WASHINGTON — After President-elect Donald Trump takes the oath of office next year, U.S.-China relations are poised to be one of the greatest foreign policy challenges for the new administration.
In recent years, the relationship between the world’s two dominant superpowers has been fraught, with lawmakers across the political spectrum adopting a tougher stance on Beijing. What direction that relationship takes now, experts say, will depend on the extent to which Trump follows through on his vow to slap China with steep tariffs — as well as how strongly he is influenced by advisers who think the U.S. should confront China on far more than trade.
Tariffs 2.0
Trump already rattled global markets this week by saying he would begin his term in office with a 10% tariff on Chinese goods, in addition to higher tariffs on goods from Canada and Mexico. During the campaign, he floated imposing tariffs of at least 60% on China, which some economists have warned could lead to higher prices for American consumers.
Steep tariffs could “undoubtedly terrify investors and have a massive impact on the stock market,” said Josh Kurlantzick, a senior fellow at the Council on Foreign Relations.
Tariffs may also set off another “trade war” with China, mirroring Trump’s first term when Washington and Beijing imposed a series of retaliatory tariffs on each other, experts said.
“What would happen is, the U.S. would put on tariffs, and then China would put on tariffs in a bunch of places really important to Republican constituencies,” Kurlantzick said.
On Tuesday, Trump said his nominee for U.S. trade representative was Jamieson Greer, who helped implement China tariffs during Trump’s first term as chief of staff to Robert Lighthizer, the U.S. trade representative at the time.
Analysts warned that the consequences of tariffs could go beyond the economy, potentially affecting national security and health issues.
Steep tariffs could make Beijing wary about cooperating with the U.S. on joint issues, such as cracking down on precursor chemicals for fentanyl, said Michael O’Hanlon, a senior fellow at the Brookings Institution.
“If the Chinese are suffering 60% tariffs across the board, the likelihood of their wanting to cooperate in other realms of the relationship goes down dramatically,” O’Hanlon said.
Responding to Trump’s tariff announcement on Monday, Chinese Embassy spokesperson Liu Pengyu said that “no one will win a trade war.”
Chinese President Xi Jinping told President Joe Biden this month that he was ready to work with the incoming Trump administration and that he hopes for a stable and constructive relationship. But in a seeming message to Trump, he emphasized China’s four “red lines” in its U.S. relations: Taiwan, the promotion of democracy and human rights, efforts to undermine the ruling Chinese Communist Party, and constraining China’s development.
Asked for comment on the future of U.S.-China relations, Liu pointed to comments this month by Xie Feng, the Chinese ambassador to the U.S., who said China “has no plan to overtake or displace the United States.”
“We hope the U.S. side will also have no intention to contain or suppress China,” Xie said, according to the embassy’s transcript.
The first six months of next year will be crucial for setting the tone in U.S.-China relations, said Wu Xinbo, director of the Center for American Studies at Fudan University in Shanghai. He said Trump and Xi should try to meet as soon as possible, citing what Trump describes as his strong relationship with the Chinese leader.
Trump is not dealing with the same China as when he left office four years ago. Though Xi, who began a historic third term in office last year, has further consolidated power, his focus will be on addressing an economic slowdown that would only get worse with international instability.
At the same time, however, China has also made significant technological advances in key sectors such as electric vehicles and has diversified its trading relationships to become less reliant on the U.S., its top export market.
Chinese officials seem prepared to work with the Trump administration to “find an off-ramp before things go sour,” Scott Kennedy, a China specialist at the Center for Strategic and International Studies, a Washington-based think tank, told NBC News in an interview last week during a visit to the Chinese capital, Beijing.
But if Trump does impose extremely high tariffs or take other measures, Beijing could “make things challenging for the U.S. as well,” he said.
That could mean retaliatory tariffs on agricultural and other U.S. products, investigations into American companies operating in China, restrictions on rare earths and other critical Chinese exports, or weakening the yuan to undermine U.S. trade.
Incoming White House press secretary Karoline Leavitt said that Trump was elected "to stand up to China, enforce tariffs on Chinese goods, and Make America Strong Again. He will deliver."
A hawkish Trump team
It’s unclear just how much Trump will be influenced by his advisers. Many of his picks so far are staunch critics of China, including Sen. Marco Rubio, R-Fla., for secretary of state; Rep. Mike Waltz, R-Fla., for national security adviser; and Pete Hegseth for secretary of defense.
Rubio, who championed legislation authorizing sanctions on officials accused of rights abuses in the Chinese territory of Hong Kong and the Chinese region of Xinjiang, is himself sanctioned by the Chinese government, which would be a first for a secretary of state if he is confirmed.
His selection by Trump “has instilled some confidence in pro-democracy communities in China and the diaspora, as Rubio is known for his strong objections to Beijing’s human rights abuses,” Yaqiu Wang, the research director for China, Hong Kong and Taiwan at Freedom House, a Washington think tank, wrote in The Diplomat on Tuesday.
Waltz, who does not need to be confirmed by the Senate, had called on the U.S. to boycott the 2022 Winter Olympics in Beijing, citing human rights abuses, while Hegseth, a Fox News host, has said China aspires to global domination.
Rubio and Waltz “have a very realistic and sober notion of the challenges ahead with respect to China, and on that front, I think they’ll serve President Trump very well,” said Dan Blumenthal, a senior fellow at the American Enterprise Institute, a conservative think tank.
But Trump and his aides also have major differences in their approach to China, including whether to ban the Chinese-owned app TikTok, which Trump supported before reversing his position this year.
They also may diverge on Taiwan, the self-ruling democracy that Beijing claims as its territory. Trump has unnerved Taiwanese officials by saying the island doesn’t pay enough for its defense and accusing it of “stealing” business from the U.S. with its semiconductor industry.
Experts say Trump may be more transactional in how he deals with China and Taiwan than his advisers, whose approach tends to be more ideological.
Trump “still wants to get concessions from China, he wants to get benefits from China,” Wu said. “But for those people, they just want to promote decoupling. They just want to contain China and defeat China, and even to provoke conflict with China.”
Chinese officials looking for friendlier intermediaries may turn to others in Trump’s orbit such as Tesla owner Elon Musk, who has extensive business interests in China and often meets with senior Chinese leaders.
“There’s a lot of hope here that he can be a bridge and help keep things calm,” Kennedy said, though “I don’t know if that is more wishful thinking than clear analysis.”
Megan Lebowitz reported from Washington, Jennifer Jett from Hong Kong and Janis Mackey Frayer from Beijing.
