The second Trump administration is raising geopolitical stakes. The new president’s “America First” vision of U.S. strength, safety, and prosperity underpins the White House’s disruptive decision-making, hardball dealmaking, and high-stakes deterrence. The unpredictability of U.S. leadership, once a cornerstone of stability in the global system, is upending the postwar rules-based international order and ushering in a new era of geopolitics. U.S. allies and adversaries are reassessing hedging strategies to navigate the throes of uncertainty.
In terms of China-U.S. strategic competition, the “Trump Effect” means disrupting conventional rules and norms, upping the ante in dealmaking, and seeking to deter threats – real and perceived – to U.S. primacy. Time will tell if the Trump Effect shifts in foreign policy are surgical or systemic, and how they might reshape the global order.
President Donald Trump’s “America First” approach to China-U.S. strategic competition has begun with reasserting U.S. vital interests in the Western Hemisphere. Newly appointed Secretary of State Marco Rubio first visit abroad was to meet with Panamanian President José Raúl Mulino to discuss China’s influence in managing the Panama Canal. Central America as the destination for first Rubio’s overseas trip signifies Washington’s reprioritization of the Western Hemisphere. Panama’s openness to cease Hong Kong-based CK Hutchison’s management of port operations and agreement to withdraw from China’s Belt and Road Initiative suggests Washington’s message is yielding initial results.
As further affirmation of this regional reset, Trump’s opening salvoes of imposing 25 percent tariffs on North American neighbors, Canada and Mexico, and 10 percent tariffs on China, confirm China as a key factor in renegotiating U.S. trade expectations with both countries. In an effort to deter China’s inroads in fentanyl distribution and electric vehicle manufacturing as well as illegal migration across the northern and southern borders, the new U.S. administration seeks to recalibrate relations with both neighboring countries to limit Chinese market access in North America. The announcement of Mexican President Claudia Sheinbaum’s decision to provide 10,000 national guards to stem drug trafficking and illegal crossings at the Mexico-U.S. border and agreement between Trump and Sheinbaum to delay tariffs for one month are useful indicators of how Trump’s assertive dealmaking could reverberate beyond the Western Hemisphere.
The Trump Effect on China-U.S. strategic competition is intensifying great power rivalry. As the most consequential strategic relationship of the 21st century, China-U.S. geopolitical dynamics are a contest of competing worldviews – “America First” versus the “Great Rejuvenation of the Chinese Nation” – to determine which countries’ vision and values will prevail in reconfiguring the global system. Trump seeks to preserve U.S. primacy, whereas China’s leader Xi Jinping advocates a multipolar configuration.
China is leveraging international and regional organizations to propagate its narrative of a “common destiny for humankind.” In championing a multipolar world, Xi and the Chinese Communist Party (CCP) are positioning China as an alternative model of governance that resonates with countries disillusioned with the U.S. and Western models of democracy and market capitalism. Russia’s cooperation with China has been essential to amplifying their shared authoritarian agenda.
Trump’s call for Russian President Vladimir Putin to make a deal on ending Russia’s war on Ukraine and for Xi to help stop the war, while threatening sanctions against Russia and tariffs on China, indicates that Trump’s hardball dealmaking is raising the stakes in great power politics. Russia’s protracted war in Ukraine serves Putin’s interest of preserving his domestic political power, destabilizing Europe, and testing U.S. commitment to NATO. The security alliance’s 2024 Washington Declaration called out China as a “decisive enabler of Russia’s war on Ukraine” confirming China-Russia cooperation in undermining democratic nations with subversive tactics, including but not limited to disseminating disinformation, deploying malign influence campaigns and using Chinese cargo ships to cut subsea cables in the Baltic Sea and the Taiwan Strait. Trump is putting pressure on Beijing to demonstrate its leverage over Moscow to help end Russia’s war in Ukraine. How Xi and Putin respond will indicate the level of reciprocity and credibility we can expect in their dealmaking with Trump.
In a broader geostrategic context, China and North Korea’s involvement in Russia’s war on Ukraine highlights the increasing convergence of security interlinkages between the Euro-Atlantic and Indo-Pacific theaters. Trump’s demand that NATO members increase national defense spending to 5 percent of GDP is compelling individual NATO countries to reckon with the financial footing needed to deter the long-term geopolitical threats from Russia and China. EU-U.S. divergence and intra-EU discord are emboldening Chinese and Russian moves to destabilize Europe.
The case of Greenland spotlights how China-U.S. strategic competition in the Arctic over critical minerals and natural resources is exacerbating transatlantic friction. Although Trump’s assertive attempt to “acquire” Greenland is rattling relations with Denmark and NATO members, it also provides an opportunity for Copenhagen and NATO to forge a deal that benefits all stakeholders. By keeping European allies on tenterhooks with the Greenland issue and more broadly, impending tariffs on the EU, the Trump Effect is changing the rules of engagement for Europe.
European capitals must rethink conventional assumptions and articulate how their countries’ national interests align with or support U.S. interests. Europe could optimize its position as the world’s largest trading bloc to shape the trajectory of China-EU-U.S. trade relations and the resulting impact on European security and competitiveness. Europe recognizes that its “competitiveness is at risk” and “geopolitical shifts are turning dependencies into vulnerabilities,” as acknowledged by Christine Lagarde, president of the European Central Bank, and Ursula von der Leyen, president of the European Commission.
Trump’s modus operandi is also causing consternation in Taiwan. The island’s security will depend largely on Taipei’s effectiveness in demonstrating its geopolitical and economic relevance to the Trump administration. The recent decision of Taiwan’s legislature to reduce the government budget, including deep cuts to defense spending, reflects divisions among Taipei’s political elites, which Beijing is exploiting, and calls into question the credibility of Taiwanese President Lai Ching-te’s commitment to investing in the island’s self-defense. In addition to placing the onus on Taipei to fortify the island’s deterrence capabilities, Trump has signaled the possibility of imposing tariffs on Taiwan’s semiconductor chips. Trump’s moves will test Taipei’s ability to negotiate outcomes that benefit the Taiwan-U.S. security and economic partnership.
The Taiwan issue signifies the increasingly intertwined impact of geopolitics and technology on the China-U.S. tech race as a powerful driver of bilateral strategic competition. Both countries are vying for technological innovation supremacy, achieving digital governance dominance as well as influencing the hearts and minds of end-users as in the cases of DeepSeek and TikTok.
The emergence of Chinese artificial intelligence platform DeepSeek as a serious contender in the AI arena represents an acceleration of China’s state-sponsored efforts to exploit open-source models at lower cost and facilitate broader non-proprietary accessibility. The ability of TikTok algorithms to collect user data and shape user perceptions and attitudes contributes to China’s overarching influence and information operations.
How the Trump administration secures a U.S. ownership deal with TikTok and manages its $500 billion investment in AI infrastructure will lend insights into the role of U.S. tech titans as stakeholders in raising the stakes in the next phase of the China-U.S. tech race, and by extension, China-U.S. strategic competition.