Photo: AFp/Johannes Eisele
Gergely Salát
28/02/2025 06:00
Unlike the previous two campaigns, the 2024 U.S. presidential election saw little discussion of China by the candidates. This is because there is now a consensus among the American political elite that China’s further expansion must be curbed – a matter on which both sides agree.
Joe Biden continued and even expanded the protective tariffs introduced by the first Trump administration. Before his second presidency, Trump repeatedly spoke about further tariff increases, threatening to impose a 10 per cent surcharge on all imports and a 60 per cent punitive tariff on Chinese goods. Whether this is merely a negotiation tactic or the actual intended rate will soon become clear. What is certain is that Trump has appointed classic “China hawks” to key foreign policy positions, meaning Beijing has little reason for optimism.
China was the biggest beneficiary of the latest wave of globalisation and has a vested interest in keeping the free flow of capital, goods, and technology going. Therefore, the Chinese strongly oppose the policy of “decoupling” and continue to advocate openness. Following Trump’s re-election, they have repeatedly signalled their desire to normalise relations and pursue peaceful, constructive cooperation based on mutual respect.
However, Chinese leaders are not naïve and are well aware that a difficult period lies ahead. In 2016, they still had illusions about Trump; today, they do not. As a result, they are entering the new term far more prepared. In certain areas, they began their own “decoupling” process over a decade and a half ago by keeping major American internet service providers out of the Chinese market and developing their own internet ecosystem. Since Trump’s first term, they have deliberately sought to diversify their partnerships and have successfully reduced their exposure to the United States. The proportion of exports directed towards the U.S. has shrunk, while trade with the Global South has strengthened. Today, their largest trading partner is no longer the United States or the European Union, but the Association of Southeast Asian Nations (ASEAN). At the same time, they have worked to establish complete domestic value chains and boost internal consumption to mitigate their dependence on external markets.
It is certain that Beijing has also prepared countermeasures should Washington increase pressure. The Chinese have a broad range of tools at their disposal: from devaluing the yuan to imposing retaliatory tariffs, and even restricting exports of critical raw materials – primarily rare earth metals – that are essential to American industry. Overall, the Chinese message is clear: “We do not want a trade war, but if you do, we will fight back and strike where it hurts the most.” As a result, the Trump administration must carefully consider every anti-China move.
The author is the head of the Department of Chinese Studies at PPKE BTK and a senior researcher at the Hungarian Institute of International Affairs