Trump just blew up America's China policy

Driving the news: It's not that Trump is taking it easy on China. He just increased tariffs on Chinese goods to a staggering 54%.

• China, which retaliated on Friday, faces sharp near-term economic pain.
• But this time, the trade war is global and so is the backlash.
• "China is on the move, and they're going to press their advantage and try to appear as the stable, pro-trade, pro-globalization global power," says Elizabeth Economy, a China expert at the Hoover Institution and former Commerce Department official.

Breaking it down: "Trump helped create the bipartisan consensus on China but was never really part of it — even in his first term," argues Rush Doshi, a key architect of former President Biden's China strategy.

• Trump's first administration laid the foundation Biden built upon: tariffs, export controls on critical technologies, pressing allies to take stronger action on China and leaning on platforms like the Quad (U.S., Australia, Japan and India).

But Trump returned to office with a different team and a clearer sense of his own foreign policy powers and priorities.

• He's trying to unravel the CHIPS Act — which subsidized domestic production of key tech like semiconductors that are at the heart of U.S.-China competition — and has broken with his own party on everything from banning TikTok to standing with Taiwan.
• He demolished USAID, which officials including then-Senator Marco Rubio had seen as a key lever for countering China's influence. Ditto for Voice of America and Radio Free Asia. He's withdrawn the U.S. from international institutions like the World Health Organization and ripped up trade rules the U.S. largely set.
• Trump's abandonment of soft power is by design, but it also cedes the field to China, Economy argues. "If we're not in the game, we certainly can't win."

The intrigue: While his national security team has signaled continuity in some areas, like export controls, Trump's personal commitment to those policies is uncertain. He's suggested everything could be on the table in negotiations for a potential "grand bargain" with Beijing.

The other side: A White House official claimed that as a result of Trump's policies, "our allies and partners are raising their commitments to better compete with China" by spending more on defense and tightening trade and technology controls.

• The official said Trump's tariffs would bring "fairness to our trade relationships," including the "imbalanced" relationship with China.
• Trump's policies, the official argued, will "reshore our manufacturing base, especially strategic industries and supply chains — semiconductors, pharmaceuticals, critical minerals, autos, and steel and aluminum."

However, the tariffs are also sending those allies and partners into a tailspin. Consider Vietnam, a major beneficiary of the recent trend — strongly encouraged by U.S. policymakers — of companies shifting production out of China.

• While allowing the U.S. to reduce its dependence on China and strengthen strategic relationships in the region, that trend also ballooned bilateral trade deficits.
• Trump's unorthodox tariff math means Southeast Asian countries now face some of the highest tariff rates in the world. Vietnam's is a crippling 46%.
• The tariff shock gives U.S. partners in the Indo-Pacific an urgent need to hedge away from the U.S. economically, says Patricia Kim, a China expert at Brookings. "They're going to be looking towards each other and towards China. I mean, that's a given."

Trump is certainly ignoring what recently departed ambassador to China Nicholas Burns said this week was his most important advice: "Be nice to allies."

• Burns noted that the U.S. and China are peers in terms of economic, military and technological power — but the U.S. and its allies together are far stronger. If they stay together, that is.
• Ahead of Trump's tariffs announcement, Japan and South Korea held a trilateral meeting to discuss deeper economic integration — with China.
• Beijing is "enthusiastically" courting countries caught up in the tariff crossfire, Kim says. Xi will travel this month to Vietnam, Malaysia, and Cambodia.

What to watch: Xi's heavy-handed foreign policy has also led to friction with countries in the region and around the world in recent years.

• "We are essentially now depending on Xi Jinping to score own goals to keep the United States reputation and position afloat," says Economy.