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What Trump’s Second Term Means for China

As China and the US continue their strategic rivalry, the stakes are immense for the global economy and international stability

by Robynne Tindall
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The eyes of the world are on Donald Trump as he begins his second term as President of the United States, including in China’s. The multifaceted and increasingly tense US-China relationship will be a challenge for Trump, and the next four years will undoubtedly shape the trajectory of both countries on the global stage.

From evolving trade policies to technological decoupling, this article gives a brief overview of what we know so far about what Trump 2.0 means for China.

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Whither the US-China trade war

A defining feature of Trump’s first term was the US-China trade war, characterised by tariffs on hundreds of billions of dollars in Chinese goods. While no immediate tariffs were announced in Trump’s first day in office, a trade memo directed the government to scrutinise US trading relationships and evaluate China’s compliance with the 2020 US-China Economic and Trade Agreement.

There were some signs of détente in the form of a meeting between Elon Musk and Chinese Vice President Han Zheng just before the inauguration, where Han reportedly invited US firms including Tesla to deepen investments in China and Musk reaffirmed Tesla’s commitment to expanding cooperation with China.

Nonetheless, this measured start is unlikely to extend into the long term. Trump’s approach to trade will focus on securing tangible, short-term wins for the US, often without regard for broader strategic consequences. Moreover, China is in a weaker economic position than it was during the opening salvo of the trade war, as it faces a sticky real estate crisis, rising youth unemployment and depressed consumer confidence.

The TikTok question

For an example of Trump’s strategic unpredictability in US-China relations, we need only look to his handling of the TikTok controversy. During his first term, Trump ordered a ban on the Chinese-owned app, citing national security concerns. However, on 20 January 2025, Trump signed an executive order to delay the enforcement of a law requiring TikTok owner ByteDance to sell its US operations to an American or allied buyer or face a ban for an additional 75 days. After going dark for a few hours on Sunday, an announcement on the app credited Trump as its saviour. The TikTok decision underscores Trump’s tendency to use high-profile cases as leverage for broader concessions – especially if they benefit him, as TikTok did during his campaign. China will have to navigate the risks and opportunities of this transactional policymaking.

Decoupling in technology

Despite his TikTok reprieve, technology will remain at the heart of Trump’s US-China policy.

His first term saw the blacklisting of companies such as Huawei, and restrictions on semiconductor exports – actions that disrupted China’s tech ecosystem. The Financial Times reports that further measures targeting critical technologies – such as artificial intelligence and quantum computing – are likely to curb China’s ambitions in these fields.

For China, the emphasis will shift to achieving self-reliance. The Made in China 2025 strategy, which aims to reduce dependence on foreign technology, is poised to take on even greater importance. However, Beijing faces significant hurdles, including its reliance on advanced semiconductor manufacturing equipment from US-aligned countries. While China has made progress in innovation, it remains constrained by gaps in high-end technologies, a vulnerability that Trump’s policies will continue to exploit.

Geopolitical rivalries in Asia

Trump’s “America First” agenda has historically created openings for China to expand its influence across Asia. However, his second term may see a recalibration of this strategy. Trump is likely to adopt a more assertive stance in the Indo-Pacific, leveraging alliances to counterbalance China’s growing clout.

This renewed focus aligns with Trump’s broader goal of containing Beijing’s regional ambitions, particularly in the South China Sea. Nevertheless, Trump’s transactional diplomacy could undermine the unity of these alliances. For example, his demands for increased defence contributions from allies like Japan and South Korea may alienate key partners, inadvertently strengthening China’s position in the region.

Conclusion: A high-stakes four years

Trump’s second term presents both challenges and opportunities for Beijing, from potential trade resets to heightened risks of technological decoupling and geopolitical competition. For policymakers on both sides, managing this complex relationship will require balancing immediate priorities with long-term strategic considerations.

China’s response to Trump’s agenda will be closely watched worldwide. Whether Beijing chooses to double down on self-reliance or seeks avenues to de-escalate tensions, the stakes are immense for the global economy and international stability. As the two superpowers continue their strategic rivalry, the international community can only hope for a path that avoids escalation and fosters cooperation on pressing global issues.

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