Tariffs may be just the start of U.S.-China disputes during a second Trump term

WASHINGTON After President-elect Donald Trump is sworn in next year, U.S.-China relations are poised to become one of the biggest foreign policy challenges for the new administration.

In recent years, relations between the world's two dominant superpowers have been strained, with lawmakers across the political spectrum taking a tougher stance toward Beijing. Where those relations take today, experts say, will depend on how much Trump keeps his promise to impose high tariffs on China, as well as how strongly he is influenced by advisers who think the United States should confront China on more than just trade.

Prices 2.0

Trump has already rattled global markets this week by announcing he would begin his term with 10% tariffs on Chinese goods, in addition to higher tariffs on goods from Canada and Mexico. During the campaign, he proposed imposing tariffs of at least 60% on China, which some economists say could lead to higher prices for American consumers.

High 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.

The tariffs could also spark a new trade war with China, similar to Trump's first term when Washington and Beijing imposed a series of retaliatory tariffs on each other, experts say.

What would happen is the United States would impose tariffs and then China would impose tariffs in a number of areas that are really important to Republican voters, Kurlantzick said.

On Tuesday, Trump said his nominee for U.S. trade representative was Jamieson Greer, who helped implement Chinese tariffs during Trump's first term as chief of staff to Robert Lighthizer, the U.S. trade representative. trade at the time.

Analysts have warned that the consequences of the tariffs could extend beyond the economy, potentially affecting national security and health concerns.

High tariffs could make Beijing reluctant to cooperate with the United States on shared issues, such as cracking down on fentanyl precursor chemicals, said Michael O'Hanlon, a senior fellow at the Brookings Institution.

If the Chinese face 60% tariffs across the board, the likelihood that they will want to cooperate in other areas of the relationship drops significantly, O'Hanlon said.

In response 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 willing to work with the new Trump administration and hoped for a stable and constructive relationship. But in a message apparently to Trump, he highlighted China's four red lines in its relations with the United States: Taiwan, promotion of democracy and human rights, efforts to undermine the Party Chinese communist in power and restricting the development of China.

Asked about the future of U.S.-China relations, Liu pointed to comments this month from Xie Feng, China's ambassador to the United States, who said China did not have intending to overtake or displace the United States.

We hope that the US side will also have no intention of containing or suppressing China, Xie said, according to the embassy minutes.

The first six months of next year will be crucial in setting the tone for 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 close relationship with the Chinese leader.

Trump is no longer dealing with the same China he was four years ago when he left office. Although Xi, who began a historic third term last year, has further consolidated his power, he will focus on tackling an economic slowdown that will only worsen with international instability.

At the same time, China has also made significant technological advances in key sectors such as electric vehicles and diversified its trade relationships to become less dependent on the United States, its main export market.

Chinese officials appear willing to work with the Trump administration to find a way out before things go south, Scott Kennedy, a China specialist at the Center for Strategic and International Studies, a Washington-based think tank, said during from an interview with NBC News last. week during a visit to the Chinese capital, Beijing.

But if Trump imposes extremely high tariffs or takes other measures, Beijing could also make things difficult for the United States, he said.

That could mean retaliatory tariffs on U.S. agricultural and other products, investigations into U.S. companies operating in China, restrictions on rare earths and other key Chinese exports, or a weakening of the yuan to hurt the American trade.

New White House press secretary Karoline Leavitt said Trump was elected “to stand up to China, put tariffs on Chinese goods and make America stronger. He will do it.”

A hawkish Trump team

It is unclear to what extent Trump will be influenced by his advisers. Many of his picks so far have been vocal critics of China, including Sen. Marco Rubio, Republican of Florida, for secretary of state; Rep. Mike Waltz, R-Fla., for national security adviser; and Pete Hegseth for Secretary of Defense.

Rubio, who has championed legislation allowing sanctions against officials accused of rights abuses in the Chinese territory of Hong Kong and China's Xinjiang region, is himself sanctioned by the Chinese governmentwhich would be a first for a secretary of state if 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, said Yaqiu Wang, research director for the China, Hong Kong and Taiwan at FreedomHouse, a Washington study. think tank, wrote in Le Diplomate Tuesday.

Waltz, who does not need Senate confirmation, called on the United States to boycott the 2022 Winter Olympics in Beijing, citing human rights abuses, while Hegseth, a Fox News host, said China aspires to world domination.

Rubio and Waltz have a very realistic and sober view of the challenges ahead regarding China, and on that front I think they will 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 on the ban on the Chinese app TikTok, which Trump supported before reversing his position this year.

They could also diverge on Taiwan, the self-governing democracy that Beijing claims as its territory. Trump angered Taiwanese officials by saying the island was not paying enough for its defense and accusing it of stealing business from the United States with its semiconductor industry.

Experts say Trump may be more transactional in his dealings 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 these people, they just want to promote decoupling. They simply want to contain China and defeat China, and even provoke conflict with China.

Chinese officials looking for friendlier intermediaries could turn to others in Trump's orbit, such as Tesla owner Elon Musk, who has extensive business interests in China and often meets with top Chinese leaders .

There's a lot of hope here that he can be a bridge and help keep things calm, Kennedy said, although I don't know if that's more wishful thinking than clear analysis.

Megan Lebowitz reported from Washington, Jennifer Jett from Hong Kong and Janis Mackey Frayer from Beijing.