As U.S. President-elect Donald Trump prepares to return to the White House, global observers watch with a mix of nervousness and caution. Conversations with Chinese academics, economists, and policy insiders reveal a far more nuanced outlook as Beijing dissects the implications of a second Trump presidency. Trump’s 2016 victory caught Beijing off guard, triggering a scramble to recalibrate. But four years of navigating tariffs, tech restrictions, and trade tensions have given Chinese President Xi Jinping and his advisors a deeper understanding of the U.S. president’s playbook.
For China, Trump’s return might introduce fresh risks and some limited yet meaningful opportunities within an increasingly complex geopolitical landscape. Lessons from Trump’s first term offer some insight, but the world has changed significantly: China’s economy has softened, the COVID-19 pandemic has left a lasting mark, and the Russia-Ukraine conflict has reshaped alliances. Even Trump’s own cost-benefit calculus has evolved, and his policies now reflect the unique dynamics of a second-term presidency. As one advisor put it, quoting an ancient adage Xi himself once cited, “The wise adapt to the times, and the astute respond to circumstance.”
Beijing’s high-stakes strategy for navigating a second Trump administration involves, in the words of national security heavyweight Donald Rumsfeld, both the known and the unknown in different quantities. Up top is the most familiar—the “known knowns,” and chief among these is tariffs.
Unlike in 2016, Beijing now faces Trump’s return with a sharper sense of what to expect, thanks to his prior policies. Chief among anticipated challenges are Trump’s intensified “reshoring” agenda and potential tariffs—such as 10-20% on all imports and an additional 60-100% on Chinese imports. These would pose direct threats to China’s export-driven economy at a time when the country is still struggling with a slow recovery, real-estate instability, and weakened consumer demand.
Chinese experts foresee a hardline cabinet in a second Trump term, with figures like trade hawk Robert Lighthizer indicating a more protectionist, confrontational approach. Unlike Trump’s first administration, where voices like Steve Mnuchin occasionally tempered his policies, a unified hawkish team would likely leave little room for moderation. Yet Beijing has been preparing—even if not always successfully—its “dual circulation” strategy aims to boost domestic consumption and curb export reliance, but results have stalled: Domestic demand lags, and export levels remain steady. This strategic pivot is evident in a surge of Chinese investment in Southeast Asia, as Beijing seeks to diversify its supply chains and shield its economy from trade shocks.
To reinforce its position, Beijing has ramped up countermeasures against U.S. companies, shifting from firing warning shots to dealing concrete blows. Skydio, the largest U.S. drone manufacturer, faces critical supply chain disruptions after China sanctioned it over sales to Taiwan’s National Fire Agency, forcing the company to ration batteries. PVH Corp., the parent company of Calvin Klein and Tommy Hilfiger, now risks placement on China’s “unreliable entity list” for allegedly boycotting Xinjiang cotton, jeopardizing growth in a key market. Intel is also under scrutiny as the Cybersecurity Association of China pushes for an investigation into alleged security flaws, threatening Intel’s hold in a market that accounts for nearly a quarter of its revenue. These sanctions and probes reveal a bolder stance, showing that Beijing’s arsenal for retaliation is far stronger than it was during Trump’s first term.
Chinese experts also see potential blowback for the U.S. economy. A 60% tariff could push U.S. inflation upward, potentially forcing the Federal Reserve toward further rate hikes. Within Chinese policy circles, some view this inflationary risk as a possible check on Trump’s ambitions, noting that rising borrowing costs and asset volatility could dampen his support base for aggressive tariffs.
Beyond tariffs, Beijing is keenly aware of the limitations faced by alternative manufacturing hubs in Southeast Asia and Latin America. Regional bottlenecks—such as labor shortages, infrastructure challenges, and resource constraints—may prevent these regions from fully absorbing production shifts away from China. Ironically, these limitations could exacerbate U.S. inflation if Trump’s tariffs disrupt established supply chains without viable alternatives.
Trump’s anti-globalization stance is familiar, but the ideological shifts it ignites fall into what strategists call “unknown knowns”—factors that are understood but whose full impact remain uncertain. For Beijing, Trump’s isolationist rhetoric resonates with a rising tide of populism across Europe and parts of Asia, such as Italy, Hungary, and the Philippines, creating ideological undercurrents that both challenge and complicate China’s global aspirations.
Some nationalist voices in China view Trump’s “America First” approach as an opportunity. The logic is simple: If the United States pulls back from global frameworks or retreats from alliances like NATO, other nations may look to China as an alternative. But Beijing’s seasoned policy experts approach this notion with sober realism. While China recognizes the potential for Western alliances to fragment, it also understands that a wholesale “pivot” toward Beijing is unlikely.
European leaders may be frustrated with Trump’s isolationism, but they remain wary of China’s growing influence—especially given Beijing’s reluctance to condemn Russia’s actions in Ukraine. This perceived tacit support for Russia has deepened European skepticism, fueling doubts about whether China’s expanding reach aligns with Europe’s strategic interests.
Beijing’s advisors are also attuned to the fact that the same populist forces driving Trump’s comeback are gaining ground in Europe. Economic strains have spurred protectionism. This sentiment has tangible economic implications: Calls for tariffs on Chinese electric vehicles and other trade protections, particularly in high-value sectors, reflect Europe’s intensifying desire to shield its own industries.
For Beijing, the ideological dimensions of a second Trump term present new complications. While the United States retreating from its traditional global role could create openings, Europe is unlikely to align more closely with China. China’s strategy is to avoid positioning itself as a direct alternative to Trump’s America. Instead, Beijing is casting itself as a pragmatic, stable partner amid the uncertainties triggered by Trump’s disruptions.
Xi’s administration has underscored this practical stance to emerging economies across Africa, Latin America, Southeast Asia, and parts of Europe, promoting investment incentives, visa-free entry, and a revitalized Belt and Road Initiative focused on green and future-industry infrastructure. Beijing’s aim is to strengthen its reputation as a dependable economic partner for countries seeking growth and stability, without appearing to exploit the ideological rifts Trump’s isolationism has exposed across the West.
Xi is accelerating China’s push for self-reliance, especially in technology—a strategy captured in a phrase popular among Chinese advisors: “以不变应万变” (“respond to ever-changing circumstances with a steady core”). The drive toward self-sufficiency isn’t new; “Made in China 2025” set the stage. But recent directives from the Third Plenum and Xi’s call to foster “new productive quality forces,” a frequently repeated Xi-ism have pushed this ambition further, centering on breakthroughs in next-generation technologies—artificial intelligence, robotics, and semiconductors. This vision aims not only to reduce dependency on Western technology but to assert China’s dominance in frontier industries, with an eye to leading the fourth industrial revolution. For Xi, this is more than economic strategy; it is the fundamental answer to China’s domestic pressures and the ultimate trump card in its rivalry with the United States.
This quest for self-sufficiency also extends to forging stronger economic ties with the global south. Xi’s aim goes beyond building alternative trade networks to Western influence; he envisions a sanction-proof supply chain and financial network—a new global market immune to Western pressures that can fuel China’s ambitions independently.
Then there’s the “known unknowns”—the predictably unpredictable, something very much at the forefront with Trump. A defining feature of Trump’s political style is his highly transactional approach, adding a layer of unpredictability to what might otherwise be straightforward policies. Beijing has observed this pragmatism up close, recognizing that Trump’s business instincts often outweigh ideological commitments, occasionally opening doors for negotiation.
When the United States imposed sanctions on Chinese telecom giant ZTE, for example, Xi personally spoke with Trump, leading to a reversal of the sanctions. For Beijing, this underscored that Trump’s flexibility could be influenced by high-profile gestures that he perceives as personal acknowledgments—a dynamic Beijing sees as potentially useful.
Beijing also understands Trump’s showbiz background and his strong emphasis on image and ego. In 2017, Xi hosted Trump and his family with an unprecedented reception at the Forbidden City, a site traditionally reserved for China’s emperors, infusing the event with a level of grandeur rarely extended to foreign leaders. This carefully curated spectacle played to Trump’s appreciation for high-profile events and deepened his positive impression of Xi. This “personalized diplomacy” showcased Beijing’s understanding of Trump’s sensibilities and laid a foundation for a cooperative rapport between the two leaders.
With this in mind, Chinese advisors are prepared to pursue similar transactional openings in a second Trump term. Behind the scenes, Beijing is nurturing ties with influential American business figures who could serve as informal intermediaries to Trump’s inner circle. Elon Musk, for instance—whose Tesla operations are deeply tied to China’s market—may emerge as a potential bridge between U.S. business interests and Chinese policymakers.
Some advisors are also advocating for figures like former ambassador Cui Tiankai, who has previously established a rapport with Trump’s family, particularly his son-in-law Jared Kushner and daughter Ivanka Trump. Cui’s connections could offer Beijing a valuable “track 1.5” channel for backdoor diplomacy, adding an extra layer of access and influence.
Still, Beijing is cautious about relying too heavily on Trump’s transactional tendencies. Recent remarks suggesting Taiwan should pay more for U.S. protection have sparked mixed reactions in China. Some view it as an opening to ease U.S. support for Taiwan, while others see it as a mere bargaining chip Trump could discard at any time. For Beijing, these mixed signals create a delicate balancing act: While it may aim to leverage Trump’s pragmatism, it knows any perceived concession could be revoked at a moment’s notice. In navigating Trump’s dealmaking style, China proceeds with cautious optimism, fully aware of his unpredictability.
Beyond Trump’s familiar transactional style, Beijing is on high alert for wild cards that could upend its plans. The nature of unknown unknowns is the impossibility to know what you’re missing, but there are some drastic, but not predictable, changes that could shake up U.S.-China relations. A sudden shift in U.S.-Russia relations, for example, could have major implications for Beijing. A closer alliance between Trump and Russian President Vladimir Putin might strain China’s relationship with Moscow, potentially isolating Beijing within the global power structure. Likewise, unexpected maneuvers by Trump in the Indo-Pacific could unsettle China’s carefully managed ties with regional powers like Japan, South Korea, and India.
A critical constraint on China’s ambitions lies in Washington’s tightening grip on technology exports, an escalating tactic that has introduced more unknowns into Beijing’s strategic calculus. While the general U.S. intent is clear—limiting China’s access to advanced technologies—the extent to which Washington will go remains uncertain. Recent export controls target crucial fields like semiconductors and AI, threatening to curb China’s technological progress at a pivotal time.
Chinese analysts interpret these moves not just as competitive hurdles but as a calculated strategy to stall China’s ascent in strategic areas, particularly AI and quantum computing, which are critical to both economic growth and military strength. As Beijing watches for new layers of restriction, the scale and impact of U.S. actions remain fluid, injecting a destabilizing uncertainty into China’s tech trajectory. To brace for these unknowns, Xi’s broader vision is to shape an economy resilient enough to withstand unpredictable global shifts—whether driven by Trump 2.0 or other forces—without risking economic upheaval or, worse, destabilizing Chinse Communist Party (CCP) control. Trump’s return may add urgency, but Beijing views him as more a symptom of a chaotic world order than its cause, which only reinforces Xi’s long-held belief in fortifying China’s self-reliance. For Xi, bolstering resilience across technology, supply chains, and education is about safeguarding China from external shocks and cementing the stability essential to the CCP’S rule.
In truth, Xi’s groundwork for managing “Trump-style” disruptions began long before Trump’s first term. China’s approach has always hinged on minimizing vulnerabilities to external pressures, a direction deeply embedded in Xi’s worldview. Yet this pursuit of resilience walks a fine line. Strengthening defenses could deepen China’s isolation—a shield that may paradoxically create new weaknesses. Gains in domestic supply chains and tech independence mark real progress, but much of Xi’s vision remains aspirational. Beijing is racing to secure these defenses, understanding that, in a world increasingly defined by upheaval, China’s strength will be measured less by its rapid growth and more by its capacity to endure through turbulence.
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