Other BriefingsTrump Wins the 2024 US Presidential Election: Implications for China
Donald Trump’s victory in the 2024 United States presidential election will shape U.S.-China relations for the next four years, carrying significant implications for trade, diplomacy, and business exchanges. We explore the anticipated impacts of Trump’s election on China and examine the potential effects on U.S.-China business relations.
Donald Trump won the 2024 U.S. presidential election, becoming the 47th president on Wednesday, November 6, 2024.
According to AP News, Trump secured the presidency by winning Wisconsin, surpassing the 270 electoral votes required. As of 10:22 AM China Standard Time, he has amassed 295 electoral votes, representing 50.9 percent of the total. At this pivotal moment, we analyze the potential trajectory for U.S.-China relations in 2025, drawing on policies from Trump’s previous terms and his campaign to anticipate the strategies he may implement.
This article explores Trump’s China agenda and considers the possible impacts of his second term on business and trade interests.
(Source: AP news)
Trade policies under Trump
Trade is arguably the most critical issue in the US’s China policy agenda, with anti-China positions garnering bipartisan support. Both sides of the political aisle agree on the importance of reducing the trade deficit with China and decreasing reliance on Chinese imports. This consensus has led to the implementation of trade barriers during both the first Trump and outgoing Biden administrations.
President Trump initiated a trade war with China in 2018, imposing tariffs of up to 25 percent on a range of Chinese goods under Section 301 of the Trade Act of 1974. President Biden has not only maintained these tariffs but also increased or introduced new duties on strategically important goods.
Trump’s agenda adopts a considerably broader, blanket approach to trade barriers compared to the more targeted strategy employed by the Biden administration. The central aim of his trade strategy is to bring back manufacturing jobs to the US that have been lost to overseas competitors – particularly China.
In his 2024 campaign materials, Trump has proposed universal baseline tariffs on most imported foreign goods, as well as a mechanism to gradually increase tariffs on countries that have been deemed to devalue their currency or engage in other unfair trading practices.
While this policy does not explicitly target China, universal baseline taxes would be a major hit to Chinese exporters – particularly those selling consumer goods – as the US is an important export market for China. It would also considerably increase costs for American consumers and businesses.
Meanwhile, the Trump administration has previously labeled China a currency manipulator, which means it is likely to become the target of the proposed counter-currency manipulation mechanism.
Trump has also pledged to “end reliance on China” by adopting a range of trade barriers, of which the most extreme is revoking China’s most-favored national (MFN) status. This proposal has received support from bipartisan bodies such as the US House Select Committee on the Chinese Communist Party (CCP).
Removing China’s MFN status – called Permanent Normal Trade Relations (PNTR) in the US – would allow the US to subject it to all manner of discriminatory and unilateral trade tariffs. This could include Trump’s suggested 60 percent or higher blanket tariffs on Chinese goods. It would also lead to serious deterioration of US-China relations, and doubtlessly be met with litigation as both the US and China are WTO members.
It is as yet unclear whether Trump is serious in his intentions to take such a bold step, or whether it is simply election rhetoric. Such a move could significantly harm the US economy and the country’s standing in global trade and diplomacy and would prove extremely unpopular among business groups. The decision would also be subject to a congressional vote, and could therefore require bipartisan support, which is currently not evident.
Besides his musings to remove China’s MFN status, Trump has pledged to adopt a four-year plan to “phase out all Chinese imports of essential goods”, including “everything from electronics to steel to pharmaceuticals”. He has vowed to introduce rules that will prevent US companies from investing in China and vice versa, “allowing only those investments that serve American interests”. He has also called for a ban on federal contracts for any company that outsources to China.
Finally, a cornerstone of Trump’s campaign agenda is the introduction of the Trump Reciprocal Trade Act to “stop the flow of American jobs overseas”. This Act would give the US president the authority to impose reciprocal tariffs on a country’s goods if it imposes tariffs on US-made goods that are higher than those imposed by the US. While this Act does not explicitly mention China, Trump is clear about which countries the Act is designed for in one of his speeches: “If India, China, or any other country hits us with a 100 or 200 percent tariff on American-made goods, we will hit them with the same exact tariff.”
Technology, research, and national security policies
Scientific and technological development has become another key battleground in US-China relations under both the Trump and Biden administrations. Central to the conflict is the US’ claim that China has gained an unfair advantage over competitors through practices such as forced technology transfer and corporate espionage, a view that is firmly held on both sides of the American political aisle.
China’s technological and scientific development is seen as a matter of national security, with anxiety surrounding the US reliance on Chinese imports for critical technologies as well as China’s military development.
During his previous term, Trump, being more domestically focused, launched initiatives to curb collaboration with Chinese scientists and academics within the US and limit Chinese companies and individuals’ investment in US land and infrastructure.
In 2018, Trump launched the China Initiative as part of his national security strategy. This was a controversial counter-espionage measure targeting Chinese academics and researchers working in the US. The China Initiative allowed the US Department of Justice (DOJ) to investigate and prosecute “non-traditional collectors” such as Chinese researchers in labs, universities, and defense bases that “are being coopted into transferring technology contrary to U.S. interests”.
This initiative has become a clearly partisan issue. In 2022, the DOJ, under Biden, abandoned the China Initiative following criticism from civil rights groups that it racially profiled and discriminated against Asian Americans and “fueled a narrative of intolerance and bias”.
Since then, House Republicans have sought to reinstate the China Initiative by inserting it in a House spending bill. However, it was later removed from the bill after efforts by Democratic lawmakers.
Trump has rebuked the DOJ’s decision to shut down the program. He has stated that upon winning the election,“efforts [to curtail China’s ability to conduct espionage in the US] will be expanded in a very, very big way”, and that the FBI and DOJ “will be hunting down Chinese spies”. This suggests he may make further efforts to reintroduce the China Initiative or introduce a new but similar policy.
In addition to his counter-espionage policy proposals, Trump has pledged to enact “aggressive” new regulations to limit Chinese ownership in vital infrastructure, such as energy, technology, medical supplies, and telecom, and to pressure Chinese companies to sell off holdings that “threaten the country’s national and economic security”.
During his term, Trump added more than 300 Chinese companies to the “Entity List”, a blacklist that makes it almost impossible for American companies to sell to them. These include the major Chinese technology firms ZTE, SMIC, and Huawei.
He has also stated he will impose visa sanctions and travel restrictions “to shut off Chinese access to American secrets”. In May 2020, Trump suspended visas for Chinese graduate students who have ties to universities affiliated with the People’s Liberation Army. Biden has upheld the suspension, and students were still being denied visas as recently as 2023.
Geopolitics and diplomatic relations
A second term for Trump will likely see a continuation of his confrontational rhetoric and unilateral actions against China. Trump’s first term was marked by aggressive trade policies and criticism of China. However, his isolationist tendencies may reduce the US’s global presence, potentially favoring China by weakening the US’s global alliances.
Under a second Trump term, US-China relations could follow a contentious and unpredictable path, shaped by Trump’s aggressive rhetoric and shifting diplomatic strategies.
Trump’s administration previously adopted a tough stance on China across various fronts. Besides his administration’s trade war with China, Trump took a firm stance on China’s territorial claims in the South China Sea, challenging Beijing’s position and increasing US naval presence in the region.
Throughout his first term, Trump consistently criticized China, especially during the COVID-19 pandemic, which he often referred to as the “China virus”. This rhetoric exacerbated tensions and contributed to a more confrontational relationship between the two countries.
On the other hand, it is possible that Trump will adopt a more isolationist approach in his second term, driven by pressure from within the Republican Party to reduce US overseas engagements. For instance, Trump has been a strong critic of NATO and has threatened to withdraw from the treaty, which would significantly weaken the West’s global positioning. He has also opposed the foreign aid package and has previously refused to say whether he would defend Taiwan militarily while voicing skepticism over Taiwan’s dominance in chip manufacturing and claiming that they “took our business away”.
This could lead to a retreat from the international community, potentially reducing foreign military aid and diplomatic support for allies around the world, including Taiwan. Trump’s less interventionist strategy might tilt the balance of power in China’s favor in strategic regions like the Asia-Pacific.
Moreover, despite Trump’s volatile demeanor, he has demonstrated a willingness to engage in diplomatic dialogue with China and make concessions. For example, in June 2019, Trump relaxed the ban on US exports to Huawei. While Trump has praised President Xi personally, his policies towards China remain fluid and could shift based on diplomatic negotiations and domestic pressures.
China’s view on the 2024 election
China finds itself in a precarious position with regard to the outcome of the US presidential election and Beijing anticipates facing challenges due to the bipartisan anti-China sentiment prevalent in the US.
To counter unilateral actions by Washington DC, China has been fortifying its toolkit of measures, including counter-tariffs and export controls. In April 2024, China passed a new Tariff Law, formalizing rules for imposing anti-dumping and counter-tariffs on imports. Additionally, the Anti-Foreign Sanctions Law, passed in June 2021, empowers China to respond to foreign sanctions with its own counter-sanctions, affecting individuals and companies operating in the target country. In October 2024, China issued a set of new Regulations on Export Control of Dual-Use Items, marking a significant step in its efforts to safeguard national security and enhance global cooperation on non-proliferation.
China has already demonstrated its readiness to impose countermeasures on the US. It has recently launched anti-dumping probes into chemical imports from the US, EU, Japan, and Taiwan, restricted exports of high-end technologies, and imposed export restrictions on key metals for chip production. These measures are widely seen as retaliatory responses to US actions.
The intent behind these actions is clear: China aims to safeguard its national interests and counter any attempts by the US to exert pressure through unilateral measures. By diversifying its toolkit and implementing targeted responses, China seeks to mitigate the impact of US policies on its economy and maintain its position in the global arena. However, the escalation of trade tensions and technological competition between the two countries underscores the fragility of the US-China relationship and the potential for further deterioration.
On November 6, 2024, a spokesperson for the Foreign Ministry stated that China respects the American people’s choice in their election. In response to questions at a regular press conference, the spokesperson emphasized that China’s policy toward the US has been consistent and declined to comment on the possibility of Washington imposing additional tariffs on imports from China.
On November 7, 2024, President Xi Jinping called Donald Trump to congratulate him on his election as President of the United States. Xi noted “History teaches us that cooperation between China and the U.S. benefits both sides, while conflict harms both. A stable, healthy, and sustainable China-U.S. relationship aligns with the common interests of both countries and the expectations of the international community.”
Business impact and policy considerations
The potential impact of Trump’s 2024 presidential victory on businesses spans increased supply chain disruptions, heightened market volatility, and a more uncertain investment and regulatory landscape.
Under Trump’s administration, US-China relations are likely to remain tense. His approach may introduce further unpredictability, and his broader trade policies could potentially ignite another trade war.
Academic and research collaboration could also face new challenges, potentially stifling innovation and knowledge-sharing. Additional US investment restrictions on China could complicate operations for American companies, making business conditions in China more challenging.
Supply chain disruptions and market volatility remain critical concerns, particularly given trade tariffs and possible countermeasures from China. Any escalation in military tensions within the Asia-Pacific region could further amplify these disruptions, impacting market stability.
Overall, the investment climate and regulatory environment could experience increased strain, with American companies at risk of being caught in diplomatic conflicts between the two nations. Notably, China has thus far refrained from targeting US companies specifically, instead working to attract foreign investment and enhance the business environment for international companies.
Preparing for Trump’s second term
US and Chinese companies should prioritize diversifying their supply chains and incorporating potential trade tensions into their strategic planning to mitigate disruption risks. Assessing risk exposure in both markets, especially with regard to tariffs and export controls, will be essential.
Stakeholders must remain vigilant and proactive, closely monitoring policy developments to better manage potential impacts on business operations.
Continuous analysis and adaptation are also imperative for navigating the evolving geopolitical landscape. Given the complexity of US-China relations, companies need to regularly adjust their strategies to align with shifting policies and market conditions. This adaptability will be critical for businesses to capitalize on opportunities, manage risks, and maintain resilience amid ongoing geopolitical tensions.
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