China Prepares for Trump's Second Term... Concerns Over 'Trade War Part 2'

"Trump's Return, No Limits to Negative Aspects"
Concerns Over 'Double Burden' of 60% Tariffs on Advanced Technology Sanctions

China is reportedly preparing for the possible return of former President Donald Trump to the White House ahead of the U.S. presidential election this November, according to the Wall Street Journal (WSJ) on the 1st (local time).

Although it is currently unpredictable who will win between former President Trump and President Joe Biden, it is generally expected that the damage caused by a Trump re-election would be significant.

Former U.S. President Donald Trump [Image source=Yonhap News]

Win Soon, head of the China program at the Stimson Center, a think tank based in Washington, D.C., stated, "China believes that if former President Trump returns to the White House, the positive aspects in U.S.-China relations will be limited, but the negative aspects will be endless."

In particular, China is paying close attention to former Secretary of State Mike Pompeo and former U.S. Trade Representative (USTR) Robert Lighthizer, who are likely to join a second Trump administration. The Chinese government has even placed the names of 28 former Trump administration officials, including Pompeo, on a sanctions list banning their entry into China. Lighthizer was a key figure leading the U.S.-China trade war during the Trump administration.

The biggest concern is the outbreak of a second trade war. During his tenure, former President Trump pushed for a 25% tariff on Chinese products. In this election, he has pledged to impose a 60% tariff bomb if re-elected. This could exacerbate the double burden by strengthening the Biden administration’s de-risking sanctions policy that blocks access to advanced technologies such as cutting-edge semiconductors, quantum computing, and artificial intelligence (AI), while also imposing high tariffs.

Chinese companies are expanding their access to advanced technologies like AI in regions such as the Middle East, fearing that U.S. technology sanctions on China will accelerate if former President Trump returns. According to Jimmy Goodrich, senior advisor at the RAND Corporation and an expert on China and the semiconductor industry, Chinese government researchers are working to deepen cooperation in biotechnology, quantum computing, and AI with government-supported research institutes in the United Arab Emirates (UAE).

Although Treasury Secretary Janet Yellen and Secretary of State Tony Blinken have visited China consecutively to criticize overproduction, China is accelerating production in advanced industries such as electric vehicles, batteries, and solar panels. The WSJ explained, "Chinese authorities believe this is the best way to beat the U.S., especially if Trump returns to the White House."

The WSJ also reported that according to senior Chinese officials, President Xi Jinping is concerned about potential disruptions in relations with Russian President Vladimir Putin. While China has countered the West through close China-Russia ties, the reappearance of former President Trump, who has a personal relationship with Putin, could weaken this relationship.

In fact, within China, there is a view that former President Trump might attempt a "reverse Nixon" strategy. Just as former President Richard Nixon visited China during the Cold War to counter the Soviet Union, Trump could bring Russia into the fold to counter China.