MARCH 2025
The United States’ Illiberal
Turn Recasts a Potential
Deal with China
By Scott Kennedy
S
everal weeks into the new Trump administration, the world is still trying to gure out what
direction U.S.-China relations will ultimately follow in the coming months and years. The
United States has now imposed taris twice on China, totaling 20 percent, for what it argues is
insucient help from Beijing in stemming fentanyl-related production and trade. On both occasions,
within minutes, China responded with counter-sanctions, a combination of taris, export controls,
trade bans, blacklist additions, and investigations. Some still believe a deal, either a grand bargain
or something more modest that nevertheless stabilizes ties, is still possible, while others believe
escalation is the more likely outcome.
The broader strategic context of bilateral ties, either cooperative or conictual, is just as important,
particularly for market actors and the countries’ two economies. The Trump administration is in the
process of fundamentally changing key characteristics of U.S. foreign policy and domestic governance in
a much more illiberal direction. Those alterations to U.S. politics and the country’s role in the world put
U.S.-China relations in an entirely new light regardless of whether Washington and Beijing can manage
their dierences. In such a new world, although tense U.S.-China relations would be highly problematic
and dangerous, stability in ocial U.S.-China relations would not necessarily be a boon for global peace
and prosperity either.
A Deal Is Possible . . .
There are multiple reasons why a deal, even with the early exchanges of penalties, may still be possible.
The rst and most important is that both sides see an upside in a deal. President Trump has never
described China as a threat; he has, in fact, repeatedly praised Xi Jinping’s leadership. A deal would
oer President Trump the opportunity to claim he re-righted the economic relationship, reduced
the trade decit, and boosted domestic manufacturing and jobs. He also wants to avoid inducing
