Trump’s China strategy seeks ‘containment with a smile’

There are two ways for a powerful nation to contain an adversary that is increasingly challenging its core interests. One is to contain the foe by seeking to isolate and squeeze it, including bringing its economy and security under pressure through sanctions and strategic alliances. The other way is to seek discreet containment while maintaining normal relations in trade and diplomacy.

President Trump’s pivot to rein in an expansionist China is just beginning, but it is already apparent that his approach — in a significant departure from Cold War-era overt antagonism or former President Joe Biden’s Russia policy — is likely to embrace the second path. Trump’s approach will seek to limit the influence and power of China without resorting to open hostility.

Trump has sought early on in his term to halt what he has called the “senseless war” in Ukraine, largely because the conflict has diverted American attention from pressing challenges in the Indo-Pacific region and made China the big winner. A Russia-Ukraine ceasefire would allow the U.S. to shift strategic focus and military resources from Europe to the Indo-Pacific, a pivotal region in shaping the new global order.

This was underscored by Defense Secretary Pete Hegseth’s Feb. 12 warning to Europe that “the U.S. will no longer tolerate an imbalanced relationship which encourages dependency” and that Europe must take “responsibility for its own security” by leading “from the front” so that America can prioritize “deterring war with China” in the Indo-Pacific.

America’s 80-year run as the world’s preeminent power is under increasing challenge not from Russia, whose revanchist ambitions are largely confined to what it calls its “near abroad,” but from a globally ascendant China. In fact, with Russia preoccupied with Ukraine, China — despite its “no limits” partnership with Moscow — is quietly chipping away at traditional Russian spheres of influence, including drawing Central Asia’s former Soviet republics into its orbit. And in the Indo-Pacific, China is increasingly flexing its muscles, as shown by its recent military drills off Australia, Vietnam and Taiwan.

The Trump administration is working toward clamping down on China’s access to advanced U.S. technology as well as on Chinese investments in critical American infrastructure. A recent White House memorandum to departments and agencies sought to remake the economic relationship with Beijing through a series of proposed restrictions, including thwarting the use of U.S. capital to modernize the Chinese military and blocking Chinese investment strategies to secure “cutting-edge technologies, intellectual property and leverage in strategic industries.”

The memorandum also called for new or expanded restrictions on American investments in China in semiconductors, artificial intelligence, quantum, biotechnology, hypersonics, aerospace, advanced manufacturing, directed energy and other areas important to Beijing’s military-civil fusion strategy.

Trump views himself as a dealmaker, and he appears open to cutting deals with Beijing that help reduce China’s huge trade surplus with America. Blending flattery with hardball tactics, Trump has periodically lavished praise on Chinese leader Xi Jinping, including calling him “a brilliant man.”

But Trump has already escalated his tariff war. An extra 10 percent duty on Chinese goods this month is on top of a 10 percent tariff slapped by Trump in early February. And this combined 20 percent duty adds to tariffs of up to 25 percent on Chinese imports that Trump imposed in his first term.

One reason for Trump’s hardline approach toward Canada and Mexico is that these countries serve as back doors for low-cost Chinese goods to enter America duty-free. The concern over origins of goods also may explain why Trump’s suspension of his 25 percent tariffs on Canadian and Mexican products applies just to goods covered under the 2020 North American trade accord, thus leaving a lot of products still subject to the new high duties. The 2020 agreement’s rules permit duty-free entry of goods into the U.S. only if the products have been largely made with North American components.

The China angle is also apparent from Trump’s recent 25 percent tariffs on foreign steel and aluminum. These tariffs, while penalizing U.S. allies, seek to target China. Faced with a slowing economy, including stubborn disinflationary pressure and a deepening real estate crisis, China has dumped much of its excess steel and aluminum output in the markets of American allies and partners, which, in turn, have exported large shares of their own more-expensive production to the U.S.

More fundamentally, Trump’s early moves appear designed to beat back the Chinese export tsunami. In an untenable situation, China produces 31 percent of the world’s manufactured goods but accounts for just 13 percent of global consumption. A U.S.-led pushback against China’s increasing reliance on exports for growth could deepen its current economic woes, slowing down its rapid military buildup and crimping its debt-trap diplomacy.

As part of an apparent strategy for “containment with a smile,” Trump will continue to express the importance of “getting along with China,” as he did soon after returning to the White House. But we can expect his administration to pursue economic engagement with strategic restraints, including limiting Beijing’s access to critical technologies, rigorously screening Chinese investments and prodding American businesses to step up efforts to diversify supply chains away from China.

Deploying targeted economic restrictions rather than broad sanctions will permit continued engagement in less sensitive areas while still applying pressure where needed.

The U.S. military posture in the Indo-Pacific, for its part, is likely to be defined by deterrence. While shunning provocative actions that could escalate tensions, the Trump administration is expected to strengthen deterrence to prevent aggression, including against an increasingly vulnerable Taiwan.

The strategy will likely seek to ensure that the adversary feels the walls closing in — without feeling the punch.

Brahma Chellaney is the author of nine books, including the award-winning “Water: Asia’s New Battleground.”

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