Trump Is Fulfilling His Campaign Promises; Plus, How Beijing Is Handling the Brewing U.S.-China Tariff Battle
from Asia Unbound and Asia Program
from Asia Unbound and Asia Program

Trump Is Fulfilling His Campaign Promises; Plus, How Beijing Is Handling the Brewing U.S.-China Tariff Battle

Workers assemble an EV car inside BYD's first electric vehicle (EV) factory in Southeast Asia, a fast-growing regional EV market where it has become the dominant player, in Rayong, Thailand, on July 4, 2024.
Workers assemble an EV car inside BYD's first electric vehicle (EV) factory in Southeast Asia, a fast-growing regional EV market where it has become the dominant player, in Rayong, Thailand, on July 4, 2024. Chalinee Thirasupa/Reuters

Trump’s administration is following through on its campaign promises to implement tariffs, but China has become more resilient and prepared to counter U.S. economic pressure.

February 5, 2025 11:02 am (EST)

Workers assemble an EV car inside BYD's first electric vehicle (EV) factory in Southeast Asia, a fast-growing regional EV market where it has become the dominant player, in Rayong, Thailand, on July 4, 2024.
Workers assemble an EV car inside BYD's first electric vehicle (EV) factory in Southeast Asia, a fast-growing regional EV market where it has become the dominant player, in Rayong, Thailand, on July 4, 2024. Chalinee Thirasupa/Reuters
Article
Current political and economic issues succinctly explained.

As the New York Times’ Jamelle Bouie often notes, while voters in presidential campaigns seem to believe that candidates are just making lofty promises, most winners of presidential elections do indeed work to implement the policies they promised on the campaign trail. Joe Biden did this, George W. Bush did this (in terms of a tax cut before 9/11, which shifted his entire agenda), Barack Obama did this (until he faced a GOP House), and many other presidents have done the same.

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So, while many leading pundits and Trump voters seemed to believe that he would not follow through on many of his promises, Trump, like his predecessors, has been doing just that. This is clear domestically, where Trump and his administration have sought vengeance against those he believes have wronged him, taken a serious hammer to foreign aid, led many government agencies to scrub their websites of information believed to anger Trump, and, along with Elon Musk, gone all-out to try to reduce the federal workforce by almost any means possible.

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Even as most major economists denounce broad tariffs as ineffective economic policy, and the head of Trump’s Council of Economic Advisors, Kevin Hassett, has not defended tariffs in the past, the Trump administration is making good on its promises of tariffs. (Some of this desire for tariffs may simply be because, for nearly his whole business and professional life, Trump seems to have been a fan of tariffs.) While the tariffs on Canada and Mexico have now been suspended for thirty days, in part perhaps because neither country really offered anything new to the Trump administration and in part because they immediately tanked the stock market, Trump has followed through with his plan to place tariffs of 10 percent on all Chinese exports to the United States.

But compared to eight years ago, China is much better prepared now to fight back China manufactures a massive amount of its own needs—the size of its industrial sector now dwarfs that of the United States or any other country. It has diversified its trading partners dramatically, becoming much less dependent on selling items to the United States. It has taken the lead in many cutting-edge industries and is quickly finding markets for them, insulating Beijing from U.S. pressure. For example, while Chinese electric vehicles are not sold in the United States, China has become the world leader in EVs and has been steadily increasing its sales of these modestly priced cars in Southeast Asia, with the next markets being Africa and Latin America. The population in China has also generally become less cowed by the United States or fearful of tariffs.

In addition, the Chinese leadership has been preparing for Trump’s return and has drawn up a list of tariffs for this first round—relatively limited tariffs on a modest amount of U.S. goods – while making clear suggestions that it could hit back much harder in a tariff battle. That battle would be one that might badly damage the U.S. economy, lead to shocks in Asia and around the world, and certainly wreak havoc on the U.S. stock market, which Trump views as a major indicator of his presidential success.

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Chinese officials are already highlighting how Trump’s tariffs will cripple many U.S. manufacturers dependent on Chinese parts, badly hurt domestic firms reliant on Chinese textiles, and raise the price of highly desired consumer goods in the United States, such as high-end electronics—likely angering avid consumers, especially younger Americans. Chinese leaders also note that the tariffs could lead to significant job losses in the United States and spark inflation again—themes consistent with what standard U.S. economists believe.

U.S. public diplomacy in response to China’s claims has been somewhat incoherent, which is not surprising given that the White House seems indifferent to public diplomacy and interested in dismantling many of the country’s public diplomacy outlets and broader tools.

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China

Transition 2025

China Strategy Initiative

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At the Shangri-La dialogue in Singapore last week, U.S. Secretary of Defense Pete Hegseth said that the United States would be expanding its defense partnership with India. His statement was in line with U.S. policy over the last two decades, which, irrespective of the party in power, has sought to cultivate India as a serious defense partner. The U.S.-India defense partnership has come a long way. Beginning in 2001, the United States and India moved from little defense cooperation or coordination to significant gestures that would lay the foundation of the robust defense partnership that exists today—such as India offering access to its facilities after 9/11 to help the United States launch operations in Afghanistan or the 123 Agreement in 2005 that paved the way for civil nuclear cooperation between the two countries. In the United States, there is bipartisan agreement that a strong defense partnership with India is vital for its Indo-Pacific strategy and containing China. In India, too, there is broad political support for its strategic partnership with the United States given its immense wariness about its fractious border relationship with China. Consequently, the U.S.-India bilateral relationship has heavily emphasized security, with even trade tilting toward defense goods. Despite the massive changes to the relationship in the last few years, and both countries’ desire to develop ever-closer defense ties, differences between the United States and India remain. A significant part of this has to do with the differing norms that underpin the defense interests of each country. The following Council on Foreign Relations (CFR) memos by defense experts in three countries are part of a larger CFR project assessing India’s approach to the international order in different areas, and illustrate India’s positions on important defense issues—military operationalization, cooperation in space, and export controls—and how they differ with respect to the United States and its allies. Sameer Lalwani (Washington, DC) argues that the two countries differ in their thinking about deterrence, and that this is evident in three categories crucial to defense: capability, geography, and interoperability. When it comes to increasing material capabilities, for example, India prioritizes domestic economic development, including developing indigenous capabilities (i.e., its domestic defense-industrial sector). With regard to geography, for example, the United States and its Western allies think of crises, such as Ukraine, in terms of global domino effects; India, in contrast, thinks regionally, and confines itself to the effects on its neighborhood and borders (and, as the recent crisis with Pakistan shows, India continues to face threats on its border, widening the geographic divergence with the United States). And India’s commitment to strategic autonomy means the two countries remain far apart on the kind of interoperability required by modern military operations. Yet there is also reason for optimism about the relationship as those differences are largely surmountable. Dimitrios Stroikos (London) argues that India’s space policy has shifted from prioritizing socioeconomic development to pursuing both national security and prestige. While it is party to all five UN space treaties that govern outer space and converges with the United States on many issues in the civil, commercial, and military domains of space, India is careful with regard to some norms. It favors, for example, bilateral initiatives over multilateral, and the inclusion of Global South countries in institutions that it believes to be dominated by the West. Konark Bhandari (New Delhi) argues that India’s stance on export controls is evolving. It has signed three of the four major international export control regimes, but it has to consistently contend with the cost of complying, particularly as the United States is increasingly and unilaterally imposing export control measures both inside and outside of those regimes. When it comes to export controls, India prefers trade agreements with select nations, prizes its strategic autonomy (which includes relations with Russia and China through institutions such as the Shanghai Cooperation Organization and the BRICS), and prioritizes its domestic development. Furthermore, given President Donald Trump’s focus on bilateral trade, the two countries’ differences will need to be worked out if future tech cooperation is to be realized.