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Your guide to what the 2024 US election means for Washington and the world
The writer is a professor at Georgetown University and a senior advisor at the Asia Group. He served on the staff of the US National Security Council in 2009-2015
If Donald Trump’s China policy is defined by uncertainty and contradiction, Xi Jinping’s strategy is defined by clarity and decisiveness. The Chinese president’s approach to the US president-elect is no secret. Beijing has been quite clear since the election about its views and possible responses.
Xi plans not only to respond, but to take advantage of Trump’s moves. During Trump’s first term, Beijing tried to respond. It is determined not to happen again. Xi is well into his preparations and has signaled this.
Most Chinese analysts were not surprised by Trump’s election, linking his return to a global wave of populism and nationalism. Beijing believes it now understands Trump’s mastery of the game and can manipulate his administration. China’s belief is based on the conclusion – correct or not – that China in 2025 is different from 2017, and so is the US and the world.
Many Chinese argue that Xi is stronger politically and the economy is more self-reliant and resilient, even amid recent challenges. Chinese analysts see the US economy as more fragile and US politics as deeply divided. Geopolitically, Beijing sees US influence declining across the global south and Asia – and support for China’s vision is growing.
Xi has already signaled that he will treat his ties with Trump as a purely business relationship, albeit Don Corleone-style. He won’t personally embrace Trump and will retaliate early and hard in order to generate leverage. Beijing actually declined Trump’s invitation for Xi to attend the inauguration.
But Beijing is also signaling it wants dialogue and is open to a deal to avoid new tariffs. However, the Chinese, who prefer to use back channels, are trying to find the right one to understand what Trump “really” wants. Beijing’s basic assumption is that Washington and its allies will remain hostile to China for the foreseeable future. Thus, Xi is open to negotiations because he wants some room on the economic front so that China can marshal its forces for long-term competitiveness.
Beijing remains concerned that the Trump team will focus on deeper economic disengagement, regime change in China and support for Taiwan independence, all as tools to control and destabilize China. Hence Xi’s four “red lines” in a November meeting with President Joe Biden in Peru in a clear message to the next administration.
Beijing’s planned responses to Trump fall into three baskets: retaliation, accommodation and diversification. Mirroring US policies, Beijing in recent years has instituted a series of export controls, investment restrictions and regulatory investigations that could hurt American companies. Beijing is unable to match tariff for tariff, so it will seek to impose costs in ways that cause maximum pain. For China, failure to retaliate would signal domestic weakness and only embolden Trump.
This has already started. By the end of 2024, Beijing blocked the export to the US of critical minerals used to make chips, squeezed the supply chain for US-made drones, threatened to blacklist a high-profile US clothing company and launched a antitrust investigation into Nvidia. By taking such actions, Beijing is anticipating its capabilities and creating future chips.
China’s second strategy is adaptation. From autumn 2023, Beijing launched a powerful fiscal and monetary stimulus to help businesses and now consumers. This policy shift is generating some positive, albeit uneven, impacts. It was certainly much needed, but its purpose and nature were also developed with a possible trade war in mind.
Beijing’s third strategy involves expanding its economic ties. It is debating unilaterally lowering tariffs on imports from non-US partners. On his trip to Peru, Xi inaugurated a deep-water port that could reshape China’s trade with Latin America, a key non-US source of food, energy and minerals. In late 2024, Xi also attended meetings with the heads of 10 major international economic organizations for the first time. His message was clear: China will be the leading force for global economic stability, prosperity and opening, and opposes all forms of protectionism.
A lot can go wrong. Beijing’s confidence matches that of Team Trump. Both sides believe they have the upper hand, can impose more costs and bear more pain. The stage is set for a complicated, destabilizing dynamic that, at best, results in a truce. And that’s just about economic issues, not about Taiwan, the South China Sea, technological competition or nuclear modernization. The Cold War is beginning to look quaint by comparison.
