Donald Trump's return to the White House has ushered in a new chapter in US foreign policy, particularly regarding China. His recent policy actions reflect a continuation and intensification of the confrontational approach he adopted during his first term.

Trade policies

Trump's administration has implemented a "Fair and Reciprocal Plan," which includes reciprocal tariffs on all trade partners, particularly targeting China. This move builds on previous tariffs and could significantly increase the cost of Chinese goods entering the US market. The reinstatement of a 25 percent tariff on steel and aluminum imports further complicates matters, as many Chinese products rely on these materials, potentially decreasing demand for Chinese finished goods in both the US and third-country markets.

Investment restrictions

The "America First Investment Policy," issued on February 21, 2025, marks a significant shift in American investment regulations. This policy promotes open investment for allied countries while imposing stricter restrictions on investments from China and others. Such measures create barriers for Chinese capital, limiting its ability to invest in critical US industries like high-tech and energy, and signaling to other nations to reconsider Chinese investments.

Technological competition

Trump's focus on technological competition, particularly in sectors like artificial intelligence and semiconductors, poses significant challenges for China. Potential sanctions against Chinese tech companies and increased scrutiny of investments could create a hostile environment for Chinese technological development. Companies like Huawei have already faced substantial hurdles due to previous sanctions, and new measures could further stifle their growth.

Global economic implications

The continuation and potential expansion of the trade war may accelerate the decoupling process between the US and China, with far-reaching global consequences. Disruptions to established supply chains could lead to increased costs for businesses and consumers worldwide, forcing multinational corporations to reevaluate their production strategies.

Polarization of global alliances

The US strengthening its alliances in the "Indo-Pacific" to counter China could create a more polarized global landscape, pressuring countries to choose sides. This dynamic may hinder regional cooperation and force nations to prioritize geopolitical considerations over their economic interests.

Technological bifurcation

As the US seeks to limit China's access to advanced technologies, the global technology landscape may split into two ecosystems. This bifurcation could slow global technological innovation and create barriers to international cooperation, particularly in research and development.

Domestic political influences

Trump's policies are also shaped by domestic political pressures, appealing to economic protectionists and national security hawks. This could lead to inconsistent policy implementation, making it challenging for businesses and other countries to adapt to US policy changes.

In conclusion, Trump's return to the White House has introduced new challenges and uncertainties in US-China relations. By closely observing key policy actions and employing the proposed framework, we can better anticipate the future trajectory of this critical bilateral relationship.

The author is a Beijing-based commentator. The views don't necessarily reflect those of China Daily.

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