Unstable Grounds: Why Trump’s China Policy Cannot Guide Europe

Trump’s policy towards Beijing remains unpredictable, so European countries should urgently pursue a joint China strategy.

When Donald Trump was sworn in on 20 January, Chinese Vice President Han Zheng, whom President Xi Jinping sent in his place at Trump’s express invitation, was among the guests. Another interesting addition to the guest list was Shou Zi Chew, CEO of TikTok, the social media platform of Chinese parent company ByteDance that was going to be banned by the Biden administration. Trump granted TikTok a reprieve, even though he had initiated the ban for security reasons during his first term in office.

Trump’s invitation to Xi, the hesitant handling of Tiktok and the appointment of China-friendly entrepreneur Elon Musk as a government advisor raise questions about how tough on China Donald Trump will be in his second term.

Instead of the 60 percent tariffs promised during the election campaign, Trump only levied 10 percent tariffs on Chinese imports in the first round of announcements. But this was increased to 20 percent in late February. China retaliated with tariffs on certain agricultural goods, but left room for negotiations to avoid a fully fledged trade war. Additionally, Trump wants to review the extent to which China has complied with the Phase One trade agreement from his first term in office.

An examination of Trump’s new team does not offer any clear conclusions about his future China policy. Although China hardliners appear to be in the majority, the strategic direction remains unclear. Secretary of State Marco Rubio, who was sanctioned by Beijing for his comments on Taiwan, described the Chinese Communist Party (CCP) as “the most powerful and dangerous near-peer adversary this nation has ever faced” during his congressional hearing.

National Security Advisor Mike Waltz shares this assessment of China and is determined to contain Beijing’s influence in the Indo-Pacific region, including arms supplies to Taiwan. CIA Director John Ratcliffe and the UN Ambassador Elise Stefanik are two more high-ranking officials who stand for a hard line against China.

In contrast, Elon Musk stands out. Musk maintains close business relations with China, has access to high-ranking politicians, such as Premier Li Qiang, and has compared Taiwan to the US state of Hawaii – and describes it as a fundamental part of China, in line with official CCP rhetoric.

There is virtually nothing critical of China in Musk’s work. In light of Tesla’s EV business generating around 37 percent of its turnover in China, this development is hardly surprising. Musk and his company depend heavily on the benevolence of the Chinese government, which has significantly tightened business conditions for foreign companies in recent years.

With his direct access to the US President, Musk could have a considerable influence on the Trump administration’s China policy. To put this into perspective – even if not as a direct comparison – in Germany, automotive companies with a high dependency on the Chinese market, have played a key role in shaping the political orientation toward Beijing. Should Trump reignite a trade war with China, Tesla could quickly become the target of Chinese retaliatory measures.

It is precisely this dependency that may have contributed to Trump’s cautious trade policy towards China in his first week in office. However, if he permanently pursues a softer course, the question arises as to whether Congress and his own party would support this. A tough China policy is currently one of the few points of bipartisan consensus in the US. As Trump depends on Congress approval to pass legislation, it is likely to be difficult for him to completely ignore this stance in his China strategy.

That said, it should be borne in mind that Trump’s first term in office was characterised by multiple personnel changes. If this pattern is repeated, the influence of individuals on his policies could be limited – even if the selection of his current team was more strategically planned and better prepared this time. Ultimately, however, the direction of China policy is determined above all by one person: Trump himself.

Trump vacillates between the aforementioned poles in his position towards China. In his virtual speech at the World Economic Forum shortly after taking office, for example, he emphasised how unfair relations with China are because of the massive trade deficit with the US. But in the same breath, he described China as fundamentally “great” and added that he “really likes” President Xi. He expressed hopes that China could help to end the war against Ukraine and even spoke of possible cooperation between the USA, Russia and China on denuclearisation, which probably raised an eyebrow or two in the room.

Trump’s attitude towards Tiktok, on the other hand, seems permanently changeable, but could simply be described as transactional. During his first term in office, he was seeking to ban the platform, but now he is enthusiastic. This is primarily because of the access to young voters that he believes TikTok gave him during the election campaign.

He plays down potential security risks and, instead of a complete ban, is backing a joint venture with a 50 percent US stake. He is also open to the possibility of selling TikTok to Elon Musk, which has been discussed by the Chinese side.

Is Trump taking the national and economic security risks posed by China to the US and the global order seriously? A crucial litmus test could be his dealings with Taiwan, which plays a central role in the global chip industry and international trade flows.

While Trump’s first term in office was seen as largely positive by Taiwan’s leadership, his recent statements are increasingly ambivalent. On one hand, he accuses Taiwan of “stealing” semiconductor business from the US and raised the idea of tariffs of up to 100 percent on Taiwanese chip imports. He also emphasises that Taiwan is geographically far from the US, but close to China, while demanding that Taiwan should pay the US for its defence.

On the other hand, Trump threatened China with punitive tariffs of 100 to 150 percent if Beijing attacks Taiwan militarily. How he would actually react in an emergency, such as a Chinese blockade,  will likely become the decisive indicator of US-China policy.

An unpredictable change of course could have far-reaching consequences for the EU, especially Germany. Trump’s political volatility, his day-to-day announcements, and deal-based decisions make US China policy unpredictable and unreliable for the next four years. For Germany and the EU, the US offers no guardrail.

Instead, the EU should consistently adhere to its de-risking strategy towards China, while simultaneously working to reduce its dependence on the US in terms of security policy. Otherwise, the bloc’s ability to act could be significantly restricted, especially if Trump demands a tougher stance on China from the EU and uses US security guarantees to exert pressure.

Despite the differences, there is no equidistance for the EU regarding the US and China. The transatlantic partnership is still based – albeit in a limited form – on shared values and interests. This means it is centrally important for the EU to maintain cooperation and exchange with the US as far as possible, particularly at a working level.

At the same time, the withdrawal of the US from international institutions dedicated to solving global challenges, such as the Paris Climate Agreement, highlights the urgency of continuing to work with China in this changed geopolitical climate. Here, it is important not to lose sight of de-risking, especially with regard to green technologies.

Calls for a European rapprochement with China to counter Trump should be treated with caution. China continues to pursue the goal of restructuring the international order in a way that is not in line with European interests. Beijing’s support of Russia undermines Europe’s fundamental security interests with its war of aggression against Ukraine.

The EU and Germany must find a way of dealing with China that is based on European interests. Germany could contribute primarily by consistently implementing the China strategy announced in 2023. This focuses on de-risking instead of decoupling, protecting critical infrastructure, diversifying economic dependencies, and coordinating Germany’s China policy more closely with the EU. Greater Europeanisation of German policy vis-à-vis Beijing would not only increase resilience to geopolitical risks, but strengthen the EU’s strategic ability to act.

This article was first published with IPG Journal on February 4, 2025. It was updated to include recent developments and for editorial reasons.

About the author

Cora Jungbluth is Senior Expert in the Europe’s Future Programme at the Bertelsmann Stiftung. Her research focus is on China, foreign direct investment and international trade, especially the role of emerging economies.