The Chinese Communist Party is closely monitoring the upcoming 2024 US presidential election, with both the current Biden administration and former President Trump adopting increasingly unfriendly policies towards China. However, due to Trump’s unpredictability, the CCP privately prefers Biden or his potential successor Vice President Harris for their predictability. So, what would it mean for China if Trump wins a second term and returns to the White House?
At a campaign rally in Minnesota at the end of July, Trump reiterated that if re-elected as US president in November, he would revoke China’s trade Most Favored Nation status. Trump told the crowd on July 27, “To protect the workers of Minnesota, I will revoke China’s trade Most Favored Nation status. It will be terminated, and I will terminate it.”
Furthermore, Trump stated that he would also pass the “Trump Equal Trade Act.” He said, “This means that if China or any other country tries to make us pay 100%, 200%, or 300% in tariffs, we will make them pay 100%, 200%, or 300% in reciprocal tariffs. It’s an ‘eye for an eye’ approach, and it’s time to do it.”
Previously, Trump had mentioned multiple times that if he wins a second term this year, he would increase tariffs on Chinese goods to 60%.
Goldman Sachs Group, a globally renowned investment bank and asset management firm, stated that Trump’s 60% tariff plan poses “significant downside growth risk” to the Chinese economy.
Goldman’s Chief China economist, Hui Shan, told CNBC on July 16 that Trump’s potential tariff hike under US leadership primarily poses “downside risks” to the Chinese economy due to increased uncertainty, tighter financial conditions, and pressure on the Chinese yuan. She pointed out that Trump’s 2018 tariffs did not significantly weaken China’s exports to the US.
The United States is China’s largest single-country trading partner, with Southeast Asia and the EU being China’s two largest regional trading partners.
Recent data indicates a slowdown in Sino-US trade, with Chinese exports to the US growing by only 1.5% in the first half of this year.
Hui Shan stated that imposing a 60% tariff on Chinese goods would have a significant impact on the macroeconomic conditions in China. Following the Biden administration imposing a 100% tariff on Chinese electric cars in May, the EU began levying tariffs as high as 37.6% on Chinese electric cars starting in July.
Hui Shan noted that the tariff policies of these trading partners would severely hit the Chinese economy, saying, “We see the talk of tariffs not only in the US but also on other major trading partners of China, so it won’t be a sustainable driver for Chinese economic growth.”
CNN’s report on July 18 quoted some economists’ views, stating that if the US imposes a 60% tariff on all imports from China, it would essentially decouple the two largest economies in the world.
In an interview published in Bloomberg Businessweek on July 16, Trump suggested that he could increase tariffs on Chinese goods to around 50%, which would encourage US companies to bring their production lines back from China and set up more manufacturing facilities in the US. He said, “Economically, tariffs have been amazing.”
In the same Bloomberg Businessweek interview, Trump also mentioned the idea of Taiwan paying “protection money,” stating, “They (Taiwan) should pay us for national defense costs.”
Moreover, in May of this year, The Washington Post revealed that during a fundraising event, Trump stated that if the Chinese Communist Party dared to invade Taiwan during his presidency, he would respond with “bombing Beijing” as retaliation.
Within just a few months, from “bombing Beijing” to demanding “protection money” from Taiwan, some commentators have remarked that Trump’s statements and actions are too unpredictable.
JD Vance, Trump’s running mate and federal senator, explained Trump’s “protection money” comments by warning US “allies” not to expect “free rides” anymore. Vance believes that providing excessive free military protection to allies is a betrayal of generosity towards US taxpayers.
Since the establishment of official diplomatic relations between the US and Communist China in 1979, the US and Taiwan have maintained unofficial relations, but are committed under the Taiwan Relations Act to provide defense support for Taiwan. For decades, Taiwan has been purchasing weapons from the US and received its first-ever US arms aid support last year.
Yun Sun, Director of Stimson Center’s China Program, told CNN that Trump is unlikely to “alter the fundamentals of US-Taiwan policy or overlook Taiwan’s security.” However, compared to President Biden, who has strengthened ties with US allies due to concerns about the Chinese threat to Taiwan, Trump may adopt more transactional and assertive measures. Reports indicate that during his first term, Trump asked Japan and South Korea to pay more for hosting US troops on their soil. This approach aligns with Trump’s demand for NATO members to contribute their fair share of defense expenses or risk losing the collective defense commitment.
Former National Security Advisor under Trump, Robert O’Brien, stated that he believes Trump’s intent is for Taiwan to significantly increase its defense spending.
Both the Taiwanese Executive Yuan and Ministry of National Defense have expressed their willingness to take on more responsibility for their defense and regional peace.
Executive Yuan Chief Cho Jung-tai responded to Trump’s “protection money” comments by saying, “We are willing to do more for our shared responsibilities in the Taiwan Strait and Indo-Pacific region. This is for our own defense and to ensure our own security.”
Elbridge Colby, primary architect of the 2018 US National Defense Strategy and former senior Pentagon official, stated during a Voternomics interview following the “protection money” controversy that the US would support Taiwan’s “freedom and democracy,” but would prioritize helping those who help themselves.
He said, “From what I understand on Taiwan defense issues, President Trump essentially maintains a traditional strategic ambiguity policy.” However, he emphasized, “What Americans can do is limited, and we have seen that, excessively soothing our allies would foster free-riding behavior.”
Trump’s unpredictability in his statements also seems to be aimed at keeping his opponents guessing about his strategies. Last year in June, when asked by a Reuters reporter whether the US would militarily defend Taiwan if China invaded, Biden has consistently affirmed a positive response when asked the same question by the media on multiple occasions.
Trump’s response last year was, “I don’t want to talk about this issue. The reason I won’t talk about it is it hurts our position for negotiations in the future. I can only tell you that in my four years of presidency, there has been no threat, and if I were president, it wouldn’t happen.”
A report by Taiwan’s Central News Agency on August 11 stated that US House Foreign Affairs Committee Chairman Michael McCaul confirmed that in the final year of his first term, Trump personally told Chinese leader Xi Jinping that if he ordered an invasion of Taiwan, Trump said, “I will blow you to smithereens.”
On the evening of August 12 (this Monday), during a conversation with Elon Musk, founder of X platform (formerly Twitter), and CEO of Space X and Tesla, Trump expressed concerns about “nuclear warming” rather than global warming.
Trump warned that although China’s nuclear capabilities are currently behind the US, they could potentially surpass America’s leading position “earlier than people might imagine,” triggering concerns about global nuclear dynamics.
The online event was delayed by 40 minutes due to a “DDOS attack” on the X platform servers. Subsequently, the conversation between Trump and Musk lasted nearly two hours, covering a range of topics including illegal immigration, border security, traditional energy, oil drilling, clean energy, climate change, artificial intelligence, federal spending, and more.
Highlighting the direct risks the US might face, Trump expressed that the threat of nuclear war – “nuclear warming” – far outweighs climate change concerns.
There are five recognized nuclear-weapon states in the world, the permanent members of the UN Security Council – the US, China, France, UK, and Russia. However, the actual number of nuclear-armed states now extends to 10, with India, Pakistan, North Korea, Israel, and Iran joining the original five.
Trump stated that the US needs a capable president to take effective action to curb nuclear proliferation. He told Musk, “We (the US) possess major nuclear weaponry, you know, and some other countries might be trying to achieve that goal too, which is very dangerous. That’s why you need a strong US president because you don’t want this kind of nuclear proliferation.”
Trump also mentioned China’s rapid development of its nuclear weapons, warning that if left unchecked, China could quickly surpass the US and pose a nuclear threat to the world. He remarked, “China now has much fewer (nuclear weapons) than us, but they will catch up to us sooner than people think…they will eventually catch up and may even surpass (us).”
In the aforementioned Voternomics interview, Colby pointed out that in his first term, Trump completely reversed US policy towards China from “engagement” to “competition,” bringing about “historic shifts” for the US, which has now become a consensus between the two major parties.
It is reported that if Trump wins a second term, Colby may be a strong contender for the position of national security advisor in the Trump Cabinet. Colby believes that to counter the new “axis of evil” formed by Communist China, Russia, North Korea, and Iran, mere talks are meaningless, and actual military forces need to be built.
This is Trump’s strategy of “peace through strength.” Colby stated that the US needs to rapidly rebuild its defense industry base to enhance the readiness and deterrence of its military, thus more effectively maintaining peace.
Some observers suggest that Trump chose the “hawkish” Senator Vance as his running mate to strengthen the hardline stance against Communist China. This could mean that a potential second Trump administration may be filled with more hawkish individuals, while Beijing closely monitors this stance and the campaign dynamics of the US 2024 election.
Vance’s rise to prominence has garnered close attention from governments around the world. CNN reported that Trump and Vance’s pairing signals Trump’s “America First” foreign policy, including policies towards China, the world’s second-largest economy, will likely return in a potential Trump administration.
When Vance accepted the vice presidential nomination during the Republican National Convention (RNC) on July 17, he repeatedly mentioned the negative impact of China’s economy on the US.
On the opening day of the RNC on July 15, Vance referred to China as the “greatest threat to our nation” during an interview with Fox News.
Throughout his first four-year term, despite claiming to “respect” and “like” China’s dictator Xi Jinping, Trump engaged in a tech war and trade war with China, viewing the CCP as a competitor and criticizing China’s successes as being at America’s expense.
The current President Biden has essentially continued Trump’s policies towards China, including maintaining the tariffs imposed on numerous Chinese goods by Trump and recently escalating some tariffs. While the Biden administration is working to stabilize relations with Beijing, countering the threat from the CCP remains a cornerstone of its foreign policy.
Considering that both the Biden and Trump administrations have taken an unfriendly stance towards China, with Beijing preferring the predictability of Biden and his potential successor Harris, they also have contingency plans in place for a potential return of Trump.
Brian Wong, a researcher at the University of Hong Kong’s Contemporary China and World Research Center, told CNN, “The Chinese government may be scenario planning and making contingency plans for the anticipated return of a (Trump) administration less inclined towards cooperation and engagement than the current Democratic government.”