Trump v Biden: How Will the 2024 Presidential Election Outcome Impact US-China Relations?

The 2024 US presidential election will set the course for relations with China for the next four years, with profound implications for global trade, diplomacy, and business exchange. While Trump and Biden share similar visions for their engagement with China, important distinctions between their policies could send bilateral relations and global trade onto very different trajectories. We discuss the US election’s impact on China relations in the event of a Trump or Biden win and look at the potential implications for businesses in China.

American voters head to the polls on November 5, 2024, to elect their next president, facing a consequential choice that could shape the direction of the nation for the next four years.

At this pivotal moment, we have unique insight into the potential trajectory for US-China relations in 2025, as the candidate’s prior terms provide a blueprint for the kinds of policies and tactics they would adopt.

Broadly, the two candidates have similar visions for their China policies. Both Trump and Biden share a resolute stance on addressing trade imbalances and national security concerns, underscoring the bipartisan consensus on adopting a hardline approach to engagement with China.

Nonetheless, from trade policies to technology strategies, the campaign agendas of Trump and Biden offer slightly diverging paths, each carrying profound implications for the future of US-China relations.

In this article, we look at the key differences and similarities between Trump’s and Biden’s China agendas to discuss the possible implications of a second term for either candidate, as well as the impact the outcome could have on business and trade interests.

Trade policies

Trade is arguably the most critical issue in the US’s China policy agenda, with anti-China positions garnering bipartisan support. Both sides of the political aisle agree on the importance of reducing the trade deficit with China and decreasing reliance on Chinese imports. This consensus has led to the implementation of trade barriers during both the Trump and Biden administrations.

President Trump initiated a trade war with China in 2018, imposing tariffs of up to 25 percent on a range of Chinese goods under Section 301 of the Trade Act of 1974. President Biden has not only maintained these tariffs but also increased or introduced new duties on strategically important goods.

Despite their shared stance on the necessity of reducing trade with China, the Trump and Biden agendas differ in their strategy for achieving bipartisan goals.

Trump’s China trade agenda

Trump’s agenda adopts a considerably broader, blanket approach to trade barriers compared to Biden’s more targeted strategy. The central aim of his trade strategy is to bring back manufacturing jobs to the US that have been lost to overseas competitors – particularly China.

In his 2024 campaign materials, Trump has proposed universal baseline tariffs on most imported foreign goods, as well as a mechanism to gradually increase tariffs on countries that have been deemed to devalue their currency or engage in other unfair trading practices.

While this policy does not explicitly target China, universal baseline taxes would be a major hit to Chinese exporters – particularly those selling consumer goods – as the US is an important export market for China. It would also considerably increase costs for American consumers and businesses. Meanwhile, the Trump administration has previously labeled China a currency manipulator, which means it is likely to become the target of the proposed counter-currency manipulation mechanism.

Trump has also pledged to “end reliance on China” by adopting a range of trade barriers, of which the most extreme is revoking China’s most-favored national (MFN) status. This proposal has received support from bipartisan bodies such as the US House Select Committee on the Chinese Communist Party (CCP).

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Removing China’s MFN status – called Permanent Normal Trade Relations (PNTR) in the US – would allow the US to subject it to all manner of discriminatory and unilateral trade tariffs. This could include Trump’s suggested 60 percent or higher blanket tariffs on Chinese goods. It would also lead to serious deterioration of US-China relations, and doubtlessly be met with litigation as both the US and China are WTO members.

It is as yet unclear whether Trump is serious in his intentions to take such a bold step, or whether it is simply election rhetoric. Such a move could significantly harm the US economy and the country’s standing in global trade and diplomacy and would prove extremely unpopular among business groups. The decision would also be subject to a congressional vote, and could therefore require bipartisan support, which is currently not evident.

Besides his musings to remove China’s MFN status, Trump has pledged to adopt a four-year plan to “phase out all Chinese imports of essential goods”, including “everything from electronics to steel to pharmaceuticals”. He has vowed to introduce rules that will prevent US companies from investing in China and vice versa, “allowing only those investments that serve American interests”. He has also called for a ban on federal contracts for any company that outsources to China.

Finally, a cornerstone of Trump’s campaign agenda is the introduction of the Trump Reciprocal Trade Act to “stop the flow of American jobs overseas”. This Act would give the US president the authority to impose reciprocal tariffs on a country’s goods if it imposes tariffs on US-made goods that are higher than those imposed by the US. While this Act does not explicitly mention China, Trump is clear about which countries the Act is designed for in one of his speeches: “If India, China, or any other country hits us with a 100 or 200 percent tariff on American-made goods, we will hit them with the same exact tariff.”

US trade policy under Biden

While the Biden administration has proved just as determined to curb trade with China as its predecessor, the incumbent president’s approach has been more targeted.

Unlike Trump, Biden has not proposed any blanket tariffs on Chinese goods, nor has he as yet voiced his opinion for (or against) the proposal to revoke China’s MFN status.

On the other hand, as we have seen, Biden has not shied away from hardline tactics. The core difference is that Biden has sought to target certain strategic sectors, such as renewables, critical materials, semiconductors, and healthcare products, among others.

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In May 2024, the Biden administration raised tariffs on 14 categories of imports from China. These included quadrupling the tariffs on Chinese-made electric vehicles (EVs) to 100 percent and doubling tariffs on goods such as semiconductors and solar cells to 50 percent.

These product categories have been chosen specifically because they serve to bolster Biden’s “Investing in America agenda”, which seeks to spur the growth of strategic industries in the US, such as EVs, renewable energy, and semiconductors. The additional tariffs on Chinese imports are the second half of the Investing in America agenda – providing subsidies and incentives to grow these industries on one side and protecting them by barring cheaper imports on the other.

Biden’s core campaign promise for 2025 is to “Finish the Job”, indicating a second term would see further efforts to target Chinese industries that are deemed to undermine the US’s domestic manufacturing efforts and national security concerns (in the case of critical materials). This may take the form of extending Trump-era tariffs, removing tariff exemptions (or allowing exemptions to expire), and further raising tariffs on more strategic sectors.

In addition to increasing tariffs, the Biden administration also vowed to take action against countries and importers that seek to circumvent the rules and avoid tariffs, something Trump has also called for. Biden also said he would work with Mexico to prevent China and other countries from evading tariffs by importing products through Mexico.

Technology, research, and national security

Scientific and technological development has become another key battleground in US-China relations under both Trump and Biden. Central to the conflict is the US’s claim that China has gained an unfair advantage over competitors through practices such as forced technology transfer and corporate espionage, a view that is firmly held on both sides of the political aisle.

China’s technological and scientific development is seen as a matter of national security, with anxiety surrounding the US’s reliance on Chinese imports for critical technologies as well as China’s military development. Both Trump and Biden have imposed measures that seek to guard against this alleged behavior and more broadly curb China’s technological and military development.

Trump and Biden have adopted different strategies for this policy. Trump, being more domestically focused, launched initiatives to curb collaboration with Chinese scientists and academics within the US and limit Chinese companies and individuals’ investment in US land and infrastructure.

Meanwhile, Biden has adopted a more outward-looking approach to curb China’s technological advancement, imposing export restrictions on key technologies and putting pressure on allies to do the same.

Technology and national security policy under Trump

In 2018, Trump launched the China Initiative as part of his national security strategy. This was a controversial counter-espionage measure targeting Chinese academics and researchers working in the US. The China Initiative allowed the US Department of Justice (DOJ) to investigate and prosecute “non-traditional collectors” such as Chinese researchers in labs, universities, and defense bases that “are being coopted into transferring technology contrary to U.S. interests”.

This initiative has become a clearly partisan issue. In 2022, the DOJ, under Biden, abandoned the China Initiative following criticism from civil rights groups that it racially profiled and discriminated against Asian Americans and “fueled a narrative of intolerance and bias”.

Since then, House Republicans have sought to reinstate the China Initiative by inserting it in a House spending bill. However, it was later removed from the bill thanks to efforts by Democratic lawmakers.

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Trump has lambasted the DOJ’s decision to shut down the program. Should he win the election, he has stated that “efforts [to curtail China’s ability to conduct espionage in the US] will be expanded in a very, very big way”, and that the FBI and DOJ “will be hunting down Chinese spies”. This suggests he may make further efforts to reintroduce the China Initiative or introduce a new but similar policy.

In addition to his counter-espionage policy proposals, Trump has pledged to enact “aggressive” new regulations to limit Chinese ownership in vital infrastructure, such as energy, technology, medical supplies, and telecom, and to pressure Chinese companies to sell off holdings that “threaten the country’s national and economic security”.

During his term, Trump added more than 300 Chinese companies to the “Entity List”, a blacklist that makes it almost impossible for American companies to sell to them. These include the major Chinese technology firms ZTE, SMIC, and Huawei.

He has also stated he will impose visa sanctions and travel restrictions “to shut off Chinese access to American secrets”. In May 2020, Trump suspended visas for Chinese graduate students who have ties to universities affiliated with the People’s Liberation Army. Biden has upheld the suspension, and students were still being denied visas as recently as 2023.

Technology and national security policy under Biden

Biden has arguably gone further than Trump in efforts to curb China’s technological capabilities. One of the boldest moves taken against China during his term was the decision in October 2022 to implement sweeping export restrictions on advanced computing semiconductors, semiconductor manufacturing equipment, and supercomputing items to China.

The export restrictions aim to curb China’s ability to “obtain semiconductor manufacturing equipment essential to producing advanced integrated circuits needed for the next generation of advanced weapon systems, as well as high-end advanced computing semiconductors necessary to enable the development and production of technologies such as artificial intelligence used in military applications.”

In addition to restricting technology exports to China, the US under Biden has also pressured its allies to do the same. In January 2023, Japan and the Netherlands announced their own export controls on semiconductor equipment to China, after striking a deal with the US.

His administration’s decision in May 2024 to increase tariffs on Chinese goods was also based partly on the idea that it would “encourage China to eliminate its unfair trade practices regarding technology transfer, intellectual property, and innovation”.

Meanwhile, Biden has overseen the addition of more Chinese companies to the Entity List than under his predecessor, having added a total of 319 entities as of May 2024. Reasons for blacklisting the entities frequently include their alleged involvement in military technology and the provision of supplies to Russia.

Geopolitics and diplomatic relations

A second consecutive term for President Biden or a victory for President Trump would significantly influence US-China relations, each for distinct diplomatic reasons.

Under Biden, US-China relations have seen a blend of confrontation and unilateral actions similar to Trump’s tenure. Biden has maintained a tough stance on trade and territorial disputes, employing tariffs and continuing military activity in the South China Sea. However, he has also pursued diplomatic efforts to stabilize relations, engaging in high-level talks with China and establishing new communication channels.

A potential second term for Trump would likely see a continuation of his confrontational rhetoric and unilateral actions against China. Trump’s first term was marked by aggressive trade policies and criticism of China. However, his isolationist tendencies may reduce the US’s global presence, potentially favoring China by weakening US’s global alliances.

Despite their differences, both leaders have shown a willingness to engage in diplomatic dialogue with China, albeit with varying degrees of volatility and flexibility.

Diplomacy under a second Biden term

Under a second Biden term, US-China relations are poised to face continued challenges, influenced by complex geopolitical and domestic factors. Relations experienced significant strain in Biden’s first term due to issues such as China’s support for Russia during the Russia-Ukraine conflict and the US’s increasing engagement with Taiwan. A major flashpoint occurred on August 2, 2022, when then-Speaker of the House Nancy Pelosi visited Taiwan, prompting a fierce response from China, including military exercises and the suspension of several bilateral dialogues.

Relations further deteriorated when the US imposed technology export controls in October 2022, and upon the discovery of an alleged Chinese “spy balloon” in US airspace in February 2023. The latter incident led to the postponement of Secretary of State Antony Blinken’s planned visit to China.

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Despite these setbacks, efforts to stabilize relations resumed in 2023. High-level diplomatic engagements included Chinese Foreign Minister Qin Gang’s meeting with US Ambassador to China Nicholas Burns in May, emphasizing the need to prevent further deterioration. This was followed by significant bilateral dialogues, such as a two-day meeting between top Chinese diplomat Wang Yi and US National Security Advisor Jake Sullivan in Vienna, and Blinken’s visit to Beijing in June 2023.

The meeting between Biden and President Xi Jinping in San Francisco on November 15, 2023, at the APEC Summit, marked a crucial step in resetting the bilateral relationship. Both leaders underscored the importance of managing their countries’ interactions, with Xi calling the US-China relationship “the most important bilateral relationship in the world.”

Nevertheless, US-China relations remain fraught with tension. The Biden administration has continued to apply pressure through trade tariffs and military cooperation with allies in the South China Sea.

Meanwhile, Biden’s assertive stance on Taiwan continued to add to the friction. In May 2022, the State Department updated its fact sheet on Taiwan, omitting language that acknowledged the Chinese position of “one China” and the non-support for Taiwan independence, while still adhering to the one-China policy. During a May 2022 press conference in Tokyo, Biden stated a willingness to defend Taiwan militarily, a remark that was later clarified but nonetheless drew sharp reactions from China.

In April 2024, Biden signed a bill that included US$8 billion in military aid to Taiwan and some Asia-Pacific countries. Additionally, in a recent Time Magazine interview, he reiterated that the US would not rule out using military force to defend Taiwan, indicating a continued firm stance on the issue.

Diplomacy under a second Trump term

Under a potential second Trump term, US-China relations could follow a contentious and unpredictable path, shaped by Trump’s aggressive rhetoric and shifting diplomatic strategies.

Trump’s administration previously adopted a tough stance on China across various fronts. Besides his administration’s trade war with China, Trump took a firm stance on China’s territorial claims in the South China Sea, challenging Beijing’s position and increasing US naval presence in the region.

Throughout his first term, Trump consistently criticized China, especially during the COVID-19 pandemic, which he often referred to as the “China virus”. This rhetoric exacerbated tensions and contributed to a more confrontational relationship between the two countries.

On the other hand, it is possible that Trump will adopt a more isolationist approach in his second term, driven by pressure from within the Republican Party to reduce US overseas engagements. For instance, Trump has been a strong critic of NATO and has threatened to withdraw from the treaty, which would significantly weaken the West’s global positioning. He has also opposed the foreign aid package and has previously refused to say whether he would defend Taiwan militarily while voicing skepticism over Taiwan’s dominance in chip manufacturing and claiming that they “took our business away”.

This could lead to a retreat from the international community, potentially reducing foreign military aid and diplomatic support for allies around the world, including Taiwan. Trump’s less interventionist strategy might tilt the balance of power in China’s favor in strategic regions like the Asia-Pacific.

Moreover, despite Trump’s volatile demeanor, he has demonstrated a willingness to engage in diplomatic dialogue with China and make concessions. For example, in June 2019, Trump relaxed the ban on US exports to Huawei. While Trump has praised President Xi personally, his policies towards China remain fluid and could shift based on diplomatic negotiations and domestic pressures.

China’s view on the 2024 election

China finds itself in a precarious position with regard to the outcome of the US presidential election. Regardless of whether Biden or Trump secures a second term, China anticipates facing challenges due to the bipartisan anti-China sentiment prevalent in the US. Both candidates will face pressure to continue hardline policies towards China, maintaining a confrontational approach in various spheres.

To counter unilateral actions by the US, China has been fortifying its toolkit of measures, including counter-tariffs and export controls. In April 2024, China passed a new Tariff Law, formalizing rules for imposing anti-dumping and counter-tariffs on imports. Additionally, the Anti-Foreign Sanctions Law, passed in June 2021, empowers China to respond to foreign sanctions with its own counter-sanctions, affecting individuals and companies operating in the target country.

China has already demonstrated its readiness to impose countermeasures on the US. It has recently launched anti-dumping probes into chemical imports from the US, EU, Japan, and Taiwan, restricted exports of high-end technologies, and imposed export restrictions on key metals for chip production. These measures are widely seen as retaliatory responses to US actions.

The intent behind these actions is clear: China aims to safeguard its national interests and counter any attempts by the US to exert pressure through unilateral measures. By diversifying its toolkit and implementing targeted responses, China seeks to mitigate the impact of US policies on its economy and maintain its position in the global arena. However, the escalation of trade tensions and technological competition between the two countries underscores the fragility of the US-China relationship and the potential for further deterioration, regardless of the election outcome.

Business impacts and policy considerations

The potential impact of the election outcome on businesses ranges from increased supply chain disruptions and market volatility to more precarious investment climates and regulatory environments.

Under either administration, US-China relations will continue to be tense. Both parties share a desire to address the trade deficit and reduce reliance on China, suggesting that risks are relatively similar regardless of the election outcome. However, Trump’s approach may carry a higher level of unpredictability, and his broader trade policies could potentially kick off another trade war. It nonetheless remains uncertain whether he will actually implement these plans were he to win.

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At the same time, academic and research collaboration could face increasing challenges under either scenario, impacting innovation and knowledge-sharing. Further investment restrictions on China by the US could complicate business operations for US companies, potentially making doing business in China more challenging.

Supply chain disruptions and market volatility are additional concerns for businesses, particularly in light of trade tariffs and potential countermeasures from China. Any escalation of military conflict in the Asia-Pacific region could exacerbate these disruptions, leading to significant disruption and market instability.

The overall investment climates and regulatory environments could also be affected, with American companies possibly getting caught in diplomatic firestorms between the two countries. However, it is worth noting that China has refrained from specifically targeting US companies thus far, and has strived to increase foreign investment and improve the business environment for foreign companies in general.

A recent AmCham Business Climate Survey Report indicates that US-China relations are a major concern for American businesses, particularly those in the technology and R&D sectors. Despite this, the survey, which was conducted in 2023, indicated cautious optimism among some respondents, with approximately 30 percent anticipating improvements in bilateral relations in 2024. This reflects a slight shift in sentiment compared to previous years, suggesting that Biden’s efforts to engage with China may have improved the outlook among investors.

It is worth noting that the survey was conducted before Biden’s tariff hikes, an act that could make companies more pessimistic about Biden’s positions on China. Meanwhile, AmCham members also expressed the desire for the US government to moderate its rhetoric and engage in effective, high-level dialogues. A Trump win seems to run counter to this desire, given his penchant for heated rhetoric.

US companies should seek to further diversify their supply chains and factor further trade tensions into their business plans to mitigate the risk of disruptions. It will also be important to assess risk exposure in both markets, considering factors such as tariffs and export controls.

Preparing for either outcome

The forthcoming US presidential election carries significant implications for trade policies, technological competition, and geopolitical dynamics between the two global powers. Regardless of the election outcome, the bipartisan consensus on China suggests that risks remain relatively consistent.

Against this backdrop, stakeholders must remain vigilant and proactive in preparing for potential disruptions. Diversifying supply chains, assessing risk exposure in both markets and staying informed about policy developments are essential strategies for mitigating potential impacts on business operations.

Moreover, ongoing analysis and adaptation are imperative in navigating the dynamic geopolitical environment. The nuances of US-China relations require continuous monitoring and adjustment of business strategies to align with shifting policies and market dynamics. This adaptability will be crucial for businesses to seize opportunities, mitigate risks, and maintain resilience amid evolving geopolitical tensions.

This article was first published on June 10, 2024, and last updated on July 21, 2024, to reflect the latest updates.

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