… Rebuilding American Strength Will Take Buy-In at Home and Abroad—and From Trump Himself
Predicting the incoming Trump administration’s China policy— and China’s likely response—is a guessing game. In his first term as president, Donald Trump’s transactional approach often differed from his team’s competitive approach. Those contrasting impulses will define his second term. But despite the uncertainty surrounding the Trump administration’s approach, the central challenge it faces is clear: positioning the United States to outcompete China as a critical window in the competition begins to close.
Early in the Biden administration, senior officials got together, read the intelligence, and concluded that the 2020s would be the decisive decade in U.S. competition with China. Without corrective action, the United States faced a growing risk of being surpassed by China technologically, dependent on it economically, and defeated militarily in the South China Sea or the Taiwan Strait.
The new Trump team will take the United States through the second half of the decisive decade. There is much to be done. Trump’s national security picks, particularly Mike Waltz as national security adviser, Marco Rubio as secretary of state, and Elise Stefanik as ambassador to the United Nations, understand the task ahead and have views consistent with a growing bipartisan consensus on the need to outcompete China. Their most significant obstacle in carrying out a competitive approach may be Trump’s own penchant for dealmaking, transactionalism, and flattery toward President Xi Jinping, which sometimes undercut his staff’s more hard-line approaches, including the expansion of export controls and a vocal defense of human rights, among other measures, the first time around.
If Trump’s new team can overcome that challenge, they will have an opportunity to improve America’s competitive position. Closing the gap during the decisive decade may call for building on the work of President Joe Biden, just as the Biden team built on the work of the Trump administration. The Biden administration focused on rebuilding American strength by focusing on its foundations at home and its relationships with partners abroad, an approach summed up in its “invest, align, compete” tagline. That formula can also serve as a way to fulfill the Trump administration’s vision of “peace through strength.” But rebuilding American power will require the Trump administration to undertake new efforts, too, that depend on bipartisan congressional support and the buy-in of the American public.
Strength Starts At Home
Some of the most urgent questions about U.S. China policy turn on questions about domestic policy, which provides the basis for American strength. But the foundations of that strength have atrophied, especially since the end of the Cold War. The administration will need to undertake significant structural reforms to remedy these weaknesses.
The United States needs to fix its defense industrial base to rapidly deter China and, if necessary, defeat it in a potential conflict. At present, the United States would expend all its munitions within a week of sustained fighting and would struggle to rebuild surface vessels after they were sunk, with a national shipbuilding capacity less than that of one of China’s larger shipyards. The Trump administration must focus on making progress on two timelines: the two-year problem of fielding more uncrewed systems and cruise and ballistic missiles in the Indo-Pacific, as well as the five-to-ten-year problem of revitalizing the United States’ shipbuilding industry, which has been declining for decades without an adequate commercial sector to keep it viable.
Washington also needs to protect its critical infrastructure from cyberattack. China has compromised U.S. critical infrastructure on which millions of Americans rely, including water and gas, transportation, and telecommunications systems, with the aim of inciting chaos, sowing panic, and reducing U.S. will in a conflict scenario. As it invests in offensive capabilities, the Trump administration will also need to bolster American defenses through a combination of regulatory measures, new legislation holding companies accountable for lackluster cyberdefenses, and novel technical efforts that can complicate the abilities of bad actors to penetrate U.S. networks.
Finally, the United States needs to invest in reindustrialization and technological leadership. China already accounts for more than 30 percent of global manufacturing, can innovate successfully, increasingly leads in the sectors of tomorrow, and is redirecting massive amounts of capital into manufacturing as its housing market stagnates. The result, a second “China shock” akin to the one that flooded U.S. markets with cheap Chinese goods at the beginning of this century, will threaten the United States’ future as an industrial power and leave it more dependent on China than China is on the United States. Addressing this problem will require not only tariffs but also industrial policies to stimulate manufacturing and high-tech industry and coordination with allies and partners. Punitive measures directed at allies, such as tariffs, will complicate the United States’ ability to enlist them in efforts to protect against China’s excess capacity.
To advance this domestic agenda, the Trump administration cannot rely only on executive branch authorities. It will need significant bipartisan congressional support. The Biden administration approached some major domestic initiatives in this fashion, including through its infrastructure bill and the CHIPS and Science Act, and the Trump administration could do the same.
The Trump administration will also need to mobilize the American public. Since the 9/11 attacks in 2001, every American president has given a primetime address from the Oval Office on some aspect of Middle East policy. None have done so on China. Trump may consider an address to the nation on China policy, but how he frames the nature of the competition with China will matter more than whether he delivers such a speech. With a clear-eyed but not demagogic tone, stressing competition but not necessarily confrontation, and linking competition with China directly to the interests of Americans, Trump could rally the American public, civil society, academia, and the corporate sector behind the administration’s efforts.
Strength In Numbers
The China challenge is in part about scale. China is four times the size of the United States in population. It is the world’s leading industrial state and the largest trading partner of over 100 countries. For the United States to compete, it needs to achieve scale of its own. The best path to rivaling China’s size will run through allies and partners.
American strength flows from the country’s rich network of alliances and partnerships. In addition to fixing structural problems at home, the Trump administration will need to deepen its coordination with friendly countries in two key areas: economics and technology, and security.
To avoid a second China shock and create conditions conducive to reindustrialization, the administration will need to pool allies’ and partners’ markets and align with them on tariff and regulatory approaches that protect Western industry. And to retain leadership in technology, it will need to cooperate on export controls to prevent sensitive technology from falling into China’s hands.
To deter China’s aggression in the Taiwan Strait or the South China Sea, the Trump administration should build on the Biden administration’s collaborative successes in the region, which included AUKUS, a trilateral security partnership to provide Australia with nuclear submarine capability; the Quad, which brought the United States, Australia, India, and Japan together; and efforts to diversify the footprint of U.S. military forces across Australia, Japan, Papua New Guinea, the Philippines, and elsewhere. The latter measure blunted the risk China’s missile systems pose to U.S. forces near China and allowed the United States to operate more flexibly and resiliently. Deterrence also calls for providing allies and partners with asymmetric capabilities through arms sales and by positioning U.S. capabilities on their soil, as the United States recently did by deploying the Typhon missile system in the Philippines, in order to create costs for Chinese aggression. And finally, it almost certainly will require working with allies and partners to increase the economic and political costs for China’s adventurism in Asia, including through coordinated sanctions and statements in response to Chinese military activity. None of these steps are possible if the United States goes it alone.
Whether the Trump administration is able to achieve cooperation on these priorities depends on how they approach allies and partners. European leaders, for good reason, fear that Trump will levy tariffs on European countries’ economies, cut military assistance to Ukraine, pressure Europe to increase defense spending, and possibly pursue its own form of détente with Russia in the hope that increased U.S. engagement could weaken the Chinese-Russian relationship. Administration officials should use their leverage over European countries to bring about a broader realignment in the transatlantic relationship, one that ensures that Europe bolsters its defenses, increases support for Ukraine, and imposes tougher economic and technological measures on China, such as on export controls, in coordination with the United States. This approach would be wiser than pushing for a package of immediate and flashy short-term concessions that would damage alliances without realigning them meaningfully. Similarly, in Asia, Trump’s first-term congressio
threats to withdraw U.S. troops from allied countries, demand more payment for U.S. bases, or abandon U.S. defense commitments were grounded in real U.S. leverage. But they ignored the fact that American allies in the region must attend to their own domestic political situations, in which voters often react negatively to public pressure from the United States. A subtle approach to enlist them in the administration’s China strategy will be more effective.
Threats, Bluffs, And Promises
Beijing, for its part, is already taking steps to prepare for the incoming administration. It is deeply concerned about Trump’s threat to levy 60 percent tariffs on Chinese goods and has already signaled it is prepared to retaliate with tariffs, export controls, and sanctions of its own, as well as crackdowns on U.S. companies operating in China. If Chinese officials believe retaliation will provoke further escalation from Trump, they may be restrained, mirroring their behavior in the trade war during Trump’s first term. If they believe, however, that retaliation may cause the Trump administration to back down for fear of rising inflation or risks to key American companies, then they are more likely to respond forcefully, perhaps even seeking to escalate to de-escalate, a tactic previewed by Beijing in its targeting of Micron, an American semiconductor manufacturer, and its recent use of export controls on rare earth elements in response to U.S. export controls. But there is a third possibility: if Trump levies a 60 percent tariff early in his presidency and shows limited interest in negotiation, and China concludes that the risks to its economy (and Xi’s reputation) are existential and intolerable, then Beijing may have no choice but to respond forcefully, regardless of the expected American response.
It’s unclear whether the Trump administration’s tariff threat is a negotiating tactic intended to achieve a change in China’s behavior, a nonnegotiable U.S. policy intended to achieve decoupling, or a mix of both. For Beijing, the best outcome may be to hope for the former and, through a mixture of retaliation and personal diplomacy, push for a bargain that might include trade, technology, and even counternarcotics measures. To increase the odds of such an outcome, Beijing may initially retaliate against companies with close ties to Trump, including Elon Musk’s Tesla, in order to incentivize de-escalation. Chinese officials may also seek to split Trump from his more hard-line staff and play to his direct self-interest, as they did in negotiations following the start of the U.S.-Chinese trade war during his first term. Their strategy resulted in Trump downplaying China’s crackdown against protesters in Hong Kong, expressing support for its internment camps in Xinjiang, offering to lift export controls on Huawei and ZTE, and even accepting a trade deal that did not address China’s industrial policy practices. Given this history, the possibility that Beijing suggests a grand bargain to Trump in which semiconductor export controls and other would-be nonnegotiable U.S. policies, potentially including U.S. Taiwan policy, are negotiated directly with Beijing should particularly concern the administration’s more competitively inclined staff. Such a proposal should be rejected.
Continues in FOREIGN AFFAIRS (www.foreignaffairs.com), November 29, 2024.
