On the day of Donald Trump’s inauguration, all eyes are on the USA today. China has sent positive signals in recent days, and there was even a phone call between Trump and Xi – the first since 2021. The new US president has already announced that he will visit China within his first 100 days in office. While Xi Jinping will not attend the inauguration, he will send Vice President Han Zheng, who is traveling to Washington with a delegation. Taiwan also sends its “highest blessings” – and a delegation. The spectacle begins at 6 p.m. Central European Time.
Shortly before the start of Trump’s presidency, long-time China expert Jörg Wuttke shares his thoughts in today’s op-ed. He now lives in Washington, D.C. and is closely involved in Sino-American relations. These will change under Donald Trump’s second presidency. But how? Wuttke raises four critical questions to observe in Trump’s first 100 days. Find out what they are at the bottom of the newsletter.
One of Trump’s remarks that caused a stir a few days ago was the reduction of transit fees or the “return” of the Panama Canal to the US. The waterway also plays a vital role for China, which is why the interests of the two superpowers clash here. Angela Köckritz spoke to Panamanian professor Alonso E. Illueca, who assesses the geopolitical significance.
Have an informative read and a good start to an exciting week.
After Donald Trump’s comments about the Panama Canal, the people of Panama must be pretty upset, right?
The remarks of President Trump about the Canal have upset the Panamanian people. The Panama-US relationship is very complex. In the 19th century, it was a relationship based on vassalage and interventionism. During the 20th century, it evolved, through ups and downs, to a partnership and alliance based on common shared values and the preservation of the neutrality of the Panama Canal. President Trump’s remarks remind the Panamanians of the gunboat diplomacy that prevailed during the 19th and early to mid-20th centuries and not the partnership and alliance built since 1977. Those remarks have aroused patriotic fervor in the Panamanian people, united in a single driving issue: The Canal is and always will be Panamanian.
Could you tell us about the two ports that are causing Trump so much concern?
The two ports are Balboa and Cristobal, which are on the Pacific and Atlantic (Caribbean) sides of the Canal, respectively. They are operated by CK Hutchison Holdings, formerly Hutchison Whampoa, a Hong Kong-based company whose owner is a family of Hong Kong billionaires. Given that Beijing has extended its national security laws to Hong Kong and its government has shown willingness to weaponize supply chains, claims regarding the Chinese control over such ports have risen. Other key infrastructure projects have been built by China-related entities, such as a cruise port in Amador (Pacific side of the Canal), the fourth bridge over the Canal and Central America’s largest Convention Center. There were also other projects controlled by China-related entities currently under litigation, such as a container facility and a power plant, both in Colón. Most of these projects have a potential dual use (commercial and military), which leads to concern from the US side.
How real is the security threat that the Chinese military could use the ports as a point of access?
The ports have a potential dual use, that is undeniable, but operatively doing so in a strategic choke point as the Panama Canal is almost impossible. The Canal has a neutrality regime precluding any type of military mobilization or troop stationing in the Canal, besides from Panamanian security forces. This regime is not only guaranteed by Panama and the US but also by 40 other States, including France, the United Kingdom, and the Russian Federation.
Port operators gain insight into a vast amount of data. How high is the risk of such quantities, especially since China controls so many ports worldwide? Hutchinson operates 53 ports in 24 countries alone.
It is very significant, particularly given the opacity that accompanies Hutchison operations in Panama. This, together with the fact that China has deployed security equipment and a cybersecurity company in Colón and San Miguelito, respectively, points to a specific interest in data gathering.
In 2017, Panama severed its ties with Taiwan and established diplomatic relations with China. Less than eight years have passed, but according to China Index, Panama is the country with the greatest Chinese influence in Latin America after Chile. How did this happen so quickly?
This could only have happened with the acquiescence of the subsequent Panamanian governments and its economic and political elites. The data compiled by the China Index shows that China’s influence in Panama goes way beyond the military and economic realm; in fact, those are the areas in which China exerts less influence. China’s influence in Panama is more significant in the fields of media (59.1 percent), academia (47.7 percent), society (68.2 percent), law enforcement (50 percent), technology (40 percent), domestic politics (82.5 percent) and foreign policy (68.2 percent), which contrast the fields of economy (27.3 percent) and military (30 percent).
After the change of government, the initial honeymoon phase cooled off. Several super projects were suspended. Panamanian society considered the proposal to build the Chinese embassy right at the gates of the Canal an insult. There were massive protests against the exploitation of Cobre Panama, the largest open-cast copper mine in Central America, which is reportedly also backed by a Chinese company. Where did this shift come from?
After the Juan Carlos Varela government (2014-2019), the Laurentino Cortizo administration (2019-2024) pledged to cool down the bilateral ties with China. While it initially did so, including by halting the fourth bridge over the Canal project, the Margarita island container port facility and power plant in Pilón, towards the middle of his government, things changed. In 2021, Hutchison received a 25-year renewal of Balboa and Cristobal ports (through a very opaque process and despite the political situation in Hong Kong). The copper mine also received a new contract in 2023, even though there were claims that the Canadian company had among its shareholders a company controlled by the Chinese Communist Party. Moreover, towards the end of the government, the fourth bridge project was reactivated.
How do people in Panama see China these days, and how are they trying to position themselves in the growing geopolitical rift between China and the US?
A 2023 poll conducted by the International Republican Institute in Panama shows that 62 percent of the people in Panama consider the US to be the country’s most important political partner, while 22 percent deem it to be China. Moreover, in the economic realm, the data varies slightly, with 59 percent deeming the US as the most important economic partner, with China in second place with 28 percent. The same poll shows that the general perception is that China-Panama ties have not affected Panama’s democratic system (44 percent), with 19 percent considering that it has strengthened its democracy and 23 percent deeming that it has been weakened.
Alonso E. Illueca is an Associate Professor at Universidad Santa María La Antigua, where he teaches International Law and Human Rights. He is also an Associate Researcher at Expediente Abierto, a Central American research and dialog forum.
US-China relations sit in a precarious place as Donald Trump prepares for his second term. While the Biden years featured a steady cadence of dialogue and communication, the relationship worsened along many fronts. Trump 2.0 is all-but-certain to retain Biden’s tough-on-China ethos, though the policy approach is expected to diverge substantially.
There are far more unknowns than knowns on the eve of Trump’s second administration. Trump has called for 60 percent tariffs on Chinese goods. His incoming Secretary of State, Marco Rubio has called China the “most dangerous adversary the US has ever confronted.” Yet, at the same time, Trump has referenced his “great” relationship with Xi Jinping on numerous occasions.
In short, the US-China relationship is entering an era of significant volatility. As such, rather than laying out hard-and-fast expectations, I highlight four key questions I will be watching over the administration’s first 100 days and how the answers to these questions will chart the course of the relationship over the coming four years.
The roster of Trump 2.0 administration picks features a number of dyed-in-the-wool China critics, such as Secretary of State Marco Rubio, National Security Advisor (NSA) Mike Waltz, and US Trade Representative Jamieson Greer. Yet, there are other voices, including Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent, Ambassador to China David Perdue, and, of course, Tesla CEO Elon Musk, who may argue for a less confrontational approach. Given the well-documented flexibility of Trump’s ideological convictions, his team will have considerable sway over China policy implementation.
A key early barometer will be the treatment of tariffs. Trump has pushed back on reports that his team is preparing a scaled-down, phased tariff policy, but such discussions are likely occurring. How aggressive – or how measured – tariff policy at the outset will be an indication of whether the maximalists or the pragmatists hold an edge.
Despite U.S.-China tensions during Trump 1.0, Trump’s penchant for dealmaking was a constant throughline, culminating in the Phase One trade agreement in January 2020. There are already indications that Beijing has put out feelers to the Trump team on the contours of a potential deal, and it is likely that Trump will pursue some form of a deal early in the administration. The key unknown is what form a prospective deal will take.
During the campaign, Trump floated many tough-on-China policies that his administration might take. Rarely, though, did he discuss what China could do to limit the damage. We got an early indication of what that might be on January 17, following a call between Trump and Xi Jinping. Trump posted on his Truth Social account that he and Xi discussed “balancing trade, fentanyl, and TikTok,” all of which would likely play a role in any U.S.-China negotiation.
Given that China notched a record 992 billion US dollars trade surplus in 2024, Trump is almost certain to return to his previous playbook of demanding China increase purchases of US goods. Given that the Trump team is unlikely to ease up on existing US restrictions aimed at China’s high-tech industry, Trump and Xi may find common ground on less sensitive areas of trade, like agriculture.
In the very likely scenario in which Trump does not embrace China with goodwill and amity, leaders in Beijing will have to decide how forceful to be in China’s response to hawkish policies. As the Biden administration released successive waves of restrictions on China, Beijing largely refrained from responding with its full arsenal of retaliatory tools, partly out of concern over negatively impacting China’s struggling domestic economy and spooking international companies at a time when it sought to retain foreign investment. That position may be untenable if and as it becomes clear that Trump 2.0 will take a hard line on China.
The range of potential actions includes across-the-board restrictions on rare earths exports to the US and/or increased targeting of US companies’ China operations. As Beijing ratchets up its measures against US interests, companies based in other countries may benefit as a byproduct.
A key pillar of Biden-era China policy was finding common cause with other countries in US efforts to isolate China. While the Trump administration is unlikely to usher in a wholesale global diplomatic realignment, Trump’s relatively positive reception in countries with which Biden had more fractious relations, like certain Gulf states and, of course, Russia, coupled with his animus toward traditional US allies, like Europe, will feed through to U.S.-China relations. These dynamics, which should be clear early in the administration, may drive certain countries closer to Beijing while pulling some global swing states, like Saudi Arabia or the UAE, closer to the US orbit.
Countries in Asia – like Japan, South Korea, and the Philippines – are likely to continue to pursue close relations with the US under Trump, given the more immediate, defense-related concerns they have vis-à-vis China. The case of Europe is much hazier. Though the European Union hasn’t exactly followed Biden’s lead on China, Europe has been much more assertive in its economic disputes with Beijing, the most notable example being the bloc’s tariffs on Chinese electric vehicles. With a much less transatlantic-friendly administration entering the White House, Europe may have to rethink its more combative approach in favor of preserving its economic interests.
As Trump’s second term unfolds, the world will be watching closely to see how his unpredictable approach to U.S.-China relations shapes the global political landscape.
Joerg Wuttke, a Partner at DGA-Albright Stonebridge Group in Washington, D.C., is a renowned expert on U.S.-EU-China relations. With over 30 years of experience in China, he has been instrumental in shaping trade and investment policies for BASF and the EU Chamber of Commerce in China.
Even lions need a break occasionally. In Bandung, West Java, Indonesia, preparations for the Chinese New Year are in full swing. On January 29, the lion dance performance must be perfect. Chinese immigrants have been living in Indonesia for centuries, and in 2020 their number was estimated at just under 3.3 million – just under one percent of the population. Most of them live on the island of Java.
On the day of Donald Trump’s inauguration, all eyes are on the USA today. China has sent positive signals in recent days, and there was even a phone call between Trump and Xi – the first since 2021. The new US president has already announced that he will visit China within his first 100 days in office. While Xi Jinping will not attend the inauguration, he will send Vice President Han Zheng, who is traveling to Washington with a delegation. Taiwan also sends its “highest blessings” – and a delegation. The spectacle begins at 6 p.m. Central European Time.
Shortly before the start of Trump’s presidency, long-time China expert Jörg Wuttke shares his thoughts in today’s op-ed. He now lives in Washington, D.C. and is closely involved in Sino-American relations. These will change under Donald Trump’s second presidency. But how? Wuttke raises four critical questions to observe in Trump’s first 100 days. Find out what they are at the bottom of the newsletter.
One of Trump’s remarks that caused a stir a few days ago was the reduction of transit fees or the “return” of the Panama Canal to the US. The waterway also plays a vital role for China, which is why the interests of the two superpowers clash here. Angela Köckritz spoke to Panamanian professor Alonso E. Illueca, who assesses the geopolitical significance.
Have an informative read and a good start to an exciting week.
After Donald Trump’s comments about the Panama Canal, the people of Panama must be pretty upset, right?
The remarks of President Trump about the Canal have upset the Panamanian people. The Panama-US relationship is very complex. In the 19th century, it was a relationship based on vassalage and interventionism. During the 20th century, it evolved, through ups and downs, to a partnership and alliance based on common shared values and the preservation of the neutrality of the Panama Canal. President Trump’s remarks remind the Panamanians of the gunboat diplomacy that prevailed during the 19th and early to mid-20th centuries and not the partnership and alliance built since 1977. Those remarks have aroused patriotic fervor in the Panamanian people, united in a single driving issue: The Canal is and always will be Panamanian.
Could you tell us about the two ports that are causing Trump so much concern?
The two ports are Balboa and Cristobal, which are on the Pacific and Atlantic (Caribbean) sides of the Canal, respectively. They are operated by CK Hutchison Holdings, formerly Hutchison Whampoa, a Hong Kong-based company whose owner is a family of Hong Kong billionaires. Given that Beijing has extended its national security laws to Hong Kong and its government has shown willingness to weaponize supply chains, claims regarding the Chinese control over such ports have risen. Other key infrastructure projects have been built by China-related entities, such as a cruise port in Amador (Pacific side of the Canal), the fourth bridge over the Canal and Central America’s largest Convention Center. There were also other projects controlled by China-related entities currently under litigation, such as a container facility and a power plant, both in Colón. Most of these projects have a potential dual use (commercial and military), which leads to concern from the US side.
How real is the security threat that the Chinese military could use the ports as a point of access?
The ports have a potential dual use, that is undeniable, but operatively doing so in a strategic choke point as the Panama Canal is almost impossible. The Canal has a neutrality regime precluding any type of military mobilization or troop stationing in the Canal, besides from Panamanian security forces. This regime is not only guaranteed by Panama and the US but also by 40 other States, including France, the United Kingdom, and the Russian Federation.
Port operators gain insight into a vast amount of data. How high is the risk of such quantities, especially since China controls so many ports worldwide? Hutchinson operates 53 ports in 24 countries alone.
It is very significant, particularly given the opacity that accompanies Hutchison operations in Panama. This, together with the fact that China has deployed security equipment and a cybersecurity company in Colón and San Miguelito, respectively, points to a specific interest in data gathering.
In 2017, Panama severed its ties with Taiwan and established diplomatic relations with China. Less than eight years have passed, but according to China Index, Panama is the country with the greatest Chinese influence in Latin America after Chile. How did this happen so quickly?
This could only have happened with the acquiescence of the subsequent Panamanian governments and its economic and political elites. The data compiled by the China Index shows that China’s influence in Panama goes way beyond the military and economic realm; in fact, those are the areas in which China exerts less influence. China’s influence in Panama is more significant in the fields of media (59.1 percent), academia (47.7 percent), society (68.2 percent), law enforcement (50 percent), technology (40 percent), domestic politics (82.5 percent) and foreign policy (68.2 percent), which contrast the fields of economy (27.3 percent) and military (30 percent).
After the change of government, the initial honeymoon phase cooled off. Several super projects were suspended. Panamanian society considered the proposal to build the Chinese embassy right at the gates of the Canal an insult. There were massive protests against the exploitation of Cobre Panama, the largest open-cast copper mine in Central America, which is reportedly also backed by a Chinese company. Where did this shift come from?
After the Juan Carlos Varela government (2014-2019), the Laurentino Cortizo administration (2019-2024) pledged to cool down the bilateral ties with China. While it initially did so, including by halting the fourth bridge over the Canal project, the Margarita island container port facility and power plant in Pilón, towards the middle of his government, things changed. In 2021, Hutchison received a 25-year renewal of Balboa and Cristobal ports (through a very opaque process and despite the political situation in Hong Kong). The copper mine also received a new contract in 2023, even though there were claims that the Canadian company had among its shareholders a company controlled by the Chinese Communist Party. Moreover, towards the end of the government, the fourth bridge project was reactivated.
How do people in Panama see China these days, and how are they trying to position themselves in the growing geopolitical rift between China and the US?
A 2023 poll conducted by the International Republican Institute in Panama shows that 62 percent of the people in Panama consider the US to be the country’s most important political partner, while 22 percent deem it to be China. Moreover, in the economic realm, the data varies slightly, with 59 percent deeming the US as the most important economic partner, with China in second place with 28 percent. The same poll shows that the general perception is that China-Panama ties have not affected Panama’s democratic system (44 percent), with 19 percent considering that it has strengthened its democracy and 23 percent deeming that it has been weakened.
Alonso E. Illueca is an Associate Professor at Universidad Santa María La Antigua, where he teaches International Law and Human Rights. He is also an Associate Researcher at Expediente Abierto, a Central American research and dialog forum.
US-China relations sit in a precarious place as Donald Trump prepares for his second term. While the Biden years featured a steady cadence of dialogue and communication, the relationship worsened along many fronts. Trump 2.0 is all-but-certain to retain Biden’s tough-on-China ethos, though the policy approach is expected to diverge substantially.
There are far more unknowns than knowns on the eve of Trump’s second administration. Trump has called for 60 percent tariffs on Chinese goods. His incoming Secretary of State, Marco Rubio has called China the “most dangerous adversary the US has ever confronted.” Yet, at the same time, Trump has referenced his “great” relationship with Xi Jinping on numerous occasions.
In short, the US-China relationship is entering an era of significant volatility. As such, rather than laying out hard-and-fast expectations, I highlight four key questions I will be watching over the administration’s first 100 days and how the answers to these questions will chart the course of the relationship over the coming four years.
The roster of Trump 2.0 administration picks features a number of dyed-in-the-wool China critics, such as Secretary of State Marco Rubio, National Security Advisor (NSA) Mike Waltz, and US Trade Representative Jamieson Greer. Yet, there are other voices, including Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent, Ambassador to China David Perdue, and, of course, Tesla CEO Elon Musk, who may argue for a less confrontational approach. Given the well-documented flexibility of Trump’s ideological convictions, his team will have considerable sway over China policy implementation.
A key early barometer will be the treatment of tariffs. Trump has pushed back on reports that his team is preparing a scaled-down, phased tariff policy, but such discussions are likely occurring. How aggressive – or how measured – tariff policy at the outset will be an indication of whether the maximalists or the pragmatists hold an edge.
Despite U.S.-China tensions during Trump 1.0, Trump’s penchant for dealmaking was a constant throughline, culminating in the Phase One trade agreement in January 2020. There are already indications that Beijing has put out feelers to the Trump team on the contours of a potential deal, and it is likely that Trump will pursue some form of a deal early in the administration. The key unknown is what form a prospective deal will take.
During the campaign, Trump floated many tough-on-China policies that his administration might take. Rarely, though, did he discuss what China could do to limit the damage. We got an early indication of what that might be on January 17, following a call between Trump and Xi Jinping. Trump posted on his Truth Social account that he and Xi discussed “balancing trade, fentanyl, and TikTok,” all of which would likely play a role in any U.S.-China negotiation.
Given that China notched a record 992 billion US dollars trade surplus in 2024, Trump is almost certain to return to his previous playbook of demanding China increase purchases of US goods. Given that the Trump team is unlikely to ease up on existing US restrictions aimed at China’s high-tech industry, Trump and Xi may find common ground on less sensitive areas of trade, like agriculture.
In the very likely scenario in which Trump does not embrace China with goodwill and amity, leaders in Beijing will have to decide how forceful to be in China’s response to hawkish policies. As the Biden administration released successive waves of restrictions on China, Beijing largely refrained from responding with its full arsenal of retaliatory tools, partly out of concern over negatively impacting China’s struggling domestic economy and spooking international companies at a time when it sought to retain foreign investment. That position may be untenable if and as it becomes clear that Trump 2.0 will take a hard line on China.
The range of potential actions includes across-the-board restrictions on rare earths exports to the US and/or increased targeting of US companies’ China operations. As Beijing ratchets up its measures against US interests, companies based in other countries may benefit as a byproduct.
A key pillar of Biden-era China policy was finding common cause with other countries in US efforts to isolate China. While the Trump administration is unlikely to usher in a wholesale global diplomatic realignment, Trump’s relatively positive reception in countries with which Biden had more fractious relations, like certain Gulf states and, of course, Russia, coupled with his animus toward traditional US allies, like Europe, will feed through to U.S.-China relations. These dynamics, which should be clear early in the administration, may drive certain countries closer to Beijing while pulling some global swing states, like Saudi Arabia or the UAE, closer to the US orbit.
Countries in Asia – like Japan, South Korea, and the Philippines – are likely to continue to pursue close relations with the US under Trump, given the more immediate, defense-related concerns they have vis-à-vis China. The case of Europe is much hazier. Though the European Union hasn’t exactly followed Biden’s lead on China, Europe has been much more assertive in its economic disputes with Beijing, the most notable example being the bloc’s tariffs on Chinese electric vehicles. With a much less transatlantic-friendly administration entering the White House, Europe may have to rethink its more combative approach in favor of preserving its economic interests.
As Trump’s second term unfolds, the world will be watching closely to see how his unpredictable approach to U.S.-China relations shapes the global political landscape.
Joerg Wuttke, a Partner at DGA-Albright Stonebridge Group in Washington, D.C., is a renowned expert on U.S.-EU-China relations. With over 30 years of experience in China, he has been instrumental in shaping trade and investment policies for BASF and the EU Chamber of Commerce in China.
Even lions need a break occasionally. In Bandung, West Java, Indonesia, preparations for the Chinese New Year are in full swing. On January 29, the lion dance performance must be perfect. Chinese immigrants have been living in Indonesia for centuries, and in 2020 their number was estimated at just under 3.3 million – just under one percent of the population. Most of them live on the island of Java.
