Dec 25, 2024 08:22 PM IST
Security hawks, protectionists, Wall Street finance titans and tech giants will shape Trump’s China policy. New Delhi will need to assess the balance of power among them
After having sealed the debate on what to do with China in his first term, and sealed it so decisively that even Joe Biden had to broadly follow his course of action, Donald Trump has reopened the debate on Washington DC’s ties with Beijing in his second term.
First a caveat. This is not to underplay the structural rivalry embedded in the United States (US)-China dynamic. A rudimentary glance at the history of the rise of great powers, Washington DC’s status as the most powerful player in the international system, and the aspiration of Beijing to emerge as the top dog means that DC and Beijing’s interests will collide. The two countries will clash sometimes politely, sometimes not so politely; sometimes through proxies, sometimes directly; sometimes on esoteric policy issues that will determine the future and sometimes, on old school territorial matters; sometimes overtly, and sometimes covertly.
So the question isn’t if the US and China will become best friends (they won’t), or that the competition will cease (it won’t). The key question is the balance between competitive and cooperative actions that the US undertakes; the depth, breadth, and intensity of the US-China dialogue; the nature of concessions that both tactically make to each other and in what areas, and the broader political signal from DC to its bureaucracy, industry, allies and partners. And it is here that in his first term, Trump sent a signal that China was an adversary. And it is here that there are both diverse schools of thought within the Trump ecosystem this time, and mixed signals from Trump so far.
The first school is represented by Trump’s national security appointees who believe Beijing has the intent and capability to attack US interests, it is doing so already, and China is an adversary across theatres and domains and needs to be countered. Trump’s NSA Michael Waltz, secretary of state Marco Rubio, under secretary of state Jacob Helberg, under secretary of defense Elbridge Colby, CIA director John Ratcliffe, and FBI director Kash Patel can be broadly seen to belong to this school. And given that India benefits from America’s strategic hostility to China, Delhi’s strongest allies in Trump’s ecosystem will remain these individuals who will run America’s national security State, including the much-maligned “deep State”. In Washington DC this week, external affairs minister S Jaishankar is likely to build on this national security convergence.
The second school is represented by economic protectionists who hold China responsible for the erosion of American manufacturing and jobs and believe in tariffs as a key instrument to weaken China. Robert Lighthizer was the most forceful champion of this view in Trump’s first term and his protégés are spread across the administration. JD Vance, who has written extensively about the impact of the decline of manufacturing, will champion a strong protectionist policy. Trump himself, of course, strongly believes in this view. This would have been good news for India, except that protectionists don’t like India much either. They also believe in onshoring rather than friend-shoring when it comes to supply chain diversification. And they appear fairly agnostic towards China’s aggressive designs with its neighbours as long as it doesn’t affect US core interests directly. Jaishankar will have to understand the depth of trade concerns vis-à-vis both China and India, prepare for the sectors in India that will get hit due to inevitable tariffs, and creatively explore the prospects of a comprehensive trade and investment deal. Otherwise, India doesn’t benefit automatically from the economic hostility to China.
The third school within Trump’s ecosystem is the Wall Street finance crowd. This constituency had remained most sceptical of both Trump’s and then Biden’s attempts to decouple or derisk from China. For three decades now, American capital has made hay in China. Businessmen have developed deep links with China’s political operators. Beijing knows which constituencies are most vulnerable to Chinese pressure, and can be used as channels to influence Trump. This school of thought views China as an opportunity, argues for continued economic engagement, and opposes restrictions on investment. The fact that both Trump’s treasury secretary Scott Bessent and commerce secretary Howard Lutnick are Wall Street players and Trump himself cares deeply about corporate reaction and markets means that this school will have a strong voice on the table. India has inroads within this crowd, but it pales in comparison to China’s influence.
And finally, the swing constituency on Trump’s China policy is the tech community, exemplified by Elon Musk. Musk’s business interests lie in the US-China rapprochement. He has spoken of making Taiwan a Hong Kong-type administrative zone of China, and he is widely expected to play a role in the communication between the two sides. India is a market of interest for Musk but as he showed earlier this year, despite India drawing up a new Electric Vehicle policy, he preferred to deepen investments in China rather than come to India. The fact that Musk killed a recent Congressional bill that would have, among other things, restricted American outbound investments to China is bound to raise questions about conflict of interest.
Now examine Trump’s own statements. He has said that if China and the US work together, they can solve all of the world’s problems, a statement that Biden didn’t make in all his four years. Trump has said he has a soft corner for TikTok and is trying to find ways to circumvent both legislation and judicial orders to let the China-owned platform remain in the US market, despite his own officials’ warning about data security concerns. Trump has said he is in regular communication with Xi Jinping and has invited Xi to his inauguration. And now think about what China can possibly offer him in terms of political wins — a deal on fentanyl; a possible offer to work together to bring an end to the war in Ukraine with the US influencing Ukraine and China working on Russia; investments and job creation promises; and concessions to Trump’s finance and tech supporters.
None of this may come to pass. The Trump administration may continue a policy of outright confrontation with China. But just the fact that there are diverse views on China within the ruling ecosystem marks a shift in the political mood in DC. India will do well to ascertain the balance of power within Trump’s coalition on China. Who prevails will determine DC-Delhi ties.
The views expressed are personal
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