Analysis: Strategic Solution for the Trade War and Taiwan Strait Tensions Between the US and China

The latest news as of May 13, 2025: The relationship between the United States and China has entered a new round of maneuvering, with a temporary ceasefire in the tariff war, but the systemic confrontation reshaping the US-China trade system continues. The US views the trade war as a tool for reshaping national security and even the global strategic landscape. Simultaneously, geopolitical tensions have not eased, with both the US and China making comprehensive preparations for a possible conflict in the Taiwan Strait. Recent conflicts between India and Pakistan have shown that the West may have underestimated the military power of China, potentially disrupting the military balance in the Taiwan Strait.

Experts on Chinese affairs have suggested that the restoration of diplomatic relations between the United States and the Republic of China could provide a strategic breakthrough, with a potential solution to the Taiwan Strait conflict being the confrontation between “Democratic China” and “Communist China”.

The US and China have reached a phase one agreement in their trade negotiations. According to the results announced by both sides on May 12 (Monday) in Switzerland, tariffs will be reduced by both parties within 90 days to create space for the next key negotiations. The US has lowered tariffs on China to 30% (excluding the 20% tariff on fentanyl), while China has lowered tariffs on the US to 10%. If no trade agreement is reached within the 90-day period, tariffs will rise again. Both sides have agreed to establish a consultation mechanism after taking the above measures to continue negotiations on economic and trade relations.

The temporary ceasefire in the US-China trade war brings everything back to the starting point declared by President Trump on April 2, when he announced a 34% tariff on Chinese goods. According to subsequent policies implemented by the Trump administration, countries willing to negotiate with the US can delay tariffs for 90 days, with tariffs during negotiations set at a base rate of 10%.

US Treasury Secretary Benson summarized the importance of the negotiations during a press conference in Geneva on Monday, May 12, highlighting the establishment of a mechanism for continuous dialogue with China, with processes, plans, and mechanisms in place to ensure this.

Addressing weaknesses in the US supply chain, Benson emphasized that the US will continue to advance strategic rebalancing in multiple sectors. They have identified five to six key strategic industries, including pharmaceuticals, semiconductors, and steel, in the pursuit of self-sufficiency, or reliable supply from allies.

Benson clarified in an interview on Monday that the US is not completely disengaging from all goods, but strategically disengaging from China on products that involve national security interests.

David Huang, a US economic scholar, expressed to a media outlet that the outcome of the US-China trade negotiations was unexpected, as both sides had reached a critical point at which further delays were no longer feasible. The temporary tariff reductions and the establishment of a consultation mechanism reflect the pressure Beijing faced in accepting the US-led structural arrangements, with the US determining the “rules of the tariff game”.

While tensions in US-China trade have eased, the systemic confrontation in trade continues. President Trump mentioned at the White House on Monday that if the US and China do not reach a trade agreement within 90 days, tariffs will escalate, but not to the previous 145%.

Within the US, hawks have long believed that decoupling the economy with the Chinese Communist Party is vital for national security. A video speech by Republican Senator Rick Scott during the US-China negotiations in Switzerland, originally from a forum at Harvard’s Kennedy School of Government on April 23, has been widely circulated. According to an X blogger named Essen, the post has been read over 540,000 times.

Scott stated during the forum, “The only way to avoid a war with Communist China is to destroy their economy. As long as they have money, we’ll be at war.”

He emphasized that trade relations with the CCP should cease because “every time you buy something from China, you’re funding their government to build a military to strip you of your freedom, and that’s what they’re doing.” He continued, “They have more warships than we do, and a larger army.”

Peter Navarro, a hawkish figure in the Trump administration’s trade policy, shares a similar view with Scott. Navarro distrusts any commitments made by the CCP, advocating for a tough tariff policy against China to address non-tariff barriers, currency manipulation, and systematic subsidies to their domestic capital. His absence from the Switzerland negotiations is seen as Trump’s temporary easing of trade tension.

During the US-China trade negotiations, the India-Pakistan conflict has drawn global attention. Multiple sources have confirmed that in the air battles on May 7, Pakistan utilized Chinese J-10C fighter jets, PL-15 air-to-air missiles, early warning aircraft, and ground-based air defense radars, successfully shooting down several Indian fighter jets, including the advanced French Rafale.

This marked the world’s first large-scale long-range air combat under the leadership of a shared data chain, with all engagements occurring beyond the range of radar detection of the fighter aircraft themselves. Pakistan’s victory was attributed to their comprehensive shared data chain system, where early warning aircraft, fighter jets, air-to-air missiles, and ground-based air defense radars are all Chinese-made and capable of high-speed data sharing, forming a systematic combat pattern. In contrast, Indian weapons are of multi-national origin, leading to weaker integration of data chains, putting them at a disadvantage in beyond-visual-range combat.

The outcome of this conflict has prompted the US to reassess the military threat posed by China, with many self-media bloggers suggesting that the rise of Chinese military technology has altered the strategic balance in the Taiwan Strait, placing Taiwan’s existing air defense capabilities under severe strain.

Shu Xiaohuang, Deputy Researcher at the Taiwan Institute of National Defense and Security Studies, expressed to the United Daily News that China emphasizes the development of “systematic combat” capabilities, as demonstrated by the recent performance of China and Pakistan. The Taiwanese military is relatively lagging in this aspect, especially with aging active early warning aircraft, and the US’s reluctance to sell the new generation E-2D could result in an aerial combat imbalance in the Taiwan Strait.

Shu suggested that the Taiwanese military needs to introduce the E-2D early warning aircraft, integrate communication chains with F-16s, and enhance shipborne and ground-based air defense systems to achieve comparable capabilities.

The trade war between the US and China and the risk of geopolitical conflict have made the Taiwan Strait a potential flashpoint for a hot war. On May 9, Zhao Lanjian, a former senior Chinese media professional, posted on X that a military informant disclosed an internal purge within the PLA as a filtering mechanism for war. Xi Jinping will eliminate those who do not obey or dare to not attack Taiwan, replacing them with “iron-blooded generals” ready for action. The informant suggested that Xi Jinping is determined to attack Taiwan, with the war being inevitable in as soon as a year or up to three years.

Zhao’s source gained fame for first revealing the arrest of PLA deputy chairman He Weidong, while this recent disclosure regarding Xi Jinping’s initiation of a Taiwan Strait war has garnered international attention.

Recently, the US military has been issuing warning signals frequently. Indo-Pacific Command Commander Paparo publicly stated on May 2 that he might become the US military commander engaging with China over the Taiwan issue. Paparo emphasized that the US currently has the capacity to defeat China, but with the rapid expansion of China’s military capabilities, the challenge is growing.

Simultaneously, on May 1, the CIA released two Hollywood-style promotional videos openly recruiting dissatisfied individuals within the Chinese regime, signaling for internal collapse of the Chinese political system.

The Washington Post previously reported in March that Secretary of Defense Haggis had prioritized deterring China from seizing Taiwan and strengthening US homeland defenses.

Fu Shenqi, an editor of “Spring of China” (Wenhui), pointed out that the US has been preparing comprehensively for a potential conflict in the Taiwan Strait. Therefore, strategically reactivating the international status of the Republic of China at the strategic level is not only necessary but also a key element for Taiwan’s victory.

Fu suggested that while the trade war may weaken China, it cannot address the fundamental systemic confrontation between the US and China. Only by leading to the collapse of the CCP and promoting democratization in China can true conflict resolution be achieved.

To this end, Fu advocated for the US to advance a policy of “dual recognition”, restoring formal diplomatic relations with the Republic of China to reestablish its presence on the international stage, facilitating the confrontation between “Democratic China” and “Communist China”, which could directly shake the foundation of the CCP regime, leading to internal reforms within the CCP and changing the geopolitical landscape.

Prominent scholar Hu Ping also wrote on X on May 10 that to ensure Taiwan receives its due international status, the only way is for countries like the US to directly establish (or restore) formal diplomatic relations with the Republic of China. He cited constitutional and international law analysis, suggesting that due to overlapping sovereignty between the two sides, the Republic of China and the CCP regime are not “two countries” but rather “one country, two systems”.

In fact, from 1949 to 1971, the Republic of China was widely recognized as representing “China” in the international community, providing historical precedence for the restoration of diplomatic relations with the Republic of China.

On May 9, the US-based “Citizen Alliance of the Republic of China” sent an open letter to the US Congress, urging the US to restore diplomatic relations with the Republic of China and acknowledge the current “one country, two systems” status.

The alliance advocates prohibiting any party from changing the status quo through the use of force, encouraging peaceful competition between both sides of the strait to prompt the internal collapse of the CCP regime. Through the constitutional mechanisms of the Republic of China, this could pave the way for future democratic transformation on the mainland.