanaged decoupling of the world’s most important geopolitical relationship and increase the risk of global economic disruption and crisis.
Trump would begin his second term by announcing fresh tariffs on Chinese goods, with the goal of forcing a new economic agreement on China. Although the new tariffs would not reach the across-the-board 60 percent rate that he threatened during the campaign, the top rate on all Chinese imports is likely to double to about 25 percent by the end of this year. In the meantime, China’s leaders would respond more forcefully and offer fewer concessions than they did during Trump’s first term, despite the Chinese economy’s continuing weakness.
After all, Chinese leaders fear that a conciliatory approach would be perceived as accepting national humiliation, which would further stoke already rising public anger within China. If a more constructive approach toward the US last year only brought the return of “Tariff Man,” why stick to that path? Trump’s threats are merely the latest aggressive gesture by the US, confirming Chinese suspicions that US policymakers are intent on containing China’s emergence as a great power.
Illustration: Yusha
The most sensitive of all subjects in US-Chinese relations is technology policy. China objects to what it sees as US attempts to freeze its technological development and slow its economic rise. Trump’s security team would add more Chinese companies to the US Department of Commerce’s “Entity List,” making it more difficult for them to gain access to US technology, and it would expand export controls into more economic sectors.
For example, Trump would also follow the Biden administration’s lead on restricting the export of advanced computer chips to Chinese tech firms. China has already shown a willingness to retaliate against such measures by restricting its exports of critical minerals and the technology used to process them. These minerals are vital to the production of a broad range of modern technologies, including electric-vehicle batteries, computers and consumer electronics, and many products that the US considers essential for its own national security.
Although Taiwan is not at risk of a Chinese invasion this year, disputes over the island would almost certainly make Sino-US relations more toxic this year. Trump himself appears uninterested in Taiwan. However, the more hawkish members of his administration, including Marco Rubio, his nominee for secretary of state, and incoming US national security adviser Mike Waltz, would push not only for closer US-Taiwan ties, but also for a more explicit US guarantee of Taiwan’s security. That is a bright red line for China.
For now, China’s leaders believe that their pressure tactics have kept President William Lai (賴清德) in check, and they are probably right. With Taiwan’s economy remaining strong, Lai does not need to provoke China to bolster his public popularity.
However, if China perceives that Taiwan has made substantial moves toward greater de facto independence, or if the US crosses any of China’s other red lines (for example, if Rubio visits Taiwan or US naval vessels anchor in a Taiwanese port), China could decide to escalate militarily. This could take the form of a naval blockade or a seizure of one of Taiwan’s outer islands. Moreover, such risks would only grow as Taiwan’s 2028 election approaches, and as China ramps up pressure to prevent another Lai victory.
Neither China nor the US wants a crisis this year because Xi and Trump hope to focus on domestic policy. Xi faces serious economic challenges, growing concerns about social stability and a military leadership in disarray. Trump wants to avoid any problem that might sink the US stock market and hopes to cut deals that boost confidence in his leadership. With a unified government and consolidated control of his party, Trump is in a better position than Biden ever was to ensure that the US speaks with a single voice.
The problem is that there is no foundation for an agreement that strengthens broader US-China relations. Xi’s government could offer to buy more of the US’s agricultural products and energy exports, and it could make life easier for US companies that want to do business in China. In addition, Xi can greenlight more Chinese investment in the US and even play a more actively supportive role in getting to a ceasefire in Ukraine.
Such constructive gestures would not satisfy Trump and the hawks in his administration, who believe that China’s rise is bad for the US. Trump’s determination to tighten the pressure on China and its stumbling economy would push China’s leaders in the opposite direction.
At the same time, two wildcards could affect US-China ties this year: Trump himself and his new favorite adviser, Elon Musk. Trump could try to build a better personal relationship with Xi, and Musk’s many commercial interests in China could make him a useful go-between. However, the forces pushing the US and China apart are much stronger than either of these possibilities allow.
The effects of the coming breakdown in relations would be felt worldwide. Most countries have no interest in a new cold war, making one unlikely in the near term. However, key US allies and trade partners such as Japan, South Korea, Mexico and the EU might increasingly be forced to choose sides — at least in security-related areas — at a significant cost to their economies.
Even if neither China nor the US wants a costly confrontation this year, the early signals from both sides suggest that an escalating conflict is becoming harder to avoid.
Ian Bremmer, founder and president of Eurasia Group and GZERO Media, is a member of the executive committee of the UN High-level Advisory Body on Artificial Intelligence.
Copyright: Project Syndicate
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