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Beijing in President Trump’s policy shop

Jan 22, 2025 08:07 PM IST

It is no secret that Trump loves strong men and the manner in which China is handling the US is obviously garnering his attention

Reports suggest that there could be surprises hidden in President Trump’s China policy. Add up the following developments: The invite to President Xi Jinping to attend the inaugural, the phone call on the eve of beginning his second term, and the Wall Street Journal report citing officials to say that Trump is keen to travel to China within the first 100 days of his second presidency.

FILE - Traditional Russian wooden dolls called Matryoshka depicting China's President Xi Jinping, U.S. President-elect Donald Trump and Russian President Vladimir Putin are displayed for sale at a souvenir shop in St. Petersburg, Russia on Nov. 21, 2024. (AP Photo/Dmitri Lovetsky, File) (AP) PREMIUM
FILE - Traditional Russian wooden dolls called Matryoshka depicting China's President Xi Jinping, U.S. President-elect Donald Trump and Russian President Vladimir Putin are displayed for sale at a souvenir shop in St. Petersburg, Russia on Nov. 21, 2024. (AP Photo/Dmitri Lovetsky, File) (AP)

Contrast these with earlier reports of Trump criticising China. In 2012, he accused Beijing of inventing the concept of global warming to make United States (US) manufacturing non-competitive. In 2020, he put tariffs on Chinese imports saying that for decades they have ripped off the US “like no one has ever done before”. When Covid struck, he called it the “China virus” and blamed the country for unleashing “this plague onto the world”.

However, in recent years, there has been a change of tone. In 2023, he told a Fox News town hall that President Xi was “a brilliant guy” who runs 1.4 billion people “with an iron fist. Smart, brilliant, everything perfect”. In October 2024, the Wall Street Journal cited him as saying, “I had a very strong relationship with him (Xi)”, adding, “he was actually a really good, I don’t want to say friend — I don’t want to act foolish, [and say] ‘he was my friend’ — but I got along with him great.”

Note that in the first 200 or so orders he issued on Day One of his presidency, Trump went light on China except on that false claim relating to Panama. But the next day, on Tuesday, he announced a 10 per cent tariff on Chinese imports because of China’s role in sending fentanyl to Canada and Mexico from where it entered the US.

Trump has spoken of China as being the target of anywhere between 10 and 60% tariffs. Beijing has been preparing for this trade war and unlike the past one, it has signalled it will be more aggressive in exploiting US supply-chain vulnerabilities such as those in the area of drones and the market access of US companies like Intel, Micron and Nvidia. Many American companies like Tesla, Apple, Starbucks, and McDonalds have big stakes in the Chinese market.

It is no secret that Trump loves strong men and the manner in which China is handling the US is obviously garnering his attention and the US-China situation is seemingly inducing some caution with regard to his plans of imposing crippling tariffs on the country. Recall that despite the tough rhetoric, Trump had signed a Phase I trade deal with China in January 2020. Under the deal, which did not work out because of Covid and Trump’s defeat in the presidential elections, China committed to buy an additional $200 billion worth of US products, promised not to manipulate currency, protect Intellectual Property Rights and stop forcing foreign companies to transfer technology.

Trade figures show that China is the third largest trade partner of the US and exported $524 billion worth of goods and services in 2024 which was five per cent more than in 2023. Its trade surplus was $361 billion. China supplies 75% of toys and sports equipment for the US, 25% of its electronics, electrical machinery textiles and clothes and 20% of its plastics and rubber. In addition, exports of high-end machinery, electric vehicles and 3D printers have increased significantly in recent years. Additional tariffs threatened by Trump would lead to huge inflation in the US because, as in the past, the retailers will pass the price rises on to the consumer.

With its economic problems, Beijing has an incentive to engage the US. A Trump-Xi summit could jump-start the process. China could commit to providing better access to its financial markets to US companies and ease regulations on foreign ownership and investment in financial and tech sectors. It could enhance intellectual property protections, and boost agricultural purchases, a key element of the phase I deal, offer favourable conditions for technology transfer to ensure the protection of US technology, open up sectors like automotive manufacturing or renewable energy to US investment and stop the exports of fentanyl precursors.

The players in a potential US-China policy of the Trump Administration will be people like secretary of state Marco Rubio, treasury secretary Scott Bessent, and national security advisor (NSA) Mike Waltz and veteran trade lawyer Jamieson Greer as the US trade representative. They are all known China hawks.

In his recent confirmation hearing, Rubio warned against the growing US reliance on China and spoke about the need to confront China by building domestic US industrial capacity. Bessent called China the most imbalanced economy in the world which was currently in a recession, if not a depression. Significantly, he called for a move to hold Beijing up to the Phase I trade deal of 2020. As for NSA Waltz, a co-chair of the India caucus in the US House of Representatives, he has made it clear he will build on the Biden Administration’s Indo-Pacific policy and ensure that the $20 billion backlog of US weapons for Taiwan is delivered.

But let us be clear. Trump 2.0 will not be a replay of Trump 1.0. In his first term, Trump reached out to experts and generals to boost the profile of his administration. This time around, the key consideration in his cabinet choices has been loyalty. Those selected have no doubt that their policy will be what Trump wants. As noted, Trump has been strong on tariffs, but he also has the past of the Phase I deal. On Taiwan, while he has been all for Taipei paying for its defence requirements, he refused to answer questions in his campaign about whether the US would defend Taiwan in the event of a contingency.

Trump’s direct approaches to Xi and his stated desire to make an early visit to China suggest that when it comes to China, he will be leading from the front. The shape that policy will take will be clearer in the coming days.

Manoj Joshi is a distinguished fellow, Observer Research Foundation, New Delhi.The views expressed are personal

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