Donald Trump’s first term signaled a historic shift in U.S. policy toward China. His strategic blend of economic pressure, unpredictability, sanctions and tariffs knocked Beijing off balance. It was a turning point: Washington moved from passive acceptance of China’s revisionist ambitions to assertive opposition. The Biden administration has wisely maintained and in some cases expanded on this framework.
Mr. Trump’s second term could help America to win this strategic contest altogether.
China faces an array of challenges, especially a stagnating economy, making it vulnerable to the president-elect’s assertive tactics. If Mr. Trump can couple the blustery style of his first term with a more focused strategy and tighter discipline, the next four years are a golden opportunity to keep Beijing on the defensive and permanently transform the rivalry in America’s favor.
For China, the ideal outcome in the U.S. election would have been another four years of the Biden-Harris administration’s cautious approach. Although President Biden maintained targeted pressure on Beijing, his emphasis on détente and aversion to escalation would have afforded China’s leader, Xi Jinping, the predictability he needs to address his domestic troubles and advance China’s ambitions in critical areas such as technology, trade and the future of Taiwan.
But Mr. Trump isn’t content with merely managing the competition with Beijing. He aims to win it. His zero-sum approach and unconventional tactics — as well as an emerging cabinet of China hawks — are likely to deny Mr. Xi the breathing room he desperately needs and push the Chinese leader into a high-stakes test of wills he cannot easily control or predict.
Despite a decade of projecting outward strength, China is, in fact, a declining power, its rise having been undone by Mr. Xi’s mismanagement, heavy-handed repression and strategic blunders. The country faces crippling debt, record-high youth unemployment and a shrinking, rapidly aging population. His ideology-driven approach, which places the Chinese Communist Party at the heart of economic decision making, has eroded business confidence, spurred capital flight and led to unprecedented drops in foreign investment. China’s era of sky-high growth is giving way to a stagnation reminiscent of Japan’s so-called lost decade, a period of deflation and economic inertia from which Japan has yet to fully recover. Even Mr. Xi cautioned citizens last year to be prepared to “eat bitterness,” a Chinese phrase signaling hard times ahead.
The U.S. economy, meanwhile, is gaining momentum, and Mr. Trump — who views China’s centrally planned, manufacturing-heavy model as predatory and harmful to American workers — seems ready to aggressively leverage U.S. strength, as he did in his first term. He has proposed tariffs as high as 60 percent on Chinese imports, which, according to some estimates, could shave up to two percentage points off China’s gross domestic product.
The bluster and brinkmanship of Mr. Trump’s first term could also prove invaluable regarding Taiwan. Mr. Xi’s goal is to bring the democratically ruled island under Chinese rule, by force if necessary. Mr. Trump, however, is threatening tariffs as high as 200 percent on Chinese goods if China takes military action. The president-elect summed up the situation best when he noted last month that Mr. Xi wouldn’t dare provoke him over Taiwan because the Chinese leader knows that he’s “crazy.”
Chinese anxiety over Mr. Trump’s return is already surfacing. During the Biden administration, Beijing often struck a defiant tone, accusing the United States of encirclement and containment. But after Mr. Trump’s decisive election victory, Chinese leaders quickly struck a more conciliatory tone, calling for peaceful coexistence and a new era of cooperation.
But America must build on today’s momentum, especially in the high-stakes contest with China over critical technologies such as semiconductors, artificial intelligence, autonomous vehicles and quantum computing — the engines of tomorrow’s industrial revolution. Allowing China to seize the lead would dangerously tilt global power dynamics in its favor, undermining U.S. national security. Mr. Trump recognizes this risk and has signaled he would probably intensify tariffs, export controls and sanctions on China’s tech and manufacturing sectors that have already hindered the country’s economy and its potential for innovation. He may also champion tighter screening of U.S. investments in China’s tech sector, a strategy that has bipartisan support and could impede China’s development and deployment of advanced military capabilities.
Mr. Xi is pinning China’s economic hopes on an outdated, state-subsidized manufacturing-for-export model. But this strategy is highly vulnerable to U.S. tariffs. Mr. Xi might appeal to Mr. Trump’s deal-making instincts by offering selective concessions to blunt the impact of tariffs, but these are unlikely to sway Mr. Trump for long.
Mr. Xi has tools of his own that he can use, but nearly all of them are risky. He could shore up his economy by cutting interest rates, extending tax rebates or further subsidizing exporters. But these are short-term remedies that are likely to worsen long-term economic instability by inflating China’s staggering debt, which is currently estimated to be nearly three times the size of the country’s G.D.P. Striking back with his own tariffs could ignite a trade war that affects U.S. consumers, but Mr. Trump has shown a readiness to absorb short-term political costs for strategic gain, and polls indicate that most Americans support his tariff threats.
Mr. Xi could retaliate by restricting U.S. companies’ access to Chinese markets, but that may further unsettle foreign investors already wary of China’s economic trajectory. Curbing Chinese exports of minerals essential for high-tech manufacturing could also backfire by accelerating U.S.-led efforts to secure alternative sources. Devaluing the Chinese currency would make the country’s exports cheaper, offsetting the impact of tariffs. But it is likely to accelerate capital flight and strain relations with other trade partners.
As a last resort, Mr. Xi could escalate tensions over Taiwan or in the South China Sea, but that risks galvanizing U.S. alliances and inviting a stronger American military presence in the region.
To fully capitalize on China’s current vulnerabilities and secure lasting American advantages, the next Trump administration must recognize the historic opportunity it faces. Today’s international landscape echoes the latter stages of the Cold War, when President Ronald Reagan confronted a weakening Soviet Union and hastened its collapse by forcing Moscow to make costly resource allocation decisions that ultimately bankrupted it. This isn’t to suggest America’s goal with China should be regime change; rather, the United States should aim beyond mere coexistence. It should confidently wield the moral and economic strength of its democratic model until China’s leaders and people recognize that their system is unsustainable and embrace a freer and less hostile path.
But achieving lasting success will require more than pressuring China for pressure’s sake. It will demand a wider peace-through-strength approach that combines American domestic renewal, enhanced military spending, entrepreneurial dynamism and, critically, the alliance network that Mr. Biden revitalized across Asia and Europe. The incoming administration needs to grasp that this is a crucial piece of the puzzle in confronting China and ensure that a renewed “America First” approach focuses on fair burden sharing among allies rather than excessive tariffs on allies or questioning American commitments to mutual defense arrangements. These would only undermine deterrence and create diplomatic rifts that China would be quick to exploit.
Mr. Trump’s bold style isn’t for the fainthearted. In a time of fierce global competition, he sees balance as weakness and coexistence as capitulation. Yet if he can draw from past lessons, engage with our allies and stay disciplined, he just might be crazy enough to confront China — and win.
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