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Soon after Donald Trump won the presidential election in November, Xi Jinping asked his aides to urgently analyze the Cold War rivalry between the United States and the Soviet Union.

His concern, according to people who consult with senior Chinese officials, was that as President Trump gears up for a showdown with Beijing, China could get isolated like Moscow during that era.

He’s not wrong to worry. Even though Trump may be the one who currently looks isolated on the world stage—picking trade fights with erstwhile allies like Mexico and Canada, alarming Europe over his handling of the war in Ukraine and vowing to annex Greenland and the Panama Canal—the truth is that China doesn’t hold a strong hand.

With a domestic economy in crisis, Xi is playing defense, hoping to salvage as much as possible of a global trade system that helped pull his country out of poverty. Across the Pacific, Trump is intent on rewiring that very trading system, which he and his advisers see as having benefited the rest of the world—and China most of all—at the U.S.’s expense.

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Trump, who highlighted the need to counter China throughout his campaign, returned to the White House with a comfortable victory and Republican control of Congress. He believes he can deal with Beijing from a position of strength, advisers said.

Many of his early diplomatic moves should be viewed in that context, these people said. Trump is trying to end the conflicts in the Middle East and Ukraine to better focus on China, they said. His recent enthusiastic embrace of Russia and its authoritarian leader, Vladimir Putin, is propelled in part by a strategic desire to drive a wedge between Moscow and Beijing.

“All the stuff he’s doing is so that we can put more resources” to counter China, an administration official said.

Trump on Tuesday added to existing tariffs on China, citing its role in the fentanyl crisis in the U.S., surprising Chinese officials who were still trying to figure out how to approach what they see as an erratic U.S. leader.

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What complicates Beijing’s efforts at shaping its strategy toward the U.S. is the difficulty in getting Trump’s core team to engage. China hasn’t been a primary focus for Trump in his first weeks. His near-term priorities have been on fixing illegal immigration, slashing government spending and ending Russia’s war in Ukraine.

While Xi is waiting for clarity on what the U.S. wants from Beijing, his economic team is preparing ways to hit back at Trump.

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One lesson Xi has learned from the first trade war with Trump is that China has more to lose from hitting back at Trump’s tariff hikes with proportional levy increases, the people said, as the U.S. buys substantially more from China than the other way around.

Michael Pillsbury, a China expert at the conservative Heritage Foundation who consults with the administration, said he has met with members of Chinese delegations that have visited Washington since the election. The Chinese effort amounts to a campaign to ward off tariffs, he said.

“They are kind of desperate,” Pillsbury said. “Their economy is in trouble. Now that Trump put the tariffs on, they know this campaign has failed.”

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Trump’s “America First” policy essentially calls for dismantling the norms set up by the World Trade Organization since 1995. Under those norms, China has been able to flood the world with cheap exports while limiting foreign access to its own market. China’s $295 billion trade surplus with the U.S. is the widest of any U.S. trading partner.

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To re-engineer the system, Turpin said, Trump’s trade team may “focus on getting relatively favorable deals with everyone else first and let the Chinese stew in their continuing economic depression.”

The people close to the administration said Trump believes that the U.S. can strengthen its leverage over Beijing by individually renegotiating terms of trade with its other partners.

On his first day in office, Trump signed a presidential memorandum directing federal agencies to conduct a series of reviews of the U.S.’s existing trade relationships. One key task for his economic team is to cut deals with countries like Mexico and Vietnam, part of efforts to prevent Chinese companies from rerouting goods to the U.S. through third parties.

LINK

WSJ reporting, and editorials for sure, tends to come from a Cato Institute pro-“free” trade angle, so this is a pretty good write up acknowledging that President Trump likely has the upper hand in a trade war with China. Long article, but a good overall read on the Trump Administration strategy. It also discusses Trump using this tactic not just for U.S. economics, but to try to get the Chinese government to actually engage in helping curb the flow of fentanyl out of their country that’s finding its way into the U.S.

This post was edited on 3/6/25 at 8:10 am