Trump's return to White House spells uncertainty for U.S.-China relationship

Donald Trump's return to the White House is sure to be felt globally, including in China one of the United States' biggest trading partners and an emerging superpower on the world stage.

The uncertainty of the next few years could be seenin the response from Beijing.

As Chinese President Xi Jinping congratulated Trump on his Nov. 5 election win, he also issued a warning, saying the two countries"gain from co-operation and lose from confrontation," according to a post on X, formerly Twitter, from Xie Feng, China's ambassador to Washington.

"There's no formula," said Lynette Ong, a distinguished professor in Chinese politics at the University of Toronto's Munk School of Global Affairs and Public Policy. "[Trump's] brand is ... a lack of predictability."

During Trump's first term as president after his election in 2016, the relationship between him and Xi began jovially but crumbled during the COVID-19 pandemic and an ensuing trade war. It wasn't until November 2023 that relations began to normalize after Xi and U.S. President Joe Biden met in San Francisco on the sidelines of the Asia-Pacific Economic Co-operationsummit.

The incoming president, though, who won a sweeping victory over Kamala Harris a week ago, has repeatedly vowed to impose punishing tariffs of up to 60 per cent on imports from China, which would further disrupt the already weakened Chinese economy.

Geopolitical implications also loom for Trump's second term, especially if he continues to withdraw from the international stage, putting Taiwan's future in question.

"There's definitely a lot of anxiety among businesses in China and also in Beijing among the leaders," said Jia Wang, senior fellow and senior adviser at the China Institute at the University of Alberta in Edmonton.

Trade implications

The foremost, and likely most immediate concern, is the issue of trade, as Trump indicated in February in an interview with Fox Newsthat he plans to slap 60 per cent tariffs on all Chinese imports (along with a blanket 10 per cent tariffon all imports into the U.S.) a blow to the world's second-largest economy.

Not only are the rates higher than the tariff of up to 25 per cent levied during his first term, but China's economy isn't as resilient as it was during that period. Since the pandemic, there has been a downturn in the country's real estate market with slumping home prices and sales, along with rising government debt and unemployment.

The Biden administration stayed the course, imposing a 100 per cent surtax on Chinese-made electric vehicles, 50 per cent on computer chips and 25 per cent on EV batteries, aluminum and steel. Canada matched the 100 per cent tariffthis fall, to mixed reviews from analysts, and a 25 per cent surtax on steel and aluminum imports from China began on Oct. 15.

"There's going to have to be more focus on the [Chinese] domestic economy," said Han Shen Lin, who works in Shanghai as the China country director for Washington-based consultancy firm The Asia Group.

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Indeed, China has been trying to do just that. As recently as this past summer, officials like Premier Li Qiang said the country would focus on diversifying its markets and boosting domestic demand instead of relying on exports as trade tensions escalate globally. It has rolled out various stimulus measures in recent months.

Considering China exported in excess of $400 billion US worth of goods to the United Statesin 2023, according to the United States Census Bureau, focusing on consumption domestically won't happen overnight.

"They willrequire a tremendous amount of consumer confidence," the University of Alberta's Wang said.

U.S. could turninward

While China is attempting to transition its economy, the geopolitical landscape could also shift if Trump's first term is any indication, potentially benefiting Beijing.

Under Trump, the U.S. withdrew from multiple international agreements, including the Paris Agreementon climate change, the Trans-Pacific Partnership and the United Nations Human Rights Council.

If he continues to turn inward, there would be a shift in global governance, leaving a power vacuum that China could step up to fill with less resistance from a Western ally system led by the U.S.

"China could take this opportunity to make more friends or at least reduce rivals and enemies," Wang said.

This is an undertaking that's already underway, the latest example being a meeting in October between Indian Prime Minister Narendra Modi and Xi Jinping the first in five years due tovarious border disputes. (India may have had its own reasons for the rapprochement.)

"We believe that the India-China relationship is very important, not only for our people but also for global peace, stability and progress," Modisaid in October.

The Taiwan question

According to Lin of The Asia Group, there could be an "atrophy of the alliance system."

With that, China may also have an opportunity to assert its presence in its own sphere of influence, including in the Pacific, putting the future of Taiwan into question.

Under the "One China" policy,Beijing views Taiwan as part of the country, not an independent state, frequently touting "reunification."

Although it has no formal diplomatic relations with Taiwan, the U.S. has unofficially maintained ties and commits to its defence.

In 2016, Trump famously drew ire from China after taking a phone call from then-Taiwanese president Tsai Ing-wen after winning the White House, becoming the first U.S. president (and president-elect) to speak to a Taiwanese leader since the 1970s.

In October, he told the Wall Street Journal that China would not dare provoke the Republican leader because President Xi Jinping knows he is "f--king crazy."

However, on a recent episode of the Joe Rogan Experience podcast, Trump mused thatTaiwan should pay Washington for its defenceand routinely accused it on the campaign trail of stealing the U.S.'s semiconductor industry, threatening soaring tariffs.

Currently, analysts estimate that about90 per cent of the world's advanced chips are manufactured by Taiwan SemiconductorManufacturing Company.

Considering the lack of consistency and the president-elect's previous non-interventionist stance, some say he could lose sight of the island as he focuses on the relationship with Beijing.

"He might forget [about defending Taiwan] completely," the University of Toronto's Ong said. "That will send a very kind of strong signal to China that Taiwan is up for grabs."

This time around, Taiwan was quick to deny that its current president, Lai Ching-te, was going to make a similar phone call, a likely indicator of the fragility of the relationship this time around.

"I don't think Taiwan has a lot of allies around the world aside from the United States, so it's actually fairly weak," Ong said.

At a routine press briefing following Trump's election, officials with the Ministry of Foreign Affairsreiterated that "China firmly opposes any form of official interaction between the United States and Taiwan."

"The U.S. government should abide by the One China principle," warned spokesperson Mao Ning.

What the Trump administration's approach will be will also depend on the people he appoints.On Tuesday, Trump said he picked retired Army Green BeretMike Waltz as national security adviser, a China hawk and prominent critic.

"We still hope that people at the top havesome degree of sensibility," said Ong.

How does Canada factor in?

With Trump in office, Beijing'srelationship with Ottawa may be put on the back burner as leaders manage their ties with the U.S.

However, there's another outcome, according to Wang, who saidthe possibility of a weakened Canada-U.S. relationship and a more uncertain future could lead to China strengthening its ties outside of the Pacific region.

"Canada may also have an increased incentive to look elsewhere in the world," she said.