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The second Trump presidency kicks off with China questions swirling everywhere. Will we see 60% tariffs? Another trade war? Or something completely different this time around? A recent conversation with Chris Johnson, a former CIA analyst turned China expert, reveals why this round might be more unpredictable than anyone expects.
Key Takeaways
- Trump's China approach has shifted from pure trade focus to something potentially more strategic, with fewer ideological hawks in key positions this time
- Xi Jinping views Trump as both helpful for China's "America in decline" narrative and dangerously unpredictable as a wounded animal
- China's retaliation toolkit has evolved significantly since the first trade war, with new "lawfare" weapons ready for deployment
- The economic pressure on Xi domestically isn't enough yet to force major policy changes, despite widespread private sector pessimism
- A potential grand bargain could involve China helping with Russia-Ukraine in exchange for Taiwan concessions, though this remains highly speculative
- DeepSeek's AI breakthrough represents a fundamental challenge to US export control strategy, not just a technical achievement
The Serendipity Factor: How CIA Analysts End Up Watching China
Johnson's path into China analysis wasn't exactly planned. Back in the early '90s, fresh out of graduate school at George Washington University, he figured he'd focus on post-Soviet issues or Middle East affairs. China? "I don't know anything about China," he told his CIA interviewers when they suggested a visit to that office.
Here's the thing though - sometimes the most important career moves happen by accident. The Chinese civil-military relations role seemed like a natural fit given his background studying communist systems. "I thought I'm going to try this China thing," Johnson recalls. "Fell in love with it and I've been doing it ever since."
This was during what they called the "peace dividend" period - that brief window after the Cold War when everyone thought major power competition was basically over. The CIA hired very few analysts then, and China remained a small office until the mid-'90s. It's hard to imagine now, but China just wasn't seen as the threat it would later become.
The daily routine for CIA analysts centers around one key question each morning: "Do I have anything that should be written for the president today?" That President's Daily Brief represents the holy grail of intelligence work - the chance to directly inform the most powerful person on Earth about what's happening in your corner of the world.
Obama's China Inheritance: Smarter Than You Think
The Obama administration gets unfairly criticized for being naive about China, according to Johnson's insider perspective. The common narrative suggests they were caught off guard by Xi Jinping's authoritarian turn, but that's not quite accurate. "My sense is they were fully aware of the direction things were going," Johnson explains.
The real issue wasn't ignorance - it was reluctance to believe that Xi would fundamentally break from the collective leadership model that had dominated Chinese politics since the 1980s. Academic circles shared this hesitation. People understood China was changing but hoped it might evolve toward more openness rather than less.
What Obama's team struggled with was accepting that Xi Jinping was genuinely a risk-taker who might act unpredictably. They learned this the hard way when Xi broke his promises about not militarizing the South China Sea and signed cyber agreements that proved worthless almost immediately. The skepticism started building from there, setting up the fundamental break that would come with Trump.
The administration did start pushing back on Chinese activities in cyber space and the South China Sea, but they maintained the basic framework of engagement that had defined US-China relations for four decades. That framework was about to get completely demolished.
Trump 1.0: Breaking 40 Years of Precedent
When Trump first took office, he did something unprecedented - he reframed China as a strategic competitor and essentially an adversary of the United States. This represented a fundamental break with how America had approached China since Nixon opened the relationship.
Initially, the focus centered on trade imbalances and what Trump saw as unfair economic practices. But as the administration progressed, the scope expanded into security issues, democracy promotion, and human rights. They started doing things that would have been unthinkable in previous administrations.
Johnson identifies a clear pattern in how Trump operates on China: "As long as he feels there is something to be had where his art of the deal mastery can come up with something amazing, then he's interested and engaged." During these periods, Trump keeps the hawks in his administration "at bay."
But when negotiations get difficult or bog down, Trump either turns things over to working-level staff or "unleashes the Hawks in a very destructive way." This pattern will likely continue in the second term, making the early months crucial for determining which direction the relationship heads.
Biden's Xerox Strategy and Its Limitations
Biden essentially copied Trump's China policy but tried to implement it in what Johnson calls "a more touchy-feely or easygoing way." The new administration wanted to stabilize a relationship that was in steep decline, which made sense given how things ended with the balloon incident and other tensions.
However, Biden made some critical mistakes early on. First, framing the competition as "democracy versus autocracy" limited America's freedom of action and potentially pushed the US toward supporting certain countries like Taiwan simply because they were democratic, regardless of whether it served broader national interests.
Second, Biden adopted a "three-legged stool" approach: strengthen domestically, deepen alliances, and don't talk to China while doing the first two things. This proved problematic because China is simply too big and influential to ignore. By the time the administration figured this out and started engaging, they found themselves making concessions they might have avoided with earlier dialogue.
Ironically, Biden's team ended up going further than Trump in some areas, particularly export controls. They implemented restrictions that "Matt Pottinger and other China Hawks from the first Trump Administration could have only dreamed about." But there's now serious debate in Washington about whether these controls have actually been effective.
What Makes Xi Jinping Tick: The View from Beijing
Understanding Xi Jinping's worldview is crucial for predicting how US-China relations will evolve. Unlike previous Chinese leaders who operated through collective decision-making, Xi has consolidated power to an extraordinary degree. "It's all Xi Jinping," Johnson emphasizes. "There's really no other views."
Xi's strategic thinking isn't necessarily zero-sum, but he definitely wants China to reclaim what he sees as its rightful place as a major power. The goal is to make other countries think about China's potential response whenever they're considering actions that might conflict with Chinese interests - essentially creating the same calculation dynamic that currently exists with US power.
Xi constantly probes American red lines, testing to see how far he can push without triggering serious retaliation. The problem is that America isn't great at articulating those red lines clearly or enforcing them consistently. "In Chinese culture, they only understand strength," Johnson notes. "If you don't push back, then they're going to take whatever you give them and go for another mile."
The Chinese leader faces a fascinating dilemma when it comes to Trump specifically. On one hand, Trump's chaotic governance style helps China's propaganda narrative about American decline. On the other hand, Xi sees Trump as highly unpredictable and therefore dangerous, like "a wounded animal being especially dangerous."
China's Economic Pressure Cooker: How Much Can Xi Take?
China's economy is clearly struggling, with weak growth, over-reliance on exports, and a property sector that's been deliberately deflated. Private entrepreneurs who thrived in the "wild west days" of the '90s and early 2000s are grim and upset. Average Chinese citizens have watched their main asset - their homes - lose significant value.
But here's what's interesting: Xi Jinping seems willing to accept considerable economic pain in pursuit of his broader goals. He's trying to transform China from an export-driven, real estate-heavy economy into an advanced manufacturing and AI-enabled superpower. The question is whether he can keep "enough gas in the plane" during this transition to prevent a crash.
Johnson has repeatedly adjusted his predictions about what level of economic distress might force Xi to change course. Youth unemployment has skyrocketed, there have been concerning "revenge against society" attacks where individuals lash out violently, but still no major policy shifts.
The closest China came to a significant policy change was last November, when new economic measures generated some market excitement and social stability concerns peaked. But even then, the moment passed without fundamental changes to Xi's approach.
Economic technocrats constantly battle to convince Xi that he needs to maintain enough growth to prevent disaster, but he seems convinced that achieving greater self-sufficiency and resistance to Western pressure is worth sacrificing several percentage points of GDP growth.
The New Trade War Toolkit: China's Evolved Retaliation Strategy
China learned important lessons from the first trade war, primarily that they can't go "toe-to-toe with the US on tariffs because of the trade imbalance." They simply run out of things to put tariffs on too quickly.
So they've spent the last four years building what Johnson calls their "coercive retaliatory toolkit." This includes various laws like the tariff law and anti-foreign sanctions law - essentially "lawfare" weapons designed to pressure foreign companies and governments.
When Trump imposed his recent 10% tariffs, China's response was deliberately modest but strategically revealing. They used "one element from each pot of this coercive toolkit" to demonstrate their capabilities: critical mineral export bans, anti-monopoly investigations, and actions through their "unreliable entities list."
Some of these moves carried clear warning messages. The Google investigation, for instance, seemed designed to tell the Trump administration "don't go after DeepSeek or we'll take on your technology companies." Similar investigations against Intel and Apple are reportedly being considered.
The critical minerals weapon is particularly significant because it represents a fundamental shift in Chinese strategy. For decades, Chinese officials kept their dominance in rare earth processing "very much behind the curtain." But Xi Jinping changed the approach, essentially arguing that the West had plenty of warning after China's 2010 actions against Japan but failed to diversify their supply chains.
Taiwan: The Ultimate Bargaining Chip
Taiwan represents perhaps the most dangerous flashpoint in US-China relations, but it might also offer the biggest opportunity for a grand bargain. Recent speculation suggests China might be willing to help with Russia-Ukraine in exchange for significant concessions on Taiwan.
What the Chinese want is what they call a "fourth communique" - another highly authoritative US-China document that would upgrade America's position from "does not support Taiwan independence" to "opposes Taiwan independence." It sounds like a small change, but the implications could be enormous.
Johnson suspects Trump's attitude toward such word changes would be dismissive: "It's just words, I don't care." Trump's first-term team didn't seem to fully understand the complexity and history of Taiwan issues, and there's little reason to expect greater sophistication this time around.
This creates both opportunities and dangers. A pragmatic deal focused on immediate trade and economic issues might sidestep Taiwan entirely. But if Trump gets frustrated with the pace of negotiations, Taiwan could become a pressure point in ways that create genuine military risks.
DeepSeek and the Export Control Reckoning
The DeepSeek AI breakthrough has sent shockwaves through Washington's technology and policy communities. While there's legitimate technical debate about how significant the achievement really is and whether it's sustainable given export controls, the broader implications are clear: assumptions about maintaining American technological leadership through chip restrictions are now in serious question.
Johnson expects DeepSeek to become "a perfect foil" for one of the early major debates within the Trump administration about export control effectiveness. There's already a 120-day comment period on Biden's AI diffusion order, and this is where the debate will likely play out.
The response reveals classic Trump pattern recognition. While traditional administrations might panic and immediately impose more controls, Trump's reaction has been characteristic: "Good for them, don't we suck?" He's quick to blame the American side and credit foreign achievements, whether in AI development or cyber intrusions.
This mindset could actually lead to more productive policy discussions. Instead of reflexively tightening controls, there might be genuine examination of whether the current approach is working or needs fundamental revision.
Middle East Chessboard: China's Growing Influence
China's Middle East strategy has evolved from simple commercial engagement to something approaching genuine geopolitical influence. For decades, their approach was basically "we just want to be friends with everybody and we're here to do business." They deliberately avoided security commitments or taking sides in regional conflicts.
That's changing gradually. China's brokering of Saudi-Iran diplomatic relations caught many observers by surprise, though Johnson suspects both countries wanted to resume relations anyway and China simply provided convenient venue for a "nice propaganda victory."
The bigger shift is economic. Middle Eastern leaders increasingly see America as unreliable and China as a necessary partner. If you're Mohammad bin Salman in Saudi Arabia, you're thinking "Trump wants $50-60 barrel oil, my economy can't deliver that, so I need a friend" - and that friend is China.
China's December 2023 Foreign Affairs work conference laid out their strategic vision: the US and Europe combined roughly equal India, parts of Asia, and the Global South in economic terms. China sees Middle Eastern countries as crucial to this alternative power bloc, particularly through expanded BRICS membership.
Russia-Ukraine: The Potential Game Changer
China's support for Russia in the Ukraine conflict has been pretty clear despite attempts to appear neutral. "It's a little hard to straddle the fence when 90% of your body is on one side of the fence," Johnson observes wryly.
The Biden administration made serious errors in handling this issue. Secretary of State Blinken's claims at the Munich Security Conference about Chinese military support to Russia weren't backed by convincing evidence, even to allies. This damaged American credibility when later, legitimate concerns about dual-use technology transfers arose.
Now there's serious discussion in Beijing about what China might be willing to do on Russia-Ukraine to improve relations with Trump. Policy papers are reportedly being prepared with options ranging from "highly performative" measures like signing ceasefire agreements to more substantive reductions in dual-use support and financial transactions.
This creates an interesting dynamic for Putin, who has to worry that China might dial back support if they can get significant concessions from the US, particularly on Taiwan. A "fourth communique" on Taiwan would be huge for China and something they'd seriously consider trading for.
The Reality Check: Ambition Meets Implementation
One of Johnson's key insights is that ambitious policy goals often collide with practical reality. Trump's team has big ideas about reshaping the China relationship, but implementation will prove challenging.
Take the "America First Trade policy memo" that investigates everything under the sun about US-China trade relations. Johnson describes this as "loading the gun" - preparing ammunition for use if Trump becomes dissatisfied with negotiation progress by April 1st.
But actually finding things for China to buy from America isn't easy. Soybeans aren't available until later in the year, and China has already shifted supply chains to Brazil and Russia. LNG is complicated because allies like Japan and Europe desperately want American energy exports too. Boeing aircraft have delivery timelines in the late 2020s, and quality concerns make them questionable purchases anyway.
The most intriguing possibility Johnson heard in Washington was greater openness to Chinese investment in the United States as part of a broader deal. Chinese firms have leading technologies in industrial automation that could support Trump's reindustrialization goals. But getting such arrangements past Congress given current anti-China sentiment would be extremely difficult.
Looking Ahead: Pattern Recognition and Predictions
Based on Trump's established patterns, Johnson expects the administration to start with deal-making optimism while keeping the hawks "in a box." Marco Rubio at State has strong anti-China views, but he'll likely be constrained while Trump explores what's possible.
The absence of ideological China hawks like Matt Pottinger and Mike Pompeo from this administration is telling and probably deliberate. Trump wants maximum flexibility to pursue his transactional approach without ideological constraints.
But if negotiations bog down or Trump becomes frustrated, the pattern suggests a rapid shift toward confrontation. The prepared investigations and potential tariff weapons will be readily available for deployment.
The fundamental challenge remains unchanged: structural tensions between the world's two largest economies with fundamentally different political systems and global visions. No amount of tactical deal-making can resolve these underlying contradictions, but skilled management might prevent them from spiraling into genuine conflict.
Johnson's advice for understanding this relationship is to accept that some of China's global ambitions are simply unstoppable given their size and influence. The key is focusing resistance on areas where fundamental American interests are truly at stake, rather than opposing every aspect of Chinese global influence.
Whether Trump 2.0 will demonstrate that kind of strategic discipline remains the central question for anyone watching this relationship unfold.
