With the election victory of Donald Trump, the US will attack China where it hurts the most: its economy and international influence. In his first term, Trump didn’t just talk tough; he took action, started a trade war with China and established tariffs and restrictions that threw people off balance.
Biden retained many of those policies, but Trump’s return signals a new and intensive approach that builds on existing foundations — and this time, China will join the fight. China’s economy is expected to fall short of its 5% growth target, and after Trump takes office, that number could continue to decline.
A key player in Trump’s first term is US Trade Representative Robert Lighthizer, aptly called the architect of the US-China trade war. During my years in China, interpreting Trump’s policies for a think tank, I read Lighthizer’s reports regularly and was impressed by his efforts to prevent the CCP from using US consumer money to finance the expansion of the People’s Liberation Army (PLA). One of his significant accomplishments is that he has put an end to China’s intellectual property theft, estimating that they steal hundreds of billions of US IP each year.
From inside China, I know that Trump and Lighthizer are right and the best way to prevent war is to cut China’s income and prevent it from achieving military parity with the US. they mocked Trump. They despise trade wars because they make cheap plastic products more expensive, and value price differences more than national security. Public opinion was divided; only about 44% see China as a threat. However, despite the headwinds, Trump and Lighthizer continued their trade war, significantly damaging China.
The Biden administration, for all its criticism of Trump, continues with Trump’s policies, increasing tariffs and trade restrictions. Trump also strengthened the ability of the Committee on Foreign Investment in the United States (CFIUS) to limit Chinese investment in the US, a legal authority that Biden has called on several times to stop certain Chinese investments. Trump is likely to avoid CFIUS’s powers to prevent China from owning farmland and possibly factories in the US
This time, most of Congress will support Trump, and among the population, about 81% believe that China is a threat, which means that the public will support a trade war. How the media will react remains to be seen, but maybe they will be softer on Trump’s trade war with China this time, or the average person will not care what the media says and will support measures to protect it. the US economy from China.
China’s strategy to “Trump-proof” its economy by seeking out more trading partners and reducing its dependence on the US actually serves its purpose. If China stays out of the supply chain, that’s fine; it is strategic decoupling at its finest. For example, China has reduced agricultural imports from the US over the past eight years, prompting American farmers to turn to other markets. Apart from a spike in 2022, US agricultural exports show steady growth from 2018.
China’s tariffs not only discourage China from manufacturing and exporting to the US, but also prevent companies from the European Union and the US from manufacturing in China and exporting to the US. in a third country—for example, manufacturing in China, then packaging and shipping from Vietnam. However, Trump’s team, led by Lighthizer, is on top. The Office of the US Trade Representative monitors imports to ensure that circumvention attempts are blocked.
The rules of origin allow the USTR to analyze imports and determine the percentage of products that originate in China, to ensure that they are still subject to tariffs even if they are exported from places like Indonesia or the Netherlands. Foreign companies that once regarded China as a production center are now faced with the reality that they will have to relocate. This shift is good news for emerging economies like Vietnam, Thailand, India, and Indonesia, which will benefit from the transition as we build stronger relationships with them.
If the Trump team maintains a consistent approach and further exploits China’s economic vulnerability, we can push Beijing further into balance. While some are predicting a total collapse, I expect a slower but steady recovery in China’s economy. Growth projections for China fell below 5%, and the yuan fell.
Because of the size difference between our economies, China would have to grow by more than 3% just to keep pace with the US economy growing at 2%. With Trump back in office and more restrictions likely, China’s growth will stall, delaying its economic ambitions for decades.
China’s core problems — an aging population, a real estate crisis, and a growing debt crisis — aren’t going away anytime soon. The CCP depends on export revenue, but as foreign investment dries up, that revenue stream dwindles. International investors are moving elsewhere as risks in China continue to rise.
In short, Trump’s return is set to intensify economic pressure on China. With strong public support and a Congress capable of taking tougher action, Trump 2.0 is poised to hit the CCP where it hurts the most: its base. By cutting Beijing’s revenue stream and keeping the US economy free from Chinese influence, America can maintain its position as the world’s leading economic and military power.
