Taipei. The first time China faced Donald Trump in the White House, it endured a trade war, a protocol breach with Taiwan, and a "bromance" between presidents that soured. Now, as President-elect Trump gears up for a second term, China is bracing for a volatile relationship with the United States and renewed tensions over trade, technology, and Taiwan.

A New Tariff War Looms
The most significant impact for China could be Trump’s campaign pledge to impose a blanket 60 percent tariff on all Chinese exports to the US. Such a tariff could deal a heavy blow to China's already shaky economy, which is burdened by high youth unemployment, a prolonged property slump, and mounting government debt. UBS analysts estimate that a 60 percent tariff could trim 2.5 percentage points, or nearly half, from China’s projected economic growth.

In Trump’s previous term, the US imposed tariffs on over $360 billion of Chinese goods, compelling Beijing to negotiate. A 2020 trade deal included commitments from China to improve intellectual property protections and purchase an additional $200 billion in American goods. However, studies later showed China fulfilled few of these promises. President Joe Biden retained most tariffs and recently added new duties on imports, including steel, solar cells, and electric vehicles.

Tariffs could again serve as leverage to bring Beijing to the negotiating table, said Henry Gao, an international trade law professor at Singapore Management University. “Given China’s weaker economic position now, there’s likely more willingness to talk,” he said. “While tariffs might have short-term impacts on China, the situation could improve once they reach an agreement.”

Factoring into trade talks could be Trump’s appeal to Chinese President Xi Jinping to help negotiate peace in Ukraine, a feat Trump has claimed he could accomplish quickly, without specifying how. This echoes Trump’s past requests for Xi's help in managing North Korea’s leader, Kim Jong Un. Trump could similarly balance trade grievances with soliciting China’s assistance in global crises, according to Wang Huiyao, founder of the Beijing-based think tank Center for China and Globalization.

Going 'Crazy' Over Taiwan
Trump has threatened to impose even higher tariffs — 150 percent to 200 percent — if China invades Taiwan, a self-governing democracy that Beijing claims as its own. While the US doesn’t formally recognize Taiwan as a country, it remains Taiwan’s strongest backer and largest arms supplier.

Trump caused a stir in 2016 by accepting a congratulatory call from Taiwan’s then-President Tsai Ing-wen, breaking diplomatic protocol. No US president had spoken directly to a Taiwanese leader since US-China relations were established in 1979. Trump ultimately stuck with supporting the status quo between Taipei and Beijing, a stance China expects him to maintain, said Zhu Feng, dean of the School of International Relations at Nanjing University.

Meanwhile, Trump told The Wall Street Journal he would avoid military force to prevent a blockade of Taiwan because Xi “respects me and he knows I’m (expletive) crazy.” On the campaign trail, Trump sometimes highlighted his personal rapport with Xi, which soured over trade disputes and the origins of the COVID-19 pandemic. However, Trump has also argued that Taiwan should “pay” the US for its protection, likening it to an insurance arrangement. Taiwan allocates about 2.5 percent of its GDP to defense and recently purchased hundreds of millions in US weapons.

Trump’s unpredictable stance on China keeps Beijing on edge, said Da Wei, director of the Center for International Security and Strategy at Tsinghua University. “We understand the challenges,” he said. “As for opportunities, we’re yet to see them clearly.”

Disputes over Chips
In his first term, Trump targeted Chinese tech firms over security concerns, including telecom giant Huawei. Biden expanded this focus by restricting China’s access to advanced semiconductors, essential for strategic industries like artificial intelligence.

However, Trump has criticized Biden’s CHIPS and Science Act, a bipartisan initiative allocating $53 billion to boost domestic semiconductor manufacturing. Currently, Taiwan produces nearly 90 percent of the world’s advanced chips. Taiwan’s largest chipmaker, TSMC, has expanded production in Arizona to comply with the CHIPS Act and mitigate potential US protectionist measures, said Shihoko Goto, Indo-Pacific Program director at the Wilson Center.

Trump has vowed to dismantle the CHIPS Act, a move critics say could weaken his reindustrialization campaign. He has also accused Taiwan of “stealing” the US chip industry decades ago. “Rather than providing a silicon shield, Taiwan’s chip dominance could actually spark tension with Trump, as it could be seen as a result of the US being taken advantage of,” Goto said.

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