Trade tensions are escalating as new mysterious agreements surface. President Trump has extended gestures of goodwill towards China by inviting Xi Jinping to his inauguration, reducing proposed tariffs, and postponing the ban on TikTok. This shift in rhetoric from threats to compliments hints at a potential deal in the making. However, any significant agreement is unlikely to fully align with Trump’s America First priorities of trade and security.
Trump’s main economic objectives include bringing back manufacturing jobs to the U.S. and reducing the trade deficit. These goals could be addressed by China through commitments to increase imports from the U.S., implement export restrictions, and invest more in American manufacturing. Nevertheless, due to China’s export-driven economic model, attempts to balance trade may fall short.
China’s economy heavily relies on exports, with low domestic consumption linked to its manufacturing and export strength. Any rapid changes to this model could destabilize the country and threaten social stability. While increased Chinese investments in the U.S. could benefit both parties in the short term, effective enforcement mechanisms would be crucial to ensure compliance.
Both sides need to navigate complex negotiations as China seeks to leverage its military capabilities for concessions, particularly concerning Taiwan. Trump may be open to a deal to ease tensions in the Indo-Pacific region. However, China’s leaders are unlikely to give in easily and may push for revisions to U.S. policies. The evolving dynamics between the two nations underscore the challenges and uncertainties in reaching a mutually beneficial agreement.
Taiwan could be persuaded to make concessions in exchange for assurances that they will refrain from using force and reduce the pace of regional military activities. Potential U.S. concessions might involve imposing new restrictions on communication between U.S. officials and Taiwanese counterparts, decreasing arms sales to Taiwan, issuing official statements that further dilute the U.S.’s unclear commitment to defending Taiwan, agreeing to “oppose” rather than “not support” Taiwanese independence, or leaning towards if not outright accepting the One China Principle of the People’s Republic of China. These types of concessions could expose the U.S. to greater strategic vulnerability in Asia, as they would provide Beijing with opportunities for future exploitation. Research on public opinion in Taiwan indicates that perceptions of reduced U.S. commitment are linked to decreased confidence in self-defense capabilities and a reluctance to engage in combat. U.S. concessions could also fuel Beijing’s persistent propaganda efforts in Taiwan, which highlight American betrayal and self-interest. A fracture in public opinion on the island could pave the way for political factions willing to make significant concessions to China on sovereignty and governance in order to delay a complete takeover. Surprisingly, Taiwan’s accommodation could make aggressive coercive actions more appealing for mainland China, potentially putting the U.S. in a predicament where intervention risks escalation and nonintervention reinforces feelings of betrayal in Taiwan, hastening a shift away from the U.S. Major compromises on sovereignty issues might also restrict the options of future U.S. presidents and regional allies should China decide to resort to force. Moreover, Beijing might find it challenging to uphold its end of the deal, either facing political repercussions or constraints. Economic factors suggest that trade incentives are not reliable. Ceasing threatening remarks against Taiwan would not incur significant backlash for China’s leaders, given that most citizens are not enthusiastic about war, and such rhetoric could easily be revived in the future. China’s institutional dynamics make it unlikely for its leaders to be constrained, given Xi’s concentrated power and the erosion of once-restraining institutions. While it is essential for Trump to negotiate a tough but precise deal with China, attempting an all-encompassing agreement to completely reshape the trade and security relationship between the U.S. and China would be misguided. China’s economy cannot be transformed overnight to favor the U.S., and the Chinese Communist Party’s military expansion and internal consolidation of power present substantial challenges to its credibility on regional security matters. Francis de Beixedon is an Asia analyst at a Washington-based think tank. This material is copyrighted by 2025 Nexstar Media, Inc. All rights reserved. Redistribution, rewriting, broadcast, or publication without permission is prohibited. For the most current news, weather, sports, and streaming video, visit The Hill website.
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