The Many Blunders of Trump’s China Policy

Last month the world of academia and think tanks was hit by a small but significant development. Rand Corporation, viewed in some circles as the “think tank of think tanks”, put out a paper calling for a major re-think on China. But within a couple of days the paper, “Stabilizing U.S.-China rivalry” had been withdrawn allegedly “for further review” as its website now states.

According to specialists who had read the paper before its withdrawal, the most significant assertion of this premier think tank of the US military-industrial complex was that China and the US strive for a modus vivendi by accepting each other’s political legitimacy and moderate efforts to undermine each other. In other words, they needed to adopt the principle of peaceful co-existence. It said that the US leadership needed to reject notions of “absolute victory” over China and accept the logic of the “One China Policy” and stop actions aimed at threatening China on account of Taiwan. It is this Taiwan bit that raised a hue and cry in the US leading to its withdrawal.

One remarkable section of the paper detailed how key Chinese language expressions were systematically mistranslated to give them a more hawkish meaning. Among those guilty of this have been Rush Doshi and Matt Pottinger who occupied key China positions in the Biden and the first Trump Administrations respectively. When a think tank like Rand makes such recommendations it is not because they have become “woke” but because it is their assessment that there has been a shift in the material balance of power which calls for a drastic overhaul of US policy.

Incidentally in August, International Security had a paper which asserted that China does not pose the kind of military threat that the West claims. Basing itself on 12,000 articles and hundreds of speeches, it concluded that China had no intention of replacing the US as the global hegemon. The paper ”What does China Want ?” appeared in one of the most respected journals in international relations, published out of MIT, and it noted that a hostile US military posture in the Indo-Pacific was unwise.

It is perhaps this reality that has been shaping the China policy of the current Trump Administration. The Trump team comprises China hawks like secretary of state Marco Rubio, the director of national intelligence John Ratcliffe, the trade adviser Peter Navarro and secretary for war Pete Hegseth. On the other hand there is an influential pro-business faction composed of people like Howard Lutnick, commerce secretary, Elon Musk and US ambassador to China David Perdue who want pragmatic ties with China.

A major problem is that the administration has gutted the National Security Council which traditionally provided the specialist knowledge to shape policy. In May, more than 100 officials of the NSC were fired and their expertise is no longer used by the Administration. One of the victims of this was David Feith who had served as a China expert in the first Trump administration as well. In essence, the administration has chosen to privilege political appointments over expertise.

Short-term measures over offering a sustained and coherent long-term strategy

The consequences of these developments have marked the roll out of Trump’s China policy. This was described in a recent article in the New York Times by Rush Doshi who argued that Trump’s erratic policies had enabled China to emerge as a geopolitical rival of the US. Since taking office, the Trump Administration has pushed short-term measures towards China, good for the headlines, rather than offering a sustained and coherent long-term strategy.

The course of the Trump Administration’s policy can be seen through the lens of tariffs. The February tariffs imposed on each other by China and the US led to unsustainable levels that almost immediately compelled both countries to back off. Then the US tightened semiconductor export controls, only to permit certain Nvidia sales. Trump also kicked the Tik Tok ban down the road calling for a commercial solution.

Eventually after intense negotiations , the two sides reached a truce in Busan on October 30 that required them to come to an agreement within the next year. The US backed off from its new Entity List export restrictions in exchange for China doing so with its rare earths rules. The Chinese also agreed to resume soyabean purchase, much to the relief of Trump’s farmer support base.

A key Trump blunder was to use the tariff weapon indiscriminately. Because it was applied unthinkingly to friend and foe, it ended up alienating allies. While the US has been gifted by vast natural resources and a remarkably productive population, its global strength has been drawn from its network of allies –Europe, Japan, West Asia, Australia. Among those hit, of course, have been India, which remains in the “most tariffed” list even now.

What all this has revealed is the US’s China policy dilemma. Clearly the US is currently making up its China strategy on the go as it is only now getting a full measure of the China of today.

In the meantime China is making its own statements. Faced with an expansion of the Entity List that names the companies that require licenses for export from 1,100 Chinese companies to 20,000 by declaring that all affiliates owned more than 50% by Chinese companies would also face the restrictions. In essence it meant that the US was closing the loopholes through which Chinese were bypassing US restrictions. So, the Chinese decided to unleash their well prepared rare earth and magnets weapon and successfully parlayed a truce with the US.

This is the point in time that Trump began to speak of the relationship as a G-2, or global governance by the two world powers. This was a status that Xi Jinping had sought with Barack Obama at the Sunnylands summit in 2013, but the US had not taken the bait.

After initiating a tariff war with China beginning March 2018, Trump had cracked down on Chinese companies with ties to China’s military or surveillance industry. But the US had taken a step back and signed a Phase I trade deal in January 2020 that committed China to purchase $ 200 billion worth of US goods over two years. But this came apart in the face of the COVID pandemic and a new Administration took office in 2021.

Trump’s acceptance of the G-2 concept was both opportunistic and realistic. In the years since the Sunnylands summit, the Chinese had overhauled their military, embarked on a Made in China project and begun a new civil-military fusion strategy.

Taiwan remains the pill stuck in the US-China throat

China has always had a strategic policy that has called for self-reliance and of ensuring that it holds the key nodes of its industrial supply chains. But the policy was formalised in the Made in China effort to attain self-reliance, innovation, and a strong manufacturing industry that began in 2015. By 2025, it was clear that China had largely achieved plan goals. The coming 15^th five year plan (2026-2030) plans to consolidate the gains made so far and give a push to “high quality development” and emphasise areas such as AI, quantum technology, biotechnology, new energy, and advanced materials.

The US and China have bought a year’s peace with their Busan trade agreement. China has already mapped out its path and is likely to work along it. But what of the US? At this stage, it still seems to be searching for a way out. The US has bolstered its ties with Europe, Middle east, as well as Japan and South Korea, but the earlier Indo-Pacific focus seems to have been squandered.

Last week’s report of the US Economic and Security Review Commission (USCC) has recommended that the US set up a single economic body, reporting to the President, which would deal with the economic and security aspects of the US-China relations. Currently, half-a-dozen entities deal with issues like sanctions, licenses and so on, enabling the Chinese to exploit the resulting loopholes.

The USCC has provided a classified annexure as to the issues relating to the technology competition with China. It has a number of other recommendations in relation to supply chain security, countering China’s industrial policy, Taiwan defence and ways of maintaining primacy in outer space.

At the end of the day it is clear that the world benefits from the stabilisation of the US China rivalry. The Biden Administration was perhaps on the right track when it defined China as a strategic competitor and sought to shape a China policy around this. It sought to create guardrails to ensure that the rivalry did not go off-track even as it worked to check China on the technology front by creating “a small yard with a high fence.” Instead of the unattainable goal of decoupling from China, Biden Administration officials followed the European Union in suggesting the strategy of “de-risking” .

The Biden Administration also gave shape to a US counter-strategy of promoting legislation like the CHIPS and Science Act and the Inflation Reduction Act aimed to boost domestic manufacturing and reduce reliance on Chinese supply chains in critical sectors like electric vehicles and clean energy.

Taiwan remains the pill stuck in the US-China throat, but it should not be a casus belli or an occasion for dangerous confrontation. Most of the world including the US accepts the “One China” policy, though the US does not recognise Chinese sovereignty over Taiwan. As the now withdrawn Rand paper argued, the US should incentivise China to move to its goal of reunification gradually and through peaceful means. This could be done by clear US signals that it does not support an independent Taiwan or a permanent separation across the straits.

The writer is a Distinguished Fellow, Observer Research Foundation, New Delhi.

This piece was first published on The India Cable – a premium newsletter from The Wire – and has been updated and republished here. To subscribe to The India Cable, click here.

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