Trump’s Second Trade War Will Put US–China Relations to the Test
Alex
2025-01-21In 2024, key US political events included an assassination attempt on President-elect Trump, Biden's campaign failure, and a Supreme Court ruling exempting presidential actions from prosecution. As Trump's influence rises in 2025, tensions in US–China relations will escalate, with a potential second trade war depending on both Trump's advisers and China's response.
The past twelve months compressed a decade’s worth of unprecedented events into a single year. July 2024 alone saw an assassination attempt against US president-elect Donald Trump and the collapse of US President Joe Biden’s presidential campaign, all but overshadowing another development with an even more enduring impact on US politics — the US Supreme Court’s sweeping ruling that US presidents’ official actions are beyond the reach of prosecution.
As we begin 2025, the intensifying presence of Donald Trump as he prepares to assume the presidency is once again the overwhelming force animating the United States’ body politic. Trump has decisively moved from anomaly to primacy in US political life as the vox populi rewarded him and the Republican Party with not only the presidency, but a majority in Congress as well.
Trump and his team likely know that the clock is already ticking on their fragile grip on power in the US House of Representatives. In their second turn at the wheel, they are likely to move with greater alacrity and dexterity in implementing Trump’s agenda. As a result, Trump’s impending presidency may be a rare instance in which the sequel proves even more gripping than the original.
Trump’s return to power is best understood as a symptom of the long hangover following the conspicuous failures of former US president George W Bush’s administration at the start of this century. Just as the Vietnam War shattered the legitimacy of the Democratic Party’s elite a generation earlier, the Iraq War, the Global Financial Crisis and the failure of two successive centrist Republicans to secure the presidency immolated the Republican establishment’s credibility with its voter base.
In his first term, Trump still had to contend with traditional Republicans in the Congressional leadership, but the majority of Republican resistance to Trump has withered in the interim.
Trump personally spearheaded the administration’s approach to key regional security issues in East Asia in his first term, pursuing a diplomatic overture to North Korean leader Kim Jong-un over the qualms of his advisors and cycling through a parade of senior officials to negotiate an end to the trade war as his own inclinations shifted. But in his second term, the terms of the debate over China policy have shifted such that Trump will no longer personally define the outer limits of a hardline China policy. China hawks in his own party have carried the President’s logic a step further than he has. Some Republicans are calling for the revocation of China’s most-favoured-nation status and some hawks in Trump’s administration may see decoupling from China as the ultimate objective of his coming trade war. Trump has toggled between threats and entreaties toward China during the transition, but his comments suggest that he wants a deal with China rather than a divorce.
If the first trade war is at all instructive, the scope, scale and intensity of the second trade war will depend primarily on the dynamics between a small group of advisers in Trump’s court. Traditional economic considerations are likely to intrude only in the guise of the stock market, the fluctuations of which Trump sees as a real-time measure of his success — with downturns inhibiting his appetite for prolonging the tit-for-tat exchanges with Beijing.
The course of the second trade war in will depend less on Trump’s opening gambit and more on how Beijing responds. The trajectory will also be determined by whether or not Trump tries to expand the scope of any negotiations beyond trade to encompass security issues in East Asia as well as the impact of conflicts in Ukraine and the Middle East.
Beijing has spent much of 2024 attempting to mollify Washington with gestures such as releasing detained US citizens and resuming counternarcotics cooperation with the United States — even as both sides continue to compete. Chinese President Xi Jinping’s relative forbearance may extend into the opening phases of a trade war, especially if Xi smells an opportunity for a so-called ‘grand bargain’.
Beijing’s interest in a potential grand bargain with Trump could come at a steep price. Indeed, the only outcome of a second trade war that might be more inimical to the region’s security than a downward spiral in US–China relations would be a ‘G2’ deal that trades away US security commitments in exchange for promises from China that are unlikely to materialise.
Beijing will almost certainly use the prospect of a grand bargain to advance its goal of undermining US alliances and commitments across the region. This will undo the Biden administration’s work to fortify and stitch together US partners to cope with the China challenge in the coming decade.
Beijing’s recalcitrance about helping the United States resolve other burning international problems — notably the war in Ukraine and the conflagration in the Middle East — may be the most likely way Trump is disabused of the notion that China is the answer to his problems, rather than the United States’ chief challenge.
Source：EASTASIAFORUM
