Trump’s election victory and the end of the German government coalition have raised many questions over the past week. Today, we intend to look at some of them. For instance, German companies in China need to ask themselves specifically what impact Trump’s tariff threat on Chinese imports will have. Both on the Chinese economy and on their own supply chains. And how can a German economy that was already emotionally devastated before the German government’s split get back on its feet?
Jörg Wuttke fears that the German industry in China may be facing a lame-duck period. In an interview with Julia Fiedler, the former President of the European Chamber of Commerce explains what he now expects based on his 25 years of experience in China.
Trump’s second term in office is also anxiously anticipated in Taiwan. It was the last East Asian democracy to congratulate the election winner – a sign of uncertainty. Yet, all in all, Trump’s first term in office was very positive for the island republic. David Demes explains what politicians, experts and observers expect from the new Trump cabinet and the Taiwanese government itself.
And in today’s opinion piece, Angela Huyue Zhang takes a step back and tries to identify the root cause of the conflict between the US and China. She argues that the freedom a US president can exercise in foreign policy has increased. Ironically, this reminds her of the consolidation of power in China. She warns against further containment of China as this could harm the US in the long term.
Have a good start to the week!
Donald Trump has been elected as the next president of the United States. What does this mean for China – and for German companies in the country?
That depends entirely on how far Trump implements what he announced during the election campaign. The general rule in Washington is that although everything he says sounds terrible, he will probably follow through on it. He owes it to his voters. So, tariffs of 60 percent on Chinese products are likely to happen. The only question is: Will they come in one big bang, or in increments? In other words, one quarter in 2025, one quarter in 2026, and one quarter will be exempt from the tariffs because these areas are too price-sensitive for the lower classes. I expect the measures to come into effect over two to three years.
How strongly will the tariffs affect China?
With China selling goods worth 430 billion US dollars to America, the Chinese economy will feel the impact. The big economic picture will certainly be somewhat clouded for the time being. Companies will reduce their investments somewhat. However, they will step on the pedal when it comes to exports so that they can ship as many cars or other goods abroad as possible before Trump enforces the tariffs. After that, exports will fall. It will look very cyclical.
German automotive companies will probably stick to their investment plans. They will first look at where the tariffs will be implemented first. Will it be in the electronics sector, or will mechanical engineering be affected? The affected products will probably be challenging to sell, and investments in China will be less worthwhile. We will also have to look at the extent to which Chinese customers of German companies are affected.
Apart from this, in which other areas will problems occur?
Particularly in supply chains. We are now in the so-called lame-duck period until mid-January and over 70 legislative proposals are being discussed in Washington during this phase. Many in the area of artificial intelligence, many in China, including the Biosecure Act. This will make it very difficult for American companies to work with Chinese companies in biotechnology. The other will be the Countering CCP Drones Act, which is aimed at DJI in Shenzhen. Many German companies are also involved as suppliers. The USA is expected to issue legislation making it impossible for DJI to fly on American communication channels.
The other issue will be an Investment Screening Act for American companies. Although it won’t affect German companies directly, Trump will certainly come to Berlin or Brussels next year with all these ideas he is implementing – with tariffs and investment screening. And then perhaps he will say: If you want me to support you in Ukraine, you have to support me against China. I assume the pressure will be extremely high, whether we like it or not.
Should we fear a deepening rift between the markets?
Decoupling will certainly continue to increase. The Chinese started it, the Americans brought it to the fore, the Europeans tried to counter it with derisking. The trade volume between America and China will decline as a result. And that will lead to the Chinese pushing their overcapacity onto other world markets, including the European market. That will be a big problem for all of us. We will have to wait and see how the Chinese react. Will they impose punitive tariffs on American products, or will they respond to the tariffs by lowering the renminbi somewhat? That would make Chinese products even cheaper in Europe and thus even more competitive.
How can German companies minimize their risk?
The “in China for China” strategy is certainly one way of dealing with this. China is a large market. However, our problem in China is that market access is still very difficult, and the economic outlook is nowhere near as positive as it is in the USA. So that will also be an issue: How will the American economy develop? My assessment so far has been that the Germans are doing extremely well in the USA, while in China, they are bringing out ever bigger position papers due to trade barriers.
In the USA, however, German companies have the problem that they cannot find enough workers, especially in the low-wage segment. We have to see how this develops and how companies react. Will there be a shift towards America and away from China because supply chains are becoming difficult and China’s economy will continue to stagnate?
In any case, I don’t believe that we can abandon America. The USA is too big a trading partner, as are the investments. “In America, for America” can also be a strategy. German workers are in the middle and may have to watch investments migrate to America because its economy is booming. The dollar is strong. And Trump, like Biden, will encourage investment in the manufacturing sector. Lastly, we also need to look at the areas where trade distortions affect third markets.
You mentioned third markets. Is it possible that they could absorb overcapacity from China, for example?
China currently exports around five million cars, with only half a million going to Europe, mostly EVs. They mainly export gasoline cars to the other markets. And that’s where they become competition for us, which we don’t want. South America, Africa and Oceania are not typical EV markets. There will undoubtedly be cut-throat competition for combustion engines there. We have to see to what extent the Chinese will also act as investors there, for example in Thailand, Turkey and Brazil. Russia has already become a monopoly market for China.
Let’s get back to Trump. What reactions have you heard from companies in China?
There is a lot of unrest, but it is directed more inwards: How is the economy doing? Will the real estate crisis continue? Will the Chinese government slowly come out of its corner? The main concerns are more about China’s economy itself, which is surprisingly weak and where you can see that the government’s normal, rapid response over the last two years has been very different from the previous decades.
Will the collapse of the German government coalition also affect companies?
The end of the German government coalition causes further uncertainty and uncertainty always leads to restrained investment. There is no planning security, which has been a longstanding problem because of the back and forth in the government. Moreover, we currently have the politically weakest Europe we have ever had. We will have to see what happens between now and March, but we are looking at an extreme lame-duck period. The German economy is already emotionally at rock bottom anyway. That’s not good. We need a shot of optimism, and we need to see if a new government can spread it. Will China continue to look at Germany? Definitely. The size of the market and the importance of German politics in Europe will not diminish drastically. We will see who the successor in Berlin is and to what extent Germany will be more in line with America. A lot can still happen between January 20 and the end of March.
Joerg Wuttke has been a partner at Dentons Global Advisors-Albright Stonebridge Group in Washington for several months. Previously, he was Managing Director and Chief Representative of BASF China and President of the European Chamber of Commerce in Beijing. Wuttke lived in China for over 25 years.
Japan, South Korea, the Philippines, Malaysia, Indonesia and Singapore: All democracies of East and Southeast Asia had already congratulated Donald Trump on his election victory on Wednesday afternoon. Taiwan, on the other hand, waited until the evening to send its congratulations – too long, some observers criticized.
“What were we waiting for?” asked former DPP MP and political scientist Lo Chih-Cheng in Taipei on Saturday. “We don’t need to compare ourselves with Vietnam, China and North Korea, but among all other countries in the region, Taiwan’s congratulations came last.” Trump’s victory presents Taiwan with major challenges that require a more sensitive approach to foreign policy, Lo said.
According to CNN, Taiwan’s representative to the US, Alexander Yui, reportedly handed Trump’s former National Security Advisor Robert O’Brien a letter for Trump at a private lunch in Utah. Neither O’Brien nor Taiwan’s official representative wanted to comment on the story.
Taiwan’s presidential office also denied a Bloomberg report on Thursday that an attempt had been made to arrange a phone call between President Lai Ching-te and Trump. After his first election victory in 2016, Trump broke with diplomatic conventions and accepted a call from then-Taiwanese President Tsai Ing-wen.
Taiwan’s late congratulations show that Trump’s election victory is causing uncertainty in the island republic. His comments about “protection money” and the alleged theft of the American semiconductor industry raise doubts about whether the billionaire will defend Taiwan in the same way as his predecessor, Joe Biden. Biden had repeatedly declared that he would support Taiwan in the event of a Chinese attack, thus ending the decades-long US doctrine of “strategic ambiguity.”
“We survive because we are paranoid. Taiwanese are worried by nature,” commented Chen Ming-chi, former head of the state think tank for defense issues INDSR, on Trump’s election victory. However, he added that China is also concerned, especially about bilateral trade relations. “The situation of the Chinese economy is very different from the situation during Trump’s first term,” explained Chen.
According to Chen, China’s economy is in a much worse state today than it was in 2016. Nevertheless, he warns of a possible “grand bargain,” a deal between China and the US in which Taiwan could be sacrificed for Chinese concessions in trade relations. According to the sociologist, it is doubtful whether Trump is aware of Taiwan’s geostrategic importance. On the other hand, Lo Chih-Cheng does not believe in such a deal. “Still, we must be ready for anything,” said the DPP politician on Saturday.
In fact, Trump’s first term in office was generally very positive for Taiwan. The trade war and the general skepticism towards China in the US played into the hands of the government in Taipei. Overall, the US pursued a very pro-Taiwan policy under Trump. However, DPP politician Lo notes this was mainly thanks to Trump’s team and not the president himself. “During his first term, Trump didn’t know much about foreign policy. His team therefore had greater influence.” Lo particularly highlighted former Secretary of State Mike Pompeo and National Security Advisor John Bolton, who are regarded as China hawks in Washington.
Taiwan is eagerly anticipating who Trump will choose for his new cabinet. Any hopes that Pompeo or former UN ambassador Nikki Hailey could take on important posts were dashed over the weekend by Trump himself. Both had made high-profile trips to Taiwan after the end of their term in office. Former Secretary of State Pompeo had even called for the establishment of full diplomatic relations with Taiwan.
According to media reports, former National Security Advisor and Taiwan friend Robert O’Brien will also not be part of the new cabinet. However, Elbridge Colby is still in the running. The Republican worked as Deputy Secretary of Defense for Strategy and Force Development during Trump’s first term. Colby has distinguished himself in recent years as a fierce critic of US security policy. He also has nothing good to say about Taiwan’s government.
Colby argues that the US should abandon its focus on Russia and Ukraine in favor of China. He sees the People’s Republic as the biggest challenge for the US today. He repeatedly criticizes Taiwan for its solidarity with Ukraine. In April, Colby wrote on Twitter/X that Taiwan must show the “war-weary American public your seriousness in your self-defense. There are doubts. Don’t worry about as much about a war half a world away as your own fate. Anything less suggests a lack of seriousness.” If Colby is chosen for Trump’s cabinet, the US will likely step up the pressure on Taiwan to do more to bolster its own defense.
However, it is unclear how this could work in practice. The Taiwanese parliament and, consequently, the budget are controlled by an opposition that favors rapprochement with China. Under these circumstances, increasing the defense budget seems more than unlikely. This could further complicate relations with the USA under Trump.
In his congratulatory message, Taiwan’s President Lai emphasized the long-standing partnership based on shared values and interests. Lo also repeatedly spoke of “interests” on Saturday in Taipei. In its communication with the Trump administration, Taiwan must emphasize how it can serve the national interests of the US and not just focus on universal values and democratic ideals, he said. “We must make it clear how it would harm American interests if Taiwan were to be annexed by China,” Lo argues.
Trump ‘s transactional character, i.e. his tendency to see all relationships as a zero-sum game, could also be advantageous for Taiwan, argues political scientist Lo. The interests of the US are not only military, but also economic and technological in nature. “So the US wants protection money from us? Okay, then let’s make a shopping list for weapons systems. Let’s see if you’re willing to sell them to us?” Lo asks mockingly. Every crisis is also an opportunity, says the former DPP MP.
Lo also calls for Taiwan to join forces with like-minded countries such as Japan and Europe to exert influence on the US. “This is the only way we can communicate our concerns more effectively.” One of these countries could also be the Philippines.
Manila has reacted highly positively to Donald Trump’s election victory. This is likely due to the ongoing threat from China in the West Philippine Sea, where Chinese militias and Coast Guard are behaving increasingly aggressively. Under President Marcos Jr., Manila has taken a decisive stance against these violations compared to his predecessor Duterte and wants stronger support from the US – as a treaty partner and protecting power. “During Trump’s first term, especially in the second half, his policy was characterized by a clear anti-China stance. Therefore, It is natural that the Philippine government places high hopes in a second Trump term,” Chen Ming-chi told Table.Briefings.
Chen also emphasized that the US had provided extensive support under Biden, for example, by establishing military bases in northern Luzon and involving Japan in trilateral cooperation with the Philippines and the US. “In recent years, the US has contributed to a rapprochement between the Philippines and Taiwan. The further development of these relations depends largely on the US government’s stance on security in the Western Pacific,” Chen added.
In August 2019, amid an escalating trade war with China, then-US President Donald Trump fired off a series of tweets directing American companies to “immediately start looking for … alternative[s] to China” and shift their manufacturing back to the United States. The demand sent stock markets into a tailspin and alarmed US businesses with exposure to China.
While Trump ultimately softened his stance, the threat underscored a disturbing reality that the world must face now that he is returning to the White House: The president has the power to sever ties with the world’s second-largest economy, and can do so on a whim.
With Trump’s resounding victory over Kamala Harris, the specter of his impulsive, heavy-handed approach to diplomacy looms large. If his past actions are any indication, corporate America might soon be bracing for another round of erratic, high-stakes maneuvers – or worse – against China.
The US Constitution delegates authority over foreign relations to both the president and Congress, a structure designed to temper executive discretion with legislative oversight. But this balance has shifted dramatically in recent decades. Foreign policy is now overwhelmingly concentrated in the executive branch and goes largely unchecked, a trend that political scientists attribute to a rise in partisanship and a decline in congressional expertise. And with both parties favoring a hardline approach toward China, Trump will have even more freedom to lash out at the country.
Meanwhile, “national security” has proven to be remarkably pliable, extending far beyond traditional concerns such as homeland defense and cybersecurity. It now covers everything from cross-border data flows and supply-chain vulnerabilities to protecting industries deemed too critical to be dominated by foreign competitors.
This broadened definition has enabled presidential actions that would have been unimaginable only a decade ago. Consider some of the measures taken by Trump and his successor, Joe Biden: sanctioning Huawei and ZTE; banning TikTok; blocking Chinese investment in a dating app; launching the controversial “China Initiative” that disproportionately targeted Chinese scientists working in the US; imposing a semiconductor embargo on China; restricting US investment in Chinese artificial intelligence and quantum computers; and, most recently, slapping 100 percent tariffs on Chinese electric vehicles and batteries.
Many of these aggressive policies should be implemented only in emergencies. But what constitutes an “emergency” has also expanded considerably and now includes curbing China’s rise. And when Trump takes office in 2025, the executive branch’s capacity and willingness to declare an “emergency” and impose extraordinary measures under the banner of “national security” could increase substantially.
While US courts have the authority to check presidential powers – as they did in blocking Trump’s attempts to ban TikTok and WeChat – they have limited oversight of foreign policy. On matters of national security, in particular, federal courts have historically been very deferential – even more so when Congress and the president are aligned. The recent passage of the TikTok legislation illustrates how Congress can quickly restore executive power after a judicial ruling constrains it. As a result, TikTok and other Chinese companies are constantly contending with renewed hostility from the executive, like an endless game of Whac-A-Mole.
Ironically, this concentration of power in the US presidency mirrors the Chinese governance model that American leaders criticize so sharply. As I show in my book, High Wire: How China Regulates Big Tech and Governs Its Economy, the consolidation of political power in China over the past decade has often led to dramatic policy swings that undermine investor confidence and dampen entrepreneurship. The Chinese government’s recent missteps – from mismanaging the COVID-19 pandemic to crackdowns on the tech and property sectors and now a sluggish response to mounting deflation risks – should serve as a cautionary tale.
The US is likewise beginning to feel the unintended consequences of its own hostile approach toward China. The China Initiative has led to an exodus of talented Chinese scientists, many of whom have returned home. Meanwhile, the effectiveness of tough US sanctions and export controls is waning. Huawei, which initially struggled under these measures, has grown stronger of late, invigorated by state support and a firm resolve to achieve self-sufficiency. In its efforts to contain China, the US risks creating a more resilient rival – one strengthened by the very pressures meant to suppress it.
But instead of reassessing the efficacy of its hardline tactics, US agencies are doubling down on sanctions and restrictions. Even the notorious China Initiative, despite being “discontinued,” persists in a barely concealed form.
So far, much of the discussion about the Sino-American rivalry has framed China’s rise as the primary catalyst for US policy shifts. But this misses a crucial point: The conflict can also be traced back to a democratic deficit in American foreign policymaking. If the US takes increasingly extreme measures to contain China, as it likely will during Trump’s second administration, it risks widening that deficit – and becoming defined by what it opposes.
Angela Huyue Zhang, Professor of Law at the University of Southern California, is the author of High Wire: How China Regulates Big Tech and Governs Its Economy (Oxford University Press, 2024) and Chinese Antitrust Exceptionalism: How the Rise of China Challenges Global Regulation (Oxford University Press, 2021).
Copyright: Project Syndicate, 2024.
www.project-syndicate.org
Editorial note: Now more than ever, discussing China means controversial debates. At China.Table we want to reflect the diversity of opinions to give you an insight into the breadth of the debate. Opinions do not reflect the views of the editorial team.
It’s 11.11. – which means a flood of packages in China on Singles’ Day. E-commerce platforms like Alibaba, Tmall, JD.com and have already been running special deals for the past few days. This year, US retailers were also allowed to sell via AliExpressDirect for the first time.
Trump’s election victory and the end of the German government coalition have raised many questions over the past week. Today, we intend to look at some of them. For instance, German companies in China need to ask themselves specifically what impact Trump’s tariff threat on Chinese imports will have. Both on the Chinese economy and on their own supply chains. And how can a German economy that was already emotionally devastated before the German government’s split get back on its feet?
Jörg Wuttke fears that the German industry in China may be facing a lame-duck period. In an interview with Julia Fiedler, the former President of the European Chamber of Commerce explains what he now expects based on his 25 years of experience in China.
Trump’s second term in office is also anxiously anticipated in Taiwan. It was the last East Asian democracy to congratulate the election winner – a sign of uncertainty. Yet, all in all, Trump’s first term in office was very positive for the island republic. David Demes explains what politicians, experts and observers expect from the new Trump cabinet and the Taiwanese government itself.
And in today’s opinion piece, Angela Huyue Zhang takes a step back and tries to identify the root cause of the conflict between the US and China. She argues that the freedom a US president can exercise in foreign policy has increased. Ironically, this reminds her of the consolidation of power in China. She warns against further containment of China as this could harm the US in the long term.
Have a good start to the week!
Donald Trump has been elected as the next president of the United States. What does this mean for China – and for German companies in the country?
That depends entirely on how far Trump implements what he announced during the election campaign. The general rule in Washington is that although everything he says sounds terrible, he will probably follow through on it. He owes it to his voters. So, tariffs of 60 percent on Chinese products are likely to happen. The only question is: Will they come in one big bang, or in increments? In other words, one quarter in 2025, one quarter in 2026, and one quarter will be exempt from the tariffs because these areas are too price-sensitive for the lower classes. I expect the measures to come into effect over two to three years.
How strongly will the tariffs affect China?
With China selling goods worth 430 billion US dollars to America, the Chinese economy will feel the impact. The big economic picture will certainly be somewhat clouded for the time being. Companies will reduce their investments somewhat. However, they will step on the pedal when it comes to exports so that they can ship as many cars or other goods abroad as possible before Trump enforces the tariffs. After that, exports will fall. It will look very cyclical.
German automotive companies will probably stick to their investment plans. They will first look at where the tariffs will be implemented first. Will it be in the electronics sector, or will mechanical engineering be affected? The affected products will probably be challenging to sell, and investments in China will be less worthwhile. We will also have to look at the extent to which Chinese customers of German companies are affected.
Apart from this, in which other areas will problems occur?
Particularly in supply chains. We are now in the so-called lame-duck period until mid-January and over 70 legislative proposals are being discussed in Washington during this phase. Many in the area of artificial intelligence, many in China, including the Biosecure Act. This will make it very difficult for American companies to work with Chinese companies in biotechnology. The other will be the Countering CCP Drones Act, which is aimed at DJI in Shenzhen. Many German companies are also involved as suppliers. The USA is expected to issue legislation making it impossible for DJI to fly on American communication channels.
The other issue will be an Investment Screening Act for American companies. Although it won’t affect German companies directly, Trump will certainly come to Berlin or Brussels next year with all these ideas he is implementing – with tariffs and investment screening. And then perhaps he will say: If you want me to support you in Ukraine, you have to support me against China. I assume the pressure will be extremely high, whether we like it or not.
Should we fear a deepening rift between the markets?
Decoupling will certainly continue to increase. The Chinese started it, the Americans brought it to the fore, the Europeans tried to counter it with derisking. The trade volume between America and China will decline as a result. And that will lead to the Chinese pushing their overcapacity onto other world markets, including the European market. That will be a big problem for all of us. We will have to wait and see how the Chinese react. Will they impose punitive tariffs on American products, or will they respond to the tariffs by lowering the renminbi somewhat? That would make Chinese products even cheaper in Europe and thus even more competitive.
How can German companies minimize their risk?
The “in China for China” strategy is certainly one way of dealing with this. China is a large market. However, our problem in China is that market access is still very difficult, and the economic outlook is nowhere near as positive as it is in the USA. So that will also be an issue: How will the American economy develop? My assessment so far has been that the Germans are doing extremely well in the USA, while in China, they are bringing out ever bigger position papers due to trade barriers.
In the USA, however, German companies have the problem that they cannot find enough workers, especially in the low-wage segment. We have to see how this develops and how companies react. Will there be a shift towards America and away from China because supply chains are becoming difficult and China’s economy will continue to stagnate?
In any case, I don’t believe that we can abandon America. The USA is too big a trading partner, as are the investments. “In America, for America” can also be a strategy. German workers are in the middle and may have to watch investments migrate to America because its economy is booming. The dollar is strong. And Trump, like Biden, will encourage investment in the manufacturing sector. Lastly, we also need to look at the areas where trade distortions affect third markets.
You mentioned third markets. Is it possible that they could absorb overcapacity from China, for example?
China currently exports around five million cars, with only half a million going to Europe, mostly EVs. They mainly export gasoline cars to the other markets. And that’s where they become competition for us, which we don’t want. South America, Africa and Oceania are not typical EV markets. There will undoubtedly be cut-throat competition for combustion engines there. We have to see to what extent the Chinese will also act as investors there, for example in Thailand, Turkey and Brazil. Russia has already become a monopoly market for China.
Let’s get back to Trump. What reactions have you heard from companies in China?
There is a lot of unrest, but it is directed more inwards: How is the economy doing? Will the real estate crisis continue? Will the Chinese government slowly come out of its corner? The main concerns are more about China’s economy itself, which is surprisingly weak and where you can see that the government’s normal, rapid response over the last two years has been very different from the previous decades.
Will the collapse of the German government coalition also affect companies?
The end of the German government coalition causes further uncertainty and uncertainty always leads to restrained investment. There is no planning security, which has been a longstanding problem because of the back and forth in the government. Moreover, we currently have the politically weakest Europe we have ever had. We will have to see what happens between now and March, but we are looking at an extreme lame-duck period. The German economy is already emotionally at rock bottom anyway. That’s not good. We need a shot of optimism, and we need to see if a new government can spread it. Will China continue to look at Germany? Definitely. The size of the market and the importance of German politics in Europe will not diminish drastically. We will see who the successor in Berlin is and to what extent Germany will be more in line with America. A lot can still happen between January 20 and the end of March.
Joerg Wuttke has been a partner at Dentons Global Advisors-Albright Stonebridge Group in Washington for several months. Previously, he was Managing Director and Chief Representative of BASF China and President of the European Chamber of Commerce in Beijing. Wuttke lived in China for over 25 years.
Japan, South Korea, the Philippines, Malaysia, Indonesia and Singapore: All democracies of East and Southeast Asia had already congratulated Donald Trump on his election victory on Wednesday afternoon. Taiwan, on the other hand, waited until the evening to send its congratulations – too long, some observers criticized.
“What were we waiting for?” asked former DPP MP and political scientist Lo Chih-Cheng in Taipei on Saturday. “We don’t need to compare ourselves with Vietnam, China and North Korea, but among all other countries in the region, Taiwan’s congratulations came last.” Trump’s victory presents Taiwan with major challenges that require a more sensitive approach to foreign policy, Lo said.
According to CNN, Taiwan’s representative to the US, Alexander Yui, reportedly handed Trump’s former National Security Advisor Robert O’Brien a letter for Trump at a private lunch in Utah. Neither O’Brien nor Taiwan’s official representative wanted to comment on the story.
Taiwan’s presidential office also denied a Bloomberg report on Thursday that an attempt had been made to arrange a phone call between President Lai Ching-te and Trump. After his first election victory in 2016, Trump broke with diplomatic conventions and accepted a call from then-Taiwanese President Tsai Ing-wen.
Taiwan’s late congratulations show that Trump’s election victory is causing uncertainty in the island republic. His comments about “protection money” and the alleged theft of the American semiconductor industry raise doubts about whether the billionaire will defend Taiwan in the same way as his predecessor, Joe Biden. Biden had repeatedly declared that he would support Taiwan in the event of a Chinese attack, thus ending the decades-long US doctrine of “strategic ambiguity.”
“We survive because we are paranoid. Taiwanese are worried by nature,” commented Chen Ming-chi, former head of the state think tank for defense issues INDSR, on Trump’s election victory. However, he added that China is also concerned, especially about bilateral trade relations. “The situation of the Chinese economy is very different from the situation during Trump’s first term,” explained Chen.
According to Chen, China’s economy is in a much worse state today than it was in 2016. Nevertheless, he warns of a possible “grand bargain,” a deal between China and the US in which Taiwan could be sacrificed for Chinese concessions in trade relations. According to the sociologist, it is doubtful whether Trump is aware of Taiwan’s geostrategic importance. On the other hand, Lo Chih-Cheng does not believe in such a deal. “Still, we must be ready for anything,” said the DPP politician on Saturday.
In fact, Trump’s first term in office was generally very positive for Taiwan. The trade war and the general skepticism towards China in the US played into the hands of the government in Taipei. Overall, the US pursued a very pro-Taiwan policy under Trump. However, DPP politician Lo notes this was mainly thanks to Trump’s team and not the president himself. “During his first term, Trump didn’t know much about foreign policy. His team therefore had greater influence.” Lo particularly highlighted former Secretary of State Mike Pompeo and National Security Advisor John Bolton, who are regarded as China hawks in Washington.
Taiwan is eagerly anticipating who Trump will choose for his new cabinet. Any hopes that Pompeo or former UN ambassador Nikki Hailey could take on important posts were dashed over the weekend by Trump himself. Both had made high-profile trips to Taiwan after the end of their term in office. Former Secretary of State Pompeo had even called for the establishment of full diplomatic relations with Taiwan.
According to media reports, former National Security Advisor and Taiwan friend Robert O’Brien will also not be part of the new cabinet. However, Elbridge Colby is still in the running. The Republican worked as Deputy Secretary of Defense for Strategy and Force Development during Trump’s first term. Colby has distinguished himself in recent years as a fierce critic of US security policy. He also has nothing good to say about Taiwan’s government.
Colby argues that the US should abandon its focus on Russia and Ukraine in favor of China. He sees the People’s Republic as the biggest challenge for the US today. He repeatedly criticizes Taiwan for its solidarity with Ukraine. In April, Colby wrote on Twitter/X that Taiwan must show the “war-weary American public your seriousness in your self-defense. There are doubts. Don’t worry about as much about a war half a world away as your own fate. Anything less suggests a lack of seriousness.” If Colby is chosen for Trump’s cabinet, the US will likely step up the pressure on Taiwan to do more to bolster its own defense.
However, it is unclear how this could work in practice. The Taiwanese parliament and, consequently, the budget are controlled by an opposition that favors rapprochement with China. Under these circumstances, increasing the defense budget seems more than unlikely. This could further complicate relations with the USA under Trump.
In his congratulatory message, Taiwan’s President Lai emphasized the long-standing partnership based on shared values and interests. Lo also repeatedly spoke of “interests” on Saturday in Taipei. In its communication with the Trump administration, Taiwan must emphasize how it can serve the national interests of the US and not just focus on universal values and democratic ideals, he said. “We must make it clear how it would harm American interests if Taiwan were to be annexed by China,” Lo argues.
Trump ‘s transactional character, i.e. his tendency to see all relationships as a zero-sum game, could also be advantageous for Taiwan, argues political scientist Lo. The interests of the US are not only military, but also economic and technological in nature. “So the US wants protection money from us? Okay, then let’s make a shopping list for weapons systems. Let’s see if you’re willing to sell them to us?” Lo asks mockingly. Every crisis is also an opportunity, says the former DPP MP.
Lo also calls for Taiwan to join forces with like-minded countries such as Japan and Europe to exert influence on the US. “This is the only way we can communicate our concerns more effectively.” One of these countries could also be the Philippines.
Manila has reacted highly positively to Donald Trump’s election victory. This is likely due to the ongoing threat from China in the West Philippine Sea, where Chinese militias and Coast Guard are behaving increasingly aggressively. Under President Marcos Jr., Manila has taken a decisive stance against these violations compared to his predecessor Duterte and wants stronger support from the US – as a treaty partner and protecting power. “During Trump’s first term, especially in the second half, his policy was characterized by a clear anti-China stance. Therefore, It is natural that the Philippine government places high hopes in a second Trump term,” Chen Ming-chi told Table.Briefings.
Chen also emphasized that the US had provided extensive support under Biden, for example, by establishing military bases in northern Luzon and involving Japan in trilateral cooperation with the Philippines and the US. “In recent years, the US has contributed to a rapprochement between the Philippines and Taiwan. The further development of these relations depends largely on the US government’s stance on security in the Western Pacific,” Chen added.
In August 2019, amid an escalating trade war with China, then-US President Donald Trump fired off a series of tweets directing American companies to “immediately start looking for … alternative[s] to China” and shift their manufacturing back to the United States. The demand sent stock markets into a tailspin and alarmed US businesses with exposure to China.
While Trump ultimately softened his stance, the threat underscored a disturbing reality that the world must face now that he is returning to the White House: The president has the power to sever ties with the world’s second-largest economy, and can do so on a whim.
With Trump’s resounding victory over Kamala Harris, the specter of his impulsive, heavy-handed approach to diplomacy looms large. If his past actions are any indication, corporate America might soon be bracing for another round of erratic, high-stakes maneuvers – or worse – against China.
The US Constitution delegates authority over foreign relations to both the president and Congress, a structure designed to temper executive discretion with legislative oversight. But this balance has shifted dramatically in recent decades. Foreign policy is now overwhelmingly concentrated in the executive branch and goes largely unchecked, a trend that political scientists attribute to a rise in partisanship and a decline in congressional expertise. And with both parties favoring a hardline approach toward China, Trump will have even more freedom to lash out at the country.
Meanwhile, “national security” has proven to be remarkably pliable, extending far beyond traditional concerns such as homeland defense and cybersecurity. It now covers everything from cross-border data flows and supply-chain vulnerabilities to protecting industries deemed too critical to be dominated by foreign competitors.
This broadened definition has enabled presidential actions that would have been unimaginable only a decade ago. Consider some of the measures taken by Trump and his successor, Joe Biden: sanctioning Huawei and ZTE; banning TikTok; blocking Chinese investment in a dating app; launching the controversial “China Initiative” that disproportionately targeted Chinese scientists working in the US; imposing a semiconductor embargo on China; restricting US investment in Chinese artificial intelligence and quantum computers; and, most recently, slapping 100 percent tariffs on Chinese electric vehicles and batteries.
Many of these aggressive policies should be implemented only in emergencies. But what constitutes an “emergency” has also expanded considerably and now includes curbing China’s rise. And when Trump takes office in 2025, the executive branch’s capacity and willingness to declare an “emergency” and impose extraordinary measures under the banner of “national security” could increase substantially.
While US courts have the authority to check presidential powers – as they did in blocking Trump’s attempts to ban TikTok and WeChat – they have limited oversight of foreign policy. On matters of national security, in particular, federal courts have historically been very deferential – even more so when Congress and the president are aligned. The recent passage of the TikTok legislation illustrates how Congress can quickly restore executive power after a judicial ruling constrains it. As a result, TikTok and other Chinese companies are constantly contending with renewed hostility from the executive, like an endless game of Whac-A-Mole.
Ironically, this concentration of power in the US presidency mirrors the Chinese governance model that American leaders criticize so sharply. As I show in my book, High Wire: How China Regulates Big Tech and Governs Its Economy, the consolidation of political power in China over the past decade has often led to dramatic policy swings that undermine investor confidence and dampen entrepreneurship. The Chinese government’s recent missteps – from mismanaging the COVID-19 pandemic to crackdowns on the tech and property sectors and now a sluggish response to mounting deflation risks – should serve as a cautionary tale.
The US is likewise beginning to feel the unintended consequences of its own hostile approach toward China. The China Initiative has led to an exodus of talented Chinese scientists, many of whom have returned home. Meanwhile, the effectiveness of tough US sanctions and export controls is waning. Huawei, which initially struggled under these measures, has grown stronger of late, invigorated by state support and a firm resolve to achieve self-sufficiency. In its efforts to contain China, the US risks creating a more resilient rival – one strengthened by the very pressures meant to suppress it.
But instead of reassessing the efficacy of its hardline tactics, US agencies are doubling down on sanctions and restrictions. Even the notorious China Initiative, despite being “discontinued,” persists in a barely concealed form.
So far, much of the discussion about the Sino-American rivalry has framed China’s rise as the primary catalyst for US policy shifts. But this misses a crucial point: The conflict can also be traced back to a democratic deficit in American foreign policymaking. If the US takes increasingly extreme measures to contain China, as it likely will during Trump’s second administration, it risks widening that deficit – and becoming defined by what it opposes.
Angela Huyue Zhang, Professor of Law at the University of Southern California, is the author of High Wire: How China Regulates Big Tech and Governs Its Economy (Oxford University Press, 2024) and Chinese Antitrust Exceptionalism: How the Rise of China Challenges Global Regulation (Oxford University Press, 2021).
Copyright: Project Syndicate, 2024.
www.project-syndicate.org
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