Trump’s China policies will take collateral toll on Europe

Donald Trump’s electoral victory has been met, at least officially, with indifference in China.

Indeed, a second Trump administration does not have to be worse for China than the Biden administration. Much will depend on whether Trump finally opts for rapprochement or continues to push for separation.

When Biden came to power, Chinese leaders hoped that China-US relations would improve and shift away from Trump’s trade war and containment. But Biden levied additional tariffs on Chinese imports and, most importantly, placed much tighter export controls on US technology.

This brought China to the realization that US-China strategic competition is here to stay, regardless of whether a Democrat or Republican is in the White House.

Yet the new Trump administration could offer some advantages to China for four main reasons. First, the Chinese leadership knows that Trump’s positions can be erratic and that he likes to strike and announce big deals.

This is exactly what happened in December 2019 when then-Chinese Vice Premier Liu He reached the so-called Phase One trade deal with Trump.

The deal lifted at least some US tariffs on Chinese goods in exchange for US$600 billion in Chinese imports from the US and preferential access to the Chinese market for US companies, especially in the financial sector.

Second, Trump’s isolationist agenda benefits China in that traditional US allies, including the European Union, will likely need to look elsewhere for economic support.

This might imply getting closer to China. Negotiations between China and the EU on a Comprehensive Agreement on Investment (CAI) accelerated just after the signature of the Phase One deal, which undermined European interests in China.

Thirdly, Trump has been clear