[트럼프 2기와 세계]‘Tariff pressure against China’ becomes more severe… Xi Jinping may pull out the ‘big deal card’

High tariffs on Chinese imports, etc.
Announcement of sanctions that exceed the level of the first phase
Biden administration’s ‘Chip 4‘ check strategy
‘Calculation method’ becomes more complicated, including Taiwanese variables

Trump prefers one-on-one transactions
Attention is focused on whether there will be a ‘showdown’ with President Xi.

The second period of the ‘Trump era’, which returned after four years, is once again summarized with the slogan ‘Make America Great Again’. Like the first term, it is expected to revive the foreign policy focused on ‘America First’ and maximize America’s interests on the international stage. It is highly likely that President Joe Biden will overturn the foreign policy stance that he has worked hard to establish, ‘America leading the world again,’ and bring about changes in international relations.

Above all, attention is focused on the US-China relationship. President-elect Donald Trump has defined China as the “biggest threat” and has declared strong sanctions that go beyond the level of the first term. There are observations that the U.S.-China relationship, which has been strained due to China’s strategy of keeping China in check, could freeze further.

■ ‘Customs Man’ returns even stronger

Even before accepting the Republican presidential nomination, President-elect Trump predicted more severe pressure on China. Representative examples include imposing tariffs of more than 60% on all Chinese imports and revoking the most-favored-nation status. The Republican Party’s platform also includes a plan to completely eliminate America’s dependence on China through a ‘four-year national reshoring plan’ to gradually stop importing essential medical and national security supplies from China.

This pledge is based on the overall policy of ‘decoupling’, a complete separation from China, which is taking away American jobs and wealth. Although the overall structure of competition between the US and China will not change, it is a clear difference from the Biden administration, which has considered China a ‘strategic competitor’ and pursued ‘de-risking’. Lee Hyo-young, a professor at the National Diplomatic Academy, said in a recent report, “If Trump returns to power, the U.S. government’s ‘China bashing’ will become stronger and more focused.” “It can be achieved,” he predicted.

Foreign media also agreed that U.S.-China relations would become more unstable with President-elect Trump’s return. The New York Times (NYT) predicted that unlike the Biden administration’s ‘narrow field, high fence’ strategy of selective technology control, President-elect Trump is poised to take much broader and more radical measures. The Washington Post (WP) evaluated, “Trump, who has openly mentioned tariff measures against China as a major achievement during his first term, may come up with more dramatic and destructive plans in the future.”

■ Shall we shake the global net of checks on China?

<img width="700" src="https://img.khan.co.kr/news/2024/11/11/l_2024111101000268300024503.jpg" alt="The much-talked-about handshake diplomacy continues in the second term?
Then-US President Donald Trump met with Chinese President Xi Jinping (right) during his first term in office. AFP Yonhap News”/>

The much-talked-about handshake diplomacy continues in the second term?
Then-US President Donald Trump met with Chinese President Xi Jinping (right) during his first term in office. AFP Yonhap News

However, it is unclear how much of President-elect Trump’s pledged policies, such as high tariffs, will be realized. With the Republican Party taking control of Congress, it has become difficult to put a stop to Trump’s hard-line policy during his second term, but it may be difficult to fully realize it, given that blatant trade barriers could become a boomerang for the United States as well. In a recent report, Morgan Stanley estimated that if a 10% universal tariff and a 60% tariff on China were implemented as President-elect Trump pledged, consumer prices in the United States would rise by 0.9% and gross domestic product (GDP) would decrease by 1.4%.

Kang Joon-young, a professor at the Graduate School of International and Area Studies at Hankuk University of Foreign Studies, said, “Unlike the Cold War between the U.S. and the Soviet Union in the past, economic factors are deeply intertwined in the strategic competition between the U.S. and China.” He added, “In a reality where China accounts for 40% of the global value chain, Trump “It will not be realistically easy to implement full-scale decoupling as promised,” he said. In the end, the possibility of using tariffs as a ‘negotiation card’ is also discussed. The Wall Street Journal (WSJ) reported that, contrary to Trump’s pledge of non-discrimination during his first term, he actually negotiated using tariffs.

There are also predictions that China will ultimately prefer negotiations with President-elect Trump. Bloomberg News predicted, “China, which has relied on exports of goods such as electric vehicles and batteries to boost its economy suffering from deflationary pressures and real estate problems, will hope to avoid a tariff war that is even more destructive than the one during Trump’s first term.”

Since the trade war that started in 2018, China has been prepared to respond by diversifying its imports, but considering the economic situation of a long-term recession, a second trade war could become an even greater burden. In a congratulatory message to President-elect Trump, Chinese President Xi Jinping said, “History clearly shows us that when China and the United States cooperate, it is beneficial to everyone, and when they fight, everyone gets hurt.”

Unlike the Biden administration, which has implemented a strategy to respond to the rise of China by involving allies, there is some analysis that President-elect Trump’s stance of emphasizing ‘US-led pressure’ may actually be strategically beneficial to China. Professor Kang said, “Under the Trump administration, which prefers a one-on-one transaction method, there is a possibility of settling the issue with President Xi in a ‘top-down’ manner.”

■ Is the ‘Taiwan variable’ different from Biden?

The Taiwan issue is always a variable. Since his first term, President-elect Trump has spoken on the phone with then-Taiwanese President Tsai Ing-wen, breaking his silent agreement with China to ‘neither call nor visit the Taiwanese leader.’ After coming to power, he continued to provide weapons to Taiwan, stimulating China. President Biden confirmed the principle of ‘not supporting Taiwan’s independence’, but made Taiwan the key to keeping China in check by expanding arms sales to Taiwan and forming Chip 4 (a semiconductor cooperation system between the United States, Korea, Japan, and Taiwan). We have continued our strategy of using it as an axis.

However, President-elect Trump showed a conflict with President Biden, who clearly stated that ‘the United States will come to the defense if China invades Taiwan.’ During the presidential election, he continued to make remarks such as “(Taiwan’s defense) is something that is given for free, and only fools do that” and “Taiwan, which accumulated wealth by stealing the semiconductor business, should pay for its defense costs.” Regarding this, there is also an analysis that in Trump’s second term, Taiwan’s security may be abandoned depending on relations with China. Rather than the Democratic Party, which implements Taiwan policy based on ideological logic, President-elect Trump, who acts solely based on U.S. interests, is more likely to attempt a ‘deal’ with President Xi over Taiwan.

However, considering the strategic value of the Taiwan Strait from a security perspective and the importance of semiconductor company TSMC, the prevailing assessment is that it will be difficult to give up Taiwan even in Trump’s second term. Foreign Policy pointed out, “The biggest difference between Trump and Biden may be his policy toward Taiwan,” but added, “Although Trump may pursue hard-line negotiations, it is unlikely that he will actually give up support for Taiwan.”