During President Biden’s tenure, Donald Trump often found himself reflecting on the trade agreement he had signed with China back in 2020. Relaxing in the opulent surroundings of Mar-a-Lago, where he once hosted China’s leader Xi Jinping, Trump would express frustration to his visitors about how the White House mishandled the deal he brokered.
In his candid conversations, Trump would often criticize what he called the “stupid people” in the White House for neglecting his agreement. He mused about how, given another chance in office, he might secure a groundbreaking deal with Xi.
Now, with Trump back in the Oval Office, he’s considering rekindling discussions on a fresh trade arrangement with China. Insiders and former advisers familiar with Trump’s ambitions believe he’s eager to forge a comprehensive deal with Xi that surpasses merely adjusting trade relations.
Trump envisions a deal that would encourage significant Chinese investment and a commitment to buying more American goods, despite China’s previous failure to meet the $200 billion purchase target from the 2020 agreement. Moreover, Trump is interested in addressing broader issues, like nuclear security, in face-to-face negotiations with Xi, as emphasized by his team.
To negotiate this deal, Trump is reverting to familiar tactics like tariffs and veiled threats. Kicking off this approach on February 1st, he levied a 10 percent tariff on all Chinese imports, dubbing it an “opening salvo,” which prompted a swift response from China. He has also floated the contentious suggestion of canceling the permanent normal trading relations with China, established over two decades ago.
China remains both a formidable national security threat and a vital trading partner for the United States. Its influence extends across various crucial domains, including nuclear security, technology, and pandemic readiness. The future trajectory of U.S.-China relations—whether toward closer collaboration or increased conflict—may largely hinge on Trump’s unpredictable maneuvers as he presses China for concessions in favor of U.S. interests.
The possibility of a new Trump-Xi pact is real; however, many challenges remain. Michael Pillsbury, a trusted China expert and Trump adviser during his first term, revealed that Trump recently discussed his desire to craft a mutually beneficial deal with Xi.
Meetings have already begun to deliberate on these issues, including determining the lead negotiators, assessing China’s non-compliance with the 2020 agreement, and strategizing how to bring Beijing back to the negotiating table. “The internal debate has started,” Pillsbury noted.
Matthew Turpin, who served in the Trump administration before joining the Hoover Institute, pointed out that Trump’s keen interest in striking a favorable new deal aligns with his self-proclaimed identity as a dealmaker. “If the day ends in a ‘y,’ it’s a day that’s good for a deal,” Turpin wittily remarked, though he acknowledged Trump’s caution against any agreements he deems unfavorable.
Significant obstacles remain before reaching any deal. Notably, the Trump administration has yet to define its precise goals with China. Proposals have circulated about possible summits—either bringing Xi to Mar-a-Lago or Trump to Beijing—but nothing is set in stone yet.
Encouraged by voices like Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent, and billionaire Elon Musk, Trump has focused on the opportunity to craft a major agreement. Former officials suggest that Trump’s team continues to fault China for not sticking to the 2020 deal and criticize the Biden administration for not enforcing it.
Back in 2020, China’s commitments included market openings, better protections for technology secrets, and purchases of U.S. crops and energy. Yet, COVID-19 was cited as the reason Beijing fell short of meeting these targets.
On his first day back as president, Trump instructed his advisers to evaluate China’s adherence to the deal and decide by April whether to reinstate tariffs or other penalties. During his January confirmation hearing, Bessent hinted that Beijing might compensate by “catching up” on purchases.
Observers have speculated that China’s recent economic struggles could make Xi more amenable to a new agreement. However, mounting complexities in U.S.-China relations could complicate the prospects for a new accord. Beijing’s real estate market weaknesses have led to a heavier reliance on exports, inundating global markets with products like cars and solar panels, threatening manufacturing elsewhere.
According to Wendy Cutler, a former U.S. trade negotiator and current Asia Society Policy Institute executive, any arrangement must confront these thorny challenges. “Even if you wanted to start a negotiation with China, it’s going to be quite difficult,” she asserted.
From Beijing’s perspective, Trump is seen with cautious suspicion, expecting continued tensions. Although aware of Trump’s retaliatory trade measures, Chinese officials consider his desire to redefine U.S.-China trade relations as a potential avenue to re-enter negotiations.
In a recent paper, Zhu Min, a former senior official in China’s government, and colleagues argued that Trump’s imperative could be to honor his economic and employment growth promises to voters. However, they also noted his tendency to wield power in an unpredictable manner.
The paper stresses the importance for China to gauge Trump’s dual nature, monitoring negotiations relative to his primary political goals while leveraging his volatility.
Though some Chinese analysts remain skeptical about the prospects of reaching any deal due to the adversarial climate, Chinese officials and think tanks have been crafting proposals to attract Trump’s interest, engaging feedback from various business leaders and experts.
A former diplomat, opting for anonymity during private discussions, suggested that one Chinese offer under consideration could yield half a million U.S. jobs in sectors such as solar and electric vehicles. It may also include potential Chinese investment in U.S. ventures, expanding American exports, supporting peace efforts with North Korea, and ensuring a leading global role for the dollar—challenges that Trump has previously tackled head-on.
What precisely China would request in return is still unclear, though many believe Xi could seek relief from some of Trump’s tariffs and loosened export controls on advanced technology. Chinese entities are also reportedly exploring backchannel communications, a time-tested method for facilitating negotiations between the two nations.
Amidst this, China’s vice president, Han Zheng, met with key players like Elon Musk, who runs Tesla’s significant operations in China, to discuss future collaboration prospects.
Trump’s potential negotiators, including Bessent and Lutnick, are reviewing ideas that they believe could equalize trade dynamics. This includes inviting considerable Chinese investments in the U.S., boosting purchases of American staples such as crops and aircraft, while addressing China’s overproduction issues.
Welcoming Chinese factories into the U.S., however, remains divisive. Trump, unlike some hardliners in his administration, has historically shown willingness for investment deals—as long as they align with his broader strategic objectives and make financial sense.
Trump’s unconventional perspective on U.S. technology restrictions and Taiwan, seeing them more as leverage, distinguishes him from other policymakers. His personal rapport with Xi seems pivotal, with Trump recently suggesting they will forge a cooperative path to tackle global challenges.
Concluding on a positive note shared on Truth Social, Trump envisions prompt collaboration with Xi, eager to resolve pressing issues together for a safer world.
This article included contributions from Chris Buckley and Alan Rappeport.
