2024-11-07 11:00:00
Taipei. The first time China dealt with Donald Trump in the White House, a trade war broke out, Taiwan’s former ruler violated an agreement and a rift emerged between the two once-close leaders.
As Trump prepares to begin his second term, China is bracing for new uncertainty in the Sino-U.S. relationship and renewed tensions over trade, technology and Taiwan.
A new tariff war is coming
If Trump fulfills his campaign promise, the biggest consequence for China may be his threat to impose a 60% tariff on all Chinese goods exported to the United States.
Tariffs of this magnitude would deal a blow to China’s already unstable economy, which is suffering from high youth unemployment, a chronic housing crisis and government debt. According to an analysis report released by UBS Group a few months ago, imposing a 60% tariff on Chinese imports may reduce China’s economic growth expectations by 2.5 percentage points, or about half.
During Trump’s last term as president, Washington imposed tariffs on more than $360 billion in Chinese goods. That brought Beijing to the negotiating table, and the two countries signed a trade deal in 2020 in which China pledged to improve intellectual property rights and buy an additional $200 billion in U.S. products. Years later, a research team found that China had purchased virtually none of the promised products.
President Joe Biden has kept most of the tariffs in place and added some this year on imports of products such as steel, solar panels and electric vehicles.
Henry Gao, a law professor at Singapore Management University who specializes in international trade, said that, like last time, tariffs could be a tool to force Beijing to the negotiating table.
“Given that China is in a weaker economic position this time, I think the willingness to talk will be stronger,” he explained. “So while the tariffs may have some short-term impact on the Chinese economy, the situation is likely to improve once an agreement is reached.”
Trump has called on Chinese President Xi Jinping to help reach a resolution to the war in Ukraine, potentially adding content to trade talks.
Trump has previously sought Xi Jinping’s help in confronting North Korean leader Kim Jong Un. Wang Huiyao, founder of the Center for China and Globalization, a think tank in Beijing, said this dynamic is likely to repeat itself as Trump considers his trade options and China’s support in the global crisis.
“China is Russia and Ukraine’s largest trading partner,” Wang wrote in a recent commentary. “These close economic ties provide China with a unique opportunity to play a central role in peacekeeping efforts.”
Get ready to go “crazy” for Taiwan
Trump has threatened to impose higher tariffs – 150% to 200% – on Chinese goods under one scenario: if China invades Taiwan, the self-governing democracy that Beijing claims as part of its territory.
The United States does not recognize Taiwan as a country, but it is its main ally and largest arms supplier.
In December 2016, Trump violated diplomatic protocol and accepted a congratulatory message from Taiwan’s then ruler Tsai Ing-wen, a move that angered Beijing. Since Washington and Beijing established diplomatic relations in 1979, no U.S. president has spoken directly to the president of Taiwan.
Trump’s actions sparked anxiety among think tanks, but he ultimately maintained his support for the status quo in Taipei’s relations with Beijing.
Zhu Feng, dean of the School of International Relations at Nanjing University, said China hopes Trump will maintain this stance.
“Would he want to turn around and support Taiwan independence? “This is unlikely,” he stressed.
Regarding China’s repeated threats to annex Taiwan, Trump told the Wall Street Journal last month that he wouldn’t have to use force to stop the blockade because Xi Jinping “respects me and knows I’m crazy.”
During the campaign, Trump occasionally spoke of his personal relationship with Xi, which began to flourish during his first term, but the two leaders have been criticized for their differences over trade and the origins of the COVID-19 pandemic. Differences arise out of differences.
But Trump also said Taiwan should pay the United States to protect the island from China, a situation he likened to insurance. Taiwan spent about 2.5% of its GDP on defense this year and spent hundreds of millions of dollars on U.S. weapons.
David, director of the Center for International Security and Strategic Studies at Tsinghua University in Beijing, said Trump deliberately maintains a sense of uncertainty in relations with China.
“The challenges are obvious,” he said. “These are opportunities that we don’t see clearly yet.”
Chip dispute
During his first term, Trump began to target Chinese technology companies due to security concerns, focusing on large companies such as telecommunications giant Huawei. Biden has maintained this direction by restricting China’s access to advanced semiconductors, which are necessary for the development of strategic industries such as artificial intelligence.
But Trump criticized the Chip and Science Act that Biden signed into law, a bipartisan initiative that allocates $53 billion to the development of domestic semiconductor manufacturing. Currently, nearly 90% of the world’s most advanced chip supply is produced in Taiwan.
TSMC, the island’s largest semiconductor manufacturer, expanded production in Arizona partly in response to the Chip Act and partly to resist any other protectionist policies implemented by the United States, Shihoko Goto said. .
Trump has pledged to repeal the CHIPS Act, even as his critics say it will undermine his campaign to reindustrialize the country. The Republican also accused Taiwan of “stealing” the U.S. chip industry decades ago.
“Taiwan’s dominance of the chip industry may actually become a source of tension between Taipei and Trump, rather than supplying Silicon Shield, as Taiwan’s success in the field may be seen as only being achieved by leveraging U.S. advantages,” Goto said.
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This story was translated from English by AP editors with the help of generated artificial intelligence tools.
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**Interview with Henry Gao: Expert on Sino-U.S. Trade Relations**
**Interviewer:** Thank you for joining us, Professor Gao. As we see Donald Trump preparing for potentially another term as President, what are the key factors that could determine the U.S.-China trade relationship in 2024?
**Henry Gao:** Thank you for having me. A significant factor will be Trump’s proposed tariffs, particularly the exceedingly high 60% tariff on all Chinese goods. If implemented, this could further destabilize China’s already fragile economy, which is grappling with issues like high youth unemployment and chronic debt.
**Interviewer:** You mentioned that the economic conditions in China might lead to a different willingness for negotiations. Could you elaborate on that?
**Henry Gao:** Certainly. Given China’s weaker economic position now compared to Trump’s first term, they may be more inclined to negotiate. If Trump uses tariffs as leverage once again, there’s a potential for China to engage in talks that could lead to an agreement, as they can’t afford the economic strain.
**Interviewer:** In the past, the tariffs had a major impact on the bilateral relationship. Do you foresee the same scenario playing out in the coming months?
**Henry Gao:** I believe we can expect a similar trend, with tariffs functioning as a tool for negotiation. However, the situation could be somewhat different due to the global economic landscape. If both nations can find common ground—especially concerning issues like the war in Ukraine—there may be a path towards reduced tensions.
**Interviewer:** Trump has suggested he may impose even higher tariffs if China were to invade Taiwan. How do you see this affecting not only trade but also geopolitical stability in the region?
**Henry Gao:** Yes, that scenario adds a layer of complexity. Taiwan is a critical ally for the U.S., and it’s vital that Washington conveys its commitment to Taiwan’s defense. However, it remains to be seen whether Trump would advocate for Taiwan’s independence, as that might provoke a more aggressive response from China. It’s a delicate balance.
**Interviewer:** Regarding Trump’s past relationship with Xi Jinping, do you see any continuity from his previous administration in terms of diplomatic engagement?
**Henry Gao:** It’s hard to predict the dynamics of their relationship. While Trump touts a personal rapport with Xi, substantive disagreements over critical issues like trade and Taiwan remain. It’s hypothetically possible they could collaborate on global challenges, but there are numerous obstacles.
**Interviewer:** Lastly, what effect could the upcoming election have on U.S. policies towards China, regardless of who wins?
**Henry Gao:** The election will undoubtedly shape U.S. policy. If Trump wins, we could see a continuation and even escalation of trade hostilities. On the other hand, if a different candidate emerges, there might be a recalibration aimed at managing the relationship more constructively. The focus should be on finding ways to foster cooperation without compromising on national interests.
**Interviewer:** Thank you, Professor Gao, for sharing your insights on such a pivotal issue.
**Henry Gao:** Thank you for having me. It’s a crucial time for U.S.-China relations, and the outcome of the elections will certainly play a significant role in shaping the future.
