THE LONG VIEW

INTELLIGENCE BRIEFING: U.S.-China Relations at a Crossroads — Three Pathways Under Trump Executive Summary: President Trump has reoriented U.S. China policy away from great power competition toward transactional engagement, marked by a one-year trade truce agreed in Busan (2025) and elevated personal diplomacy with Xi Jinping. This shift reflects a strategic pause rather than reconciliation. Three pathways now define the relationship’s trajectory: a soft landing through sustained cooperation; a hard split if Trump becomes disillusioned; or—most likely—a prolonged period of managed coexistence where both nations buy time to reduce mutual dependencies. Current indicators favor the third scenario, as both powers accelerate efforts toward technological and economic self-reliance while avoiding actions that could trigger retaliation. However, the stability is fragile, vulnerable to miscalculation, domestic pressures, or unexpected incidents in flashpoint zones like the Taiwan Strait. Primary Indicators: - Trump’s 2025 National Security Strategy omits 'great power competition' in favor of economic and technological rivalry - U.S.-China trade war truce agreed October 30, 2025, in Busan - Trump praises Xi and emphasizes personal diplomacy while downplaying Taiwan and human rights - both nations are accelerating efforts to reduce dependencies—U.S. on rare earths, APIs, and batteries - China on semiconductors, AI, and aircraft engines - absence of high-level diplomatic breakdown or public acrimony - continued low-profile coordination despite systemic rivalry Recommended Actions: - Monitor frequency and tone of Trump-Xi communications for signs of strain or renewal - track progress on U.S. critical mineral stockpiling and rare earth refining partnerships with allies - assess breakthroughs in China’s domestic semiconductor production and AI innovation under compute constraints - evaluate whether Republican lawmakers begin challenging Trump’s China policy - watch for military incidents in the South China Sea, East China Sea, or Taiwan Strait that could trigger escalation - analyze shifts in public rhetoric from either leader as early warning signals of strategic reversal Risk Assessment: The surface calm in U.S.-China relations masks a silent arms race—not of weapons, but of resilience. Beneath the truce, both nations are engineering their escape from mutual vulnerability, knowing that the first to achieve self-sufficiency will hold the upper hand. This fragile equilibrium rests on the assumption that neither leader will act unpredictably. Yet history whispers otherwise: a single incident—a downed drone, a cyber intrusion, a misread signal—could shatter the pause. Trump’s political survival may hinge on the 2026 midterms, tempting him to revive the 'China threat' narrative if economic conditions worsen. Meanwhile, Beijing watches closely, aware that any deal with Trump may not survive his successor. The silence between Washington and Beijing is not peace—it is the sound of two giants racing against time, and the loser may not get a second chance. —Marcus Ashworth