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Trump Ramps Up His Campaign Against China: What You Need to Know

The President’s strong stance against China is usually associated with tariffs. However, a closer examination of his decisions since taking office reveals that he is contemplating a comprehensive set of economic measures against Beijing. These measures may accelerate America’s separation from a vital trading partner.

The government has proposed expanding the restrictions on the flow of investments between the United States and China. It has appointed officials who, due to national security concerns, are likely to advocate for further limitations on Chinese investments and technology sales to China. In addition, Mr. Trump implemented a 10 percent tariff on Chinese imports, which he called an “opening salvo.”

After years of both parties gradually reducing America’s economic ties with China, Mr. Trump’s actions indicate that he is prepared to sever these ties more aggressively.

Samm Sacks, a senior fellow at Yale Law School’s Paul Tsai China Center, stated that the investment memorandum issued by the administration appears to be a call to finish unwinding commercial ties with China.

“So far, pragmatists have prevailed in getting a more narrow version of decoupling,” Ms. Sacks said.

The pronouncements could be “a bargaining tool” for Mr. Trump to initiate negotiations with China’s leader, Xi Jinping, Ms. Sacks said. “But should that fail or not work out—which is probably most likely—I see this as the blueprint to complete the decoupling process.”

The uncertainty regarding the extent to which the United States will go lies primarily with Mr. Trump himself. The President is interested in potentially conveying a deal with Mr. Xi, partially because of China’s failure to fulfill the terms of a 2020 agreement between the two leaders. Current and former advisors say Mr. Trump views issues like Chinese investment more transactionally than his more hawkish advisors do. This position could result in continued economic ties in exchange for a deal that benefits the United States.

Mr. Trump has shown support for foreign investments in the United States that other Republicans consider national security concerns, such as a proposal by Nippon Steel to invest in U.S. Steel, or the potential rescue of TikTok. While campaigning, Mr. Trump stated that he would welcome Chinese companies to build auto plants in the United States as long as they employed American workers.

“I’ll tell them if they want to build a plant in Michigan, in Ohio, in South Carolina, they can—using American workers, they can,” the president said during a rally in Dayton, Ohio, last March.

During his first term, Mr. Trump retreated from a plan that would have seriously impacted ZTE, a Chinese electronics manufacturer, after Mr. Xi helped arrange a meeting between Mr. Trump and North Korea’s leader, President Kim Jong-un.

Mr. Trump’s advisors believe the president may continue exerting pressure on Beijing, as he may see this as a means to force Chinese concessions. As a result, trade tensions may escalate in the coming months.

Having imposed tariffs against China during his first term, Mr. Trump introduced an additional 10 percent levy on all Chinese imports this month, claiming that Beijing was not doing enough to curb medication flows into the United States. China responded with tariffs on American imports, restricted exports of key minerals, and initiated a Google antimonopoly investigation.

A memorandum issued by the president on his first day in office directed his advisors to examine alternative measures against China, including revoking the normal trade relations the United States has with China. The Office of the U.S. Trade Representative has now filed a trade case aimed at protecting the U.S. shipbuilding industry against Chinese competition.

Mr. Trump’s team is also discussing ways to tighten U.S. export controls, including addressing perceived loopholes in the rules governing chips and chip-making equipment. The appointments of personnel also suggest a stricter stance on Chinese investment and technology sales.

The Commerce Department, which leads the efforts to limit technology sales to China, recently replaced several long-time employees with new appointments. The nominee for assistant secretary of commerce, Landon Heid, has advocated for stricter restrictions on sales to Chinese technology companies while working at the State Department.

Regarding investments, Mr. Trump’s directive was a memorandum, not an executive order, which did not immediately affect policy. However, it tasked the Treasury Department and other agencies with establishing new rules. These would prevent U.S. companies and investors from making investments that support China’s military advancements and halt “people affiliated with China from buying up critical American businesses and assets.”

The memorandum stated that the Trump administration would implement an expedited process for investments from U.S. allies, and welcome “passive” investments from foreigners, consisting of investments where they hold no controlling stakes or managerial influence.

However, it suggested stricter restrictions on certain foreign adversaries, including China, which it claims systematically invest in the U.S. to acquire technology, intellectual property, and influence in key sectors like agriculture, minerals, and shipping.

The memo stated that the Trump administration would expand the powers of the Committee on Foreign Investment in the United States, allowing it to review start-up projects. It also ordered the committee to halt the use of “mitigation” agreements, where companies make ownership or technology changes to address national security concerns and permit acquisitions to proceed.

Mr. Trump directed his advisors to consider additional restrictions on new technologies and whether to impose limits on more investment types, such as pension funds and university endowments. He also ordered them to examine the specific structure that Chinese companies use to list on U.S. stock exchanges, which critics argue limits ownership rights and protections for U.S. investors.

Critics argue that investment flows between the countries have aided the Chinese government and military by funding activities contrary to U.S. national security and enabling the transfer of U.S. technology to China.

The Coalition for a Prosperous America, a trade group supporting protectionist measures, praised the presidential memo. It argued that U.S. investor capital had allowed China “to fund its state-sponsored genocide, military aggression, surveillance state apparatus, and other harmful activities.”

Roger Robinson Jr., a senior adviser to the group, called it “a historic breakthrough.”

“Hopefully, Congress will play its part in outlawing Wall Street’s reckless and indefensible investment practices benefiting Chinese state-controlled corporate wrongdoers to our detriment,” Mr. Robinson added.

However, some analysts suggested that the economic impact might be limited and that the order could be open to legal challenges.

Ling Chen, a professor at Johns Hopkins University’s School of Advanced International Studies in Washington, D.C., stated that Chinese investment in the United States had already significantly declined since 2017. As a result, she does not foresee much fluctuation or influence on China.

“I do not expect to see any significant changes in the overall trend,” she said.

Jim Secreto, a former counselor for investment security at the Treasury Department, said some ideas in the memo, such as reviews of greenfield projects, “exceed CFIUS’s existing authorities and could be challenged in court.”

“The Trump administration would be cautious to avoid implementation challenges that could end up undermining national security,” Mr. Secreto stated.

Source: https://www.nytimes.com/2025/02/26/us/politics/trump-china-crackdown.html

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