This is the second part of an article published on February 6th 2025. The first part can be found here.
It is extremely difficult to accurately predict what will unfold in Trump’s relations with China or their effects on the rest of the world, but it may be possible to identify and analyze some of the major scenarios in which they will unfold, including the emerging post-Bretton Woods world order, world trade, the role of science, technology, engineering, and mathematics (STEM) in a global setting, and security issues.
As Von Der Leyen implied, the rules-based democratic liberal world order constructed on the basis of multilateral institutions dominated by Europe and the US, which began after the Bretton Woods agreement in 1944, is breaking down. The Bretton Woods system was meant to safeguard world trade and guarantee peace. In practice, it favored the former imperial powers. According to Shivshankar Menon of India’s Centre for Social and Economic Progress, this order had neither been liberal nor democratic for most countries in the world, highlighting the fact that most countries do not share the “Western” perception of the geopolitical order because it does not function for them. The emergence of the Global South or BRICS+ as a counterweight to the Bretton Woods powers is symptomatic of a major change that the US and Europe are resisting. Both the US and the EU define China as a systemic rival. It is true that China and the Global South advocate a multipolar world system that would diminish the hegemony of the NATO states and guarantee global democracy and the right to development of the Global South.
When Trump talks about making America great again he is implying that at some point, it stopped being great. When he says in his inaugural address that America’s decline stops now, with him, he is implying that he can restore some kind of greatness. The problem with his Humpty Dumpty semantics is the question of what he means by “great.” Ronald Reagan was a different kind of conservative Republican. In his farewell address he quoted John Winthrop’s vision of the US as the “shining city upon a hill,” of the US as a beacon for the rest of the world: “In my mind it was… a tall, proud city built on rocks stronger than oceans, wind-swept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here.” His was a utopic vision of the US as a world leader legitimized by moral authority. “Moral authority” is an oxymoron in Trump’s case. His dystopic vision of the US in the world today takes no kind of moral authority into account.
What, then, does “great” mean for Trump? His wavering threats of a world trade war subvert the idea of global public economic goods. His threats to take over the Panama Canal or to annex Canada or Greenland subvert the global public goods of international law. His negation of the climate crisis and the science that explains it mean a US abdication of leadership during the world’s greatest existential crisis. (The fact that he constantly confuses “weather” with “climate” is a further example of oblivious ignorance.) “Strength” seems to be a concept he associates with greatness, but “might makes right” is hardly a formula for moral authority.
In this scenario, as in others, Trump’s policy decisions seem destined to achieve the opposite of what he intends. China has already taken on a leading role in combating the climate crisis and has also begun to take a role in mediating international conflicts in the Global South. China’s economic development offers an alternative to the neoliberal US and European model. Wang insisted in his phone call with Rubio that China has no intention of overtaking or replacing anyone, while Trump threatens by economic sanctions or tariffs, if not by force, to compel any country to accept his rules. Perhaps Von Der Leyen understands this when she calls for more balanced relationships in a spirit of fairness and reciprocity. It is hard to see how Trump’s announced tactics and strategy will benefit the US as a world leader; it is easier to see how they may benefit China in this regard.
In the realm of world trade, the worldwide economic interdependence that had been accelerated by globalization may be receding, but it is still strong. Trump’s threats of trade war disrupt and interrupt development in the Global South. The Bretton Woods institutions did not consolidate development in the Global South. In the twenty-first century, the Global South dominates demographics and world trade, but the existing structures still favor the US and Europe.
This unsustainable situation is changing, and the BRICS are taking the lead, despite the resistance of US and Europe. Supply chains have become globalized. Trade wars disrupt them. Trade wars cause domestic disruption as well, as Trump admitted to the American people when he said his tariffs would bring pain, but justified the pain by saying it would make America great again. It remains to be seen how long his supporters would accept such an argument once it starts to disrupt their own lives, in contradiction of his promises. America is the world’s greatest debtor nation and one of its major creditors is China.
Yanis Varoufakis has outlined how a world trade war instigated by Trump could provoke a radical reorganization of the world economic order: “The real dilemma facing China centers on whether or not to decouple its economy from the dollar-dominated international monetary system by turning the BRICS group of major emerging economies into a Bretton-Woods-type arrangement.” This would put an end to the dominance of the petrodollar and seriously affect the US economy, as would any management of China’s foreign currency reserves that could devalue the dollar (although this would also devalue China’s foreign currency reserves).
China is the leading trading partner for most of the nations in the world. The Belt and Road Initiative and the Asian Infrastructure Investment Bank are transforming trade relations and connectivity in Afro-Eurasia. The US and Europe accuse China of unfair trade practices because of “excess production,” yet overproduction has been the economic motor since the industrial revolution, forcing the overproducers to find foreign markets. China’s diversified foreign trade offers it alternatives to the US market. Europe rejects de-coupling in favor of de-risking. China’s long-term strategy is to develop a domestic market that is prosperous enough to absorb its excess production. Trump has said that tariffs are the one weapon he holds over China. As Mao Zedong said in a different context, in the case of China, this threat may be a paper tiger.
The realm of science, technology, engineering, and mathematics (STEM) may now be the most crucial scenario for the world economic order. The US dominated this realm for most of the twentieth century. Trump boasted that the US had split the atom first. This was not true; it happened in the UK. The team that Robert Oppenheimer led to create the atom bomb included foreign-born scientists and refugees from Fascism in Europe. Trump’s current right-hand man, Elon Musk, is South African. These were examples of the immigration praised by Reagan. Yet, Trump wants to stop immigration. The fact of the matter is that the US can no longer rely on native-born talent to sustain its STEM superiority. When Musk and various Silicon Valley magnates defended visas for the foreign experts they need, Trump’s former right-hand man, Steve Bannon, erupted in rage against Musk, calling him an evil person and saying he did not understand what MAGA meant. Bannon said foreign experts would take jobs away from Americans. Reality is something different; foreign experts are needed because Americans are not supplying the necessary expertise. Fundamentalist Christian populist nationalism and Trump’s MAGA support base is anti-science. The Trump administration is eliminating scientific information from federal government databases. Trumpism is an existential threat to America’s STEM strengths. Trump and Biden both followed a policy of “small yard, high fence” to limit China’s access to high technology, especially to high microchip technology. Both the US and Europe have tried to limit the use of Huawei’s 5G technology and access to Chinese solar panels and electric vehicles. They have securitized some aspects of the trade in technology in the name of national security, but there is reasonable doubt that the real motive is that US and European firms cannot yet compete with Chinese technology.
Despite these limits, a Chinese firm has revolutionized the market for artificial intelligence applications with DeepSeek, produced with lower technology microchips and at a fraction of the cost of ChatGPT and other US applications, and what is more, in open access.
The situation is somewhat similar to that of nuclear technology after World War II. The US tried to maintain a monopoly on weapons of mass destruction by preventing the USSR from developing the corresponding nuclear technology. It came as shock when the USSR did so on its own, a shock further deepened when the USSR pulled ahead of the US in the space race by orbiting Sputnik, Laika and Yuri Gagarin. Stalin subsequently denied nuclear technology to Mao Zedong, but the PRC quickly produced its own nuclear weapons. Denying China access to high technology is only an incentive for China to produce it independently (and China is a major source of the rare earths needed for microchip technology).
One immediate Western response to DeepSeek is to prohibit its use, as Giorgia Meloni has done in Italy or as the Trump administration has done in the federal bureaucracy, or to belittle the Chinese achievement, as Sam Altman, the chief executive of OpenAI, has done, leading Mark O’Connell to write, “The giant machine for plagiarism is now complaining that it has been plagiarized. Oh, the irony.” But DeepSeek has called into question the economic model for developing high technology advocated by the oligarchy that Joe Biden warned about in his farewell address, echoing the warning made decades earlier by Dwight Eisenhower against the military-industrial complex (Eisenhower’s warning went unheeded).
China has pulled ahead in green technology and is pulling ahead in artificial intelligence and space exploration, as well as other scientific fields. Here, there is systemic rivalry as well. For the US and Europe, technology and scientific knowledge are proprietary, and they are monetized, guaranteeing an advantage in trade. China and the Global South argue that access to high technology should be a right and a global public good. China could replace the US and Europe as an alternative source for green and high technology for the Global South. The US stopped exploring the Moon in 1972. Elon Musk wants to go to Mars, but China may beat the US back to the moon.
Security issues have been emphasized by the hawks among Trump’s nominees for government positions. The Russian invasion of Ukraine began with conventional warfare, accompanied by sophisticated aerial defence systems, but the lower-level technology of drones has taken on a key role. Israel’s “Iron Dome” was no defence against the low-level technology atrocities committed there by Hamas on 7 October 2023. The whole nature of warfare has changed—as has the concept of “victory”—and both cyberwarfare and robotics are symptomatic of that change, as is the threat of disruption to transoceanic underwater cables for the transmission of data or the development of weaponry to destroy satellites. Both China and Russia have tested such weaponry, and the previous Trump administration created a new military branch, the US Space Force. Strategic thinking must take these changes into account. The EU’s relation to NATO with Trump in power and the existential threat of Russian invasion will lead to new defence strategies in Europe and a shift in Europe’s balance of relations between the US and China.
In Trump’s relationship with China, there are several hotspots in the realm of security. On the one hand, he hopes China could help persuade Russia to stop the war in Ukraine. On the other, the US criticizes China’s behavior toward Taiwan and the South China Sea. The Trump administrations response in both cases may represent a certain shift. In his phone call with Wang, Rubio said that the US does not support Taiwan independence and hopes that China and Taiwan “will peacefully resolve any differences in a way acceptable to both sides.” Trump has decreed that the Gulf of Mexico be renamed the Gulf of America. (For Trump, “America” means the US. The official name of Mexico is also “the United States” of Mexico.) Google Maps may follow Trump’s lead but that does not mean that the rest of the world will.
The US reserves for itself the right to dominate the Caribbean but denies China the same right in the South China Sea. Part of the problem there is whether the United Nations Convention on the Law of the Sea considers it to be the high seas (mare liberum) and therefore under the authority of no one and open to everyone by, or to be an “enclosed or partially enclosed sea” (mare clausum), consisting entirely or primarily of the territorial seas and exclusive economic zones of two or more coastal States. The US calls it the high seas; China calls it enclosed.
While attention is focused on the South China Sea, a greater potential security crisis is looming in the Arctic, which may explain in part why Trump would like to annex Canada and Greenland. When the Arctic ice cap melts, that sea will become a major component of world supply chains, like the Suez Canal or the Panama Canal (another site where Trump wants to impede China’s supply chains). At present, the Arctic Council, formed by Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the US, manages affairs there. China has declared itself to be a “near Arctic” nation, claiming rights there, and has developed cutting-edge ice-breaking technology for freighters to take advantage of this supply route. This, like the exploration of the Moon, could become a major cause of disagreement in the systemic rivalry over what should be considered a global public good or a proprietary commodity.
Rubio is right in saying that US ties with China are the most important bilateral relationship in the 21st century and will determine the future of the world. Whether it will be dominated by the Trump administration’s pursuit of a U.S.-PRC relationship that advances U.S. interests and puts the American people first, or by China’s call for major powers to shoulder their international responsibilities, safeguard world peace, and help all countries develop in the context of the emerging post-Bretton Woods world order, world trade, the role of STEM in a global setting, and security issues, remains to be seen as do the effects that Trump’s chaotic approach to policy-making might have.
Cover photo: The flag of China is displayed on a mobile screen with the USA flag and Import Tariff in this photo illustration in Brussels, Belgium, on February 2, 2025. (Photo by Jonathan Raa / NurPhoto / NurPhoto via AFP)