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Dewey Sim

Tensions between the world’s two largest economies appear controlled after Donald Trump’s return to the White House, belying months of anti-China bluster from the new US leader.
Three days ahead of his January 20 inauguration, Trump had a phone call with Chinese President Xi Jinping to discuss issues including fentanyl and trade, an exchange he described as “very good”. He also reportedly plans to visit China.
After taking office, Trump also held back on immediately imposing tariffs on China as earlier threatened.
However, that relative calm was short-lived and both countries are now throwing punches that are mounting to a trade dispute.
According to diplomatic observers, Trump’s emerging strategy towards China appears to involve the threat of tariffs to hammer out a deal.
But if that gambit were to fail, Trump would push ahead with higher tariffs, and that is when China would give up “playing defence” and strike back, the observers said.




Kevin Chen, an associate research fellow at the S. Rajaratnam School of International Studies in Singapore, said the early days of Trump’s second term as US president should be likened to the calm before the storm as he seemed persistent about his tariff threats.
Already, the Trump administration has imposed a 10 per cent tariff on Chinese exports, but it is lower than the 60 per cent tariff he threatened during his election campaign.
China retaliated with 10-15 per cent additional tariffs on 80 goods and an export ban on five critical materials but the moves were widely seen as measured and potentially serving as an invitation for negotiation.
Trump on Monday said the 10 per cent tariff was just “an opening salvo” and that further tariffs would be “very, very substantial” if no deals could be reached with China.
The US president initially signalled that he could speak to Xi within 24 hours but later said he was “in no rush” and would do so “at the appropriate time”.
Chen said Trump might be putting the brakes on hefty tariffs as he believed he had “an opening” to demand more from China, particularly after he delayed the TikTok ban and with Beijing sending Vice-President Han Zheng to his inauguration in a first for a senior Chinese leader.
One of Trump’s first executive orders as president was a 75-day stay on the federal enforcement of a Biden-era law that requires US firms to stop hosting short-video app TikTok unless its Chinese parent ByteDance sells its US operations.
Dominic Chiu, a senior analyst with Eurasia Group, put the relative calm down to “rhetorical positivity” from the leaders of both countries and the lack so far of concrete anti-China action from Trump.
Xi told Trump during their call that Beijing was ready to “secure greater progress in China-US relations from a new starting point”, and that the two sides should cooperate closely and “keep the two giant ships of China and the United States sailing forward”.
Chiu highlighted the transactional nature of Trump’s dealings with China – which suggested that he wanted to leverage the goodwill gained through actions that could be interpreted as olive branches, to negotiate with Beijing.
This included his phone call with Xi, delaying the TikTok ban, and expressing his interest to visit China, Chiu said.


The seeming calm could also stem from a practical reason – with the Trump administration prioritising domestic issues and Beijing avoiding direct attacks on the president while showing a willingness to talk to prevent a long-feared breakdown in ties.
But, according to Chiu, the apparent restraint is likely to be temporary. “I think confrontation will ramp up when preliminary attempts at securing a deal that satisfy both parties fail,” he said, adding that Chinese leaders had yet to express a “serious desire” to discuss prospects of a workable deal.
“Aside from tariffs, there are a host of other security and technology competition-related domains that the Trump administration could act on, which would escalate bilateral tensions once more.”
Chen similarly suggested that tensions could spike if Chinese leaders failed to meet Trump’s demands or if Trump failed to secure the China visit that he has reportedly discussed with his advisers.
“Trump sees the utility in tariffs, not just as a tool to raise revenue but also as a bargaining chip,” Chen said.
Sun Chenghao, a fellow at Tsinghua University’s Centre for International Security and Strategy, said developments in Trump’s first days back at the White House did not represent a shift in his China strategy but could instead be viewed as a tactic, noting that Trump was rather tough on China on his campaign trail.
Sun said Trump’s decision not to immediately slap 60 per cent tariffs on Chinese goods as earlier threatened might have been due to a lack of consensus within his team, with one camp favouring economic decoupling and the other favouring a deal with China.
Chen noted that Trump’s approach towards China so far had been similar to that in his first presidency, where he used “harsh positions with artificial deadlines to raise awareness of an ongoing issue, then sign a deal and claim victory at the last minute”.
This was the case when Trump threatened to raise tariffs on Chinese goods in December 2019, but suspended the plan after China in January 2020 signed phase one of a trade deal aimed at reducing the US deficit.
“Given this pattern of behaviour, Trump’s current friendliness towards China is likely because he sees an opening to demand something from Beijing, not because his first instinct is to be friendly,” Chen said.
According to Chiu, Trump’s strategy towards China “oscillates between friendly overtures and aggressive policy gesturing”, characterised by inconsistent and unpredictable decision-making.
But he said one thing was certain – that Trump was motivated by the overarching goal of “ensuring America’s victory”.
“This victory can come in a variety of forms, with both long-term and short-term implications – generating goodwill that culminates in a grand state visit, getting trade and investment concessions through aggressive tariff moves, long-term reshoring of critical industries and strategic decoupling and so on,” Chiu said.
“His overt friendliness towards Xi is a manifestation of that motivation.”


Rorry Daniels, managing director of the Asia Society Policy Institute, said the initial calm suggested that both sides were torn on how to manage the relationship in the short term while retaining strategic advantage in the long term.
Holding off on the threatened tariffs while pursuing dialogue signalled Trump’s willingness to negotiate, she said, but both leaders were possibly being advised by teams “who have deep mistrust of the other side”.
“I expect the period of calm to end when one side or the other loses patience to pursue the confrontational aspects of their agenda,” Daniels said. “We don’t know yet what would trigger that loss of patience, because it’s a judgment call by the two leaders themselves, that they feel their long-term strategic plan is at risk if they wait or compromise in the short term.”
Trump’s broad China strategy was to protect and defend American interests, she said, adding: “Right now, he seems to feel that the US can afford to be pragmatic towards China, with the tools of leverage like tariffs that the US could implement.”
In comparison, China’s strategy towards the US was more transparent, the analysts said. Chiu noted that while China had consistently signalled continued cooperation, it still had the policy tools to retaliate if targeted.
According to Sun at Tsinghua University, with additional tariffs imposed, China would have “no choice but to strike back” including with corresponding countermeasures.
Some of these measures were evident during Trump’s first presidency, when Beijing initiated a dispute with the World Trade Organization over the US tariffs and imposed some of its own on American agricultural products.
Meanwhile, Chiu highlighted China’s drive to reduce long-term reliance on the US across all fronts, from finance to trade and technology.
China has also continued to deepen its trade and investment ties with neighbours, particularly those in the Global South. It has also invested domestically in technological growth, especially artificial intelligence, advanced semiconductors and biotechnologies – where the US has sought to hobble its progress.
“China is also playing defence, preferring to let Trump make the first move to avoid being seen as the instigator of a new round of tariffs or other aggressive policies from Washington,” Chiu said.
As Sun put it: “Although China seems to be passive, it is actually also actively planning and preparing.”


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Diplomacy

If US leader fails to make deals he seeks, he is likely to push ahead with duties – and Beijing will ‘strike back’, according to observers


If US leader fails to make deals he seeks, he is likely to push ahead with duties – and Beijing will ‘strike back’, according to observers.
