China is bracing for fresh tensions with Trump over trade, tech and Taiwan

TAIPEI, Taiwan -- The first clip China faced Donald Trump successful nan White House, location was a waste and acquisition war, a breach of protocol involving Taiwan’s erstwhile leader, and a president-to-president bromance that turned sour.

As President-elect Trump prepares to commencement his 2nd word successful office, China is bracing for unpredictability successful its ties pinch nan United States and renewed tensions complete trade, exertion and Taiwan.

Perhaps nan biggest consequence for China — if Trump stays existent to his run promises — is his threat to slap broad 60% tariffs connected each Chinese exports to nan U.S.

Tariffs for illustration that would beryllium a rustle to China’s already unstable economy, which is suffering from precocious younker unemployment, a lengthy spot slump and authorities debt. A 60% work connected Chinese imports could shave disconnected 2.5 percent points, aliases astir half, of China’s projected economical growth, according to an study published earlier this twelvemonth by UBS.

During Trump's erstwhile word successful office, nan U.S. imposed tariffs connected much than $360 cardinal of Chinese products. That brought Beijing to nan negotiating table, and successful 2020 nan 2 sides signed a waste and acquisition deal successful which China committed to amended intelligence spot authorities and bargain an other $200 cardinal of American goods. A investigation group a mates of years later showed China had bought fundamentally none of nan equipment it had promised.

President Joe Biden retained astir of those tariffs and added caller duties this twelvemonth connected imports including steel, star cells and electrical vehicles.

Like past time, tariffs could service arsenic a instrumentality to unit Beijing backmost to nan negotiating table, said Henry Gao, a rule professor astatine Singapore Management University who focuses connected world trade.

“Given nan anemic economical position of China this time, I deliberation location will beryllium much willingness to talk,” he said. “Thus, while nan tariff mightiness person immoderate short-term effects connected nan Chinese economy, nan business mightiness amended erstwhile they scope a deal.”

Factoring into nan waste and acquisition talks could beryllium Trump’s appeals to Chinese President Xi Jinping to thief discuss a solution to nan Ukraine war, which Trump has boasted he’ll beryllium capable to do quickly, without saying how.

Trump antecedently sought Xi's thief successful dealing pinch North Korea's rogue leader Kim Jong Un. That move could repetition itself, pinch Trump weighing waste and acquisition grievances against seeking China's support successful world crises, according to Wang Huiyao, laminitis of nan Beijing-based deliberation vessel Center for China and Globalization.

“China is nan largest trading partner of some Russia and Ukraine," Wang wrote successful a caller commentary. "These adjacent economical ties springiness China a unsocial opportunity to play a greater domiciled successful peace-making efforts.”

There is 1 script successful which Trump has threatened to enforce moreover higher tariffs — 150% to 200% — connected Chinese goods: if China invades Taiwan, a self-ruled populist that Beijing claims arsenic its own.

The U.S. does not admit Taiwan arsenic a country, but is its strongest backer and biggest arms provider.

Trump angered Beijing successful December 2016 by taking a congratulatory telephone from Taiwan’s then-president Tsai Ing-wen successful a breach of negotiated protocol. No U.S. president had spoken straight to a Taiwanese leader since Washington and Beijing established ties successful 1979.

Trump's move created worry successful China-watching circles, but ultimately, he stuck to supporting nan position quo successful relations betwixt Taipei and Beijing.

China expects him to proceed to do so, said Zhu Feng, dean of nan School of International Relations astatine Nanjing University.

“Will (he) want to move to support Taiwan independence? It is unlikely,” he said.

As for China’s repeated threats to annex Taiwan, Trump told The Wall Street Journal past period that he would not person to usage subject unit to forestall a blockade of Taiwan because Xi “respects maine and he knows I’m (expletive) crazy.”

On nan run trail, Trump sometimes talked up his individual relationship pinch Xi, which started exuberantly during his first word but soured complete disputes astir waste and acquisition and nan origins of nan COVID-19 pandemic.

But Trump has besides said that Taiwan should salary nan U.S. for defending it against China, likening nan narration to insurance. Taiwan spends astir 2.5% of its GDP connected defense, and purchased hundreds of millions of dollars’ worthy of U.S. weapons this year.

Trump has purposely maintained a consciousness of uncertainty successful his narration pinch China, said Da Wei, head of nan Center for International Security and Strategy astatine Tsinghua University successful Beijing.

“We are clear astir nan challenges,” he said. “As for opportunities, we are yet to spot them clearly.”

During his first term, Trump began targeting Chinese exertion firms complete information concerns, focusing connected ample companies for illustration nan telecoms elephantine Huawei. Biden continued successful that guidance by placing curbs connected China’s entree to precocious semiconductors, which are needed to create strategical industries specified arsenic artificial intelligence.

But Trump has criticized Biden’s CHIPS and Science Act, a bipartisan measure that earmarked $53 cardinal to build up home manufacturing of semiconductors. Currently, Taiwan produces astir 90% of nan world’s proviso of nan astir precocious chips.

The island’s largest semiconductor manufacturer, TSMC, expanded accumulation successful Arizona, partially to respond to nan CHIPS Act, and to beryllium prepared to withstand immoderate different protectionist policies successful nan U.S., said Shihoko Goto, head of nan Indo-Pacific Program astatine nan Wilson Center.

Trump has promised to do distant pinch nan CHIPS Act, though critics opportunity that would undermine his run to reindustrialize nan U.S. The president-elect has besides accused Taiwan of “stealing” nan spot manufacture from nan U.S. decades ago.

“Rather than providing a silicon shield, Taiwan’s power successful nan spot manufacture could really beryllium nan root of hostility betwixt Taipei and Trump, arsenic Taiwan’s successes successful nan spot assemblage whitethorn beryllium seen arsenic having only been imaginable arsenic a consequence of nan United States being taken advantage of,” Goto said.