Cover Story: Trump 2.0 Means Reboot of Aggressive Tariff Policy Toward China

Donald J. Trump is set to return as the 47th president of the United States, marking a historical comeback as the first former president in 132 years to reclaim the White House. His victory is underscored by a significant Republican triumph, securing control over both the Senate and likely the House of Representatives, providing a united front to advance his administration’s policies without the legislative hurdles of his first term[para. 1][para. 2]. This Republican consolidation gives Trump a substantial platform to implement his agenda, particularly focusing on reshaping trade policies, notably with China, and reducing foreign dependency[para. 3].

A critical aspect of Trump’s second term will be the assembly of his cabinet, emphasizing loyalty as a key criterion for appointments, a lesson from the high turnover and conflict of his previous presidency[para. 4]. Howard Lutnick, the co-chair of Trump’s transition team, emphasized this focus on loyalty. Trump has considered economic allies like John Paulson for Treasury Secretary and Larry Kudlow for key economic roles, both of whom share his deregulatory and tax-cutting views[para. 5]. The trade policy will likely see Robert Lighthizer, a veteran of Trump’s protectionist strategies, taking a central role, advocating for substantial tariffs on Chinese goods[para. 6].

In the foreign policy domain, speculation centers on figures aligned with Trump’s vision of “America First,” such as Bill Hagerty and Marco Rubio. Both have taken a hard stance on China, favoring decoupling from Chinese influence[para. 8]. Additionally, potential defense appointments like Michael Waltz and Tom Cotton are noted for their strong military postures, though differing views on aiding Ukraine may affect their roles[para. 9]. Trump has explicitly ruled out former first-term officials Nikki Haley and Mike Pompeo from returning to his new administration[para. 10].

Trump’s economic proposals promise radical changes, particularly with a sweeping approach to tariffs and tax reforms. His plan includes imposing a broad 10% to 20% tariff on all imports, aiming to protect domestic industries and significantly reduce foreign reliance. Additionally, he proposed abolishing federal income tax and making corporate tax cuts permanent, financing these through tariff revenue[para. 12]. Economic experts are divided, with some projecting benefits for domestic industry and trade balances, while others warn of inflation, supply chain strain, and a hefty increase in the federal deficit. Analysis suggests that the proposed tariffs could initially boost revenue but ultimately reduce import volumes over time[para. 13][para. 14].

Regarding U.S.-China relations, the campaign showed limited focus on this critical issue, despite its strategic importance. Trump’s administration plans aggressive policies like a 60% tariff on Chinese imports and withdrawing China's most-favored-nation status, which could exacerbate economic tensions and global market disruptions[para. 17]. Discussion of this aggressive stance against China’s economic influence remains contentious, with experts cautioning against substantial destabilizations of global supply chains[para. 18]. Trump's past tariffs have already diminished China’s trade relations with the U.S., with ongoing debates about the efficacy and consequences of further restrictions[para. 21].

In summation, Trump's return carries both domestic and international implications, challenging existing economic policies while promising substantial shifts in global trade dynamics, particularly concerning China. His team’s decisions will be crucial in shaping how these policies unfold, with significant impacts expected both on the U.S. economy and its international relations[para. 24][para. 28].