Most of the nominations by the elected President of the United States, Donald Trump, for officials in his administration seem to be from the anti-China stream. Notably, Trump is expected to nominate Republican Senator Marco Rubio, who has criticized Beijing on issues such as its treatment of Uighur Muslims and the crackdown on the pro-democracy movement in Hong Kong, for the position of Secretary of State. His national security advisor will be Michael Waltz, a congressman from Florida, who has called for the United States to boycott the 2022 Winter Olympics in Beijing over China’s handling of COVID-19 and human rights.
Perhaps the most disturbing aspect for Beijing is Rubio’s support for Taiwan, including calls for a free trade agreement and unrestricted interaction between American officials and their Taiwanese counterparts. Taiwan is expected to make significant new arms purchases after Trump takes office. During his first term, Trump approved over 18billioninarmssalestoTaiwan,comparedto18billioninarmssalestoTaiwan,comparedto7.7 billion under Biden. Therefore, if Beijing cannot bypass Rubio and secure direct communication between Xi and Trump, or other senior American officials, it may face direct escalation.
China imposed sanctions on Rubio in 2020 for his support of pro-democracy protesters in Hong Kong, and this would be the first time China actively restricts the travel of a U.S. Secretary of State, posing an early test of how Beijing will deal with the new Trump administration. Rubio has advocated for U.S. visa sanctions on Chinese officials and urged the State Department to deny Hong Kong’s Chief Executive, John Lee, from traveling to San Francisco for the 2023 Asia-Pacific Economic Cooperation Summit. The Chinese embassy in Washington has not commented on Rubio’s sanctions or his nomination, but its spokesperson, Liu Pengyu, stated that Beijing looks forward to working with the new administration to promote relations “in a stable and sustainable direction.”
Trump’s return has created uncertainty among millions of Chinese exporters and raised concerns about the success of China’s plans to revive the world’s second-largest economy. Trump has vowed to impose comprehensive tariffs of 60% on American imports of Chinese goods as part of a trade package the U.S. is implementing under the slogan “America First,” which Beijing opposes. Biden’s national security advisor, Jake Sullivan, described the transition period as “a time when competitors and adversaries may see a potential opportunity.” Biden assured Xi of the “need to maintain stability, clarity, and predictability through this transition between the United States and China.”
China would be one of the most affected countries if these tariffs are indeed enacted, especially if Trump successfully pressures the European Union to impose similar tariffs on China as well. However, many Chinese companies are currently working to diversify their markets or begin diversifying their supply chains and establishing manufacturing facilities outside China. Even if Trump’s presidency imposes high tariffs, Europe may choose not to follow suit unless there is very strong political pressure. In Asia, both Vietnam and Taiwan are likely to be the biggest beneficiaries at China’s expense, with Vietnam benefiting from lower-cost manufacturing in sectors like textiles and wooden furniture, while Taiwan and Malaysia have gained from shifts in the supply chain for electronic products.
China certainly does not want relations with the United States to deteriorate before Trump officially takes office, but it has begun working in Washington’s backyard, with Chinese leader Xi Jinping embarking on a diplomatic trip to Latin America, which includes a renewed free trade agreement with Peru, the inauguration of the massive deep-water Chancai port there, and being welcomed in the Brazilian capital on a state visit. Beijing is looking to secure mineral ores, soybeans, and other goods from Latin America, but American officials fear that the Chinese may establish new military and intelligence sites close to the United States.
China is also preparing for an escalating conflict with the United States, even at a heavy economic cost. Beijing plans to tighten export controls on technologies and key materials deemed “dual-use,” including raw materials and metals such as tungsten, graphite, magnesium, and aluminum alloys typically used in technology supply chains. The Chinese Ministry of Commerce has unveiled specific specifications for dual-use technologies and items that will be subject to export controls in the country. The rules will come into effect on December 1st, and both the public and private sectors in China are accelerating efforts to enhance domestic production of semiconductors, including advanced devices, anticipating that the United States will increase pressure on Beijing during Trump’s second administration.
