What does Donald Trump’s reelection mean for China and China-US relations? While it is way too early to know what Trump’s second term actually implies for the relations between the two countries, we can get some ideas from his first term.

In his first term, as I wrote in US-China Trade War: Have the Costs Been Counted? (China Daily HK Edition, July 9, 2018), Trump started a global trade war that affected not only China but pretty much the entire world. Trump and his advisers considered back then that tariffs were a necessary way to pressure China into abandoning what they called unfair trade practices. Those accusations were denied by Beijing, who said it would not “fire the first shot”, but, if necessary, would fight any trade war against China with measured responses.

I also mentioned that the trade war was the result of Trump’s bet on protectionism and bilateralism instead of free trade and multilateralism, which actually brought great prosperity to the United States not to mention its global influence.

That being said, what is the situation now in 2024, and about to start a second Trump presidential term?

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China said upon Trump’s election victory that it hopes for peaceful coexistence with the US. As a matter of fact, Chinese Foreign Ministry spokesperson Mao Ning told the media at a regular briefing that “We will continue to approach and handle China-US relations based on the principles of mutual respect, peaceful coexistence, and win-win cooperation.”

However, investors are now worried about more tensions over exports and tech competition. China’s yuan fell sharply immediately after Trump’s victory.

My summary would be the next one: No matter what, we can expect more US tariffs on Chinese goods. Indeed, we could have expected that with either administration, not just with Trump’s.

In my opinion, both countries should seek a peaceful relationship of healthy competition and even cooperation rather than taking a confrontational approach.

As I mentioned in “Kissinger’s Approach to China-US Relations Should Be Followed” (China Daily HK Edition, Dec 5, 2023), since Kissinger represented an era in US-China relations when both countries seemed to be moving closer, it saddens me (writing as someone who focused his master’s degree and part of his professional career on the relations between the US and EU and China) to see that the Kissinger ideals have not always been present in the US-China relationships these last few years.

Kissinger indeed played a crucial role in organizing then-US president Richard Nixon’s trip to China in 1972 and advocacy over the past half-century of continued engagement and warmer ties between the two countries. The 1972 visit led to the establishment in 1979 of diplomatic ties between the US and China, in which could be labeled as a golden era in their bilateral relations.

Trade-related tensions would not only harm both China and the US but also third parties. New tariffs and a second round of trade war could add to the uncertainty of the world economy — anathema to all businesspeople and investors. If we take a look at past trade wars, the results were not encouraging at all. To cite one example, the US Smoot-Hawley tariffs in 1930 are often considered as having started a trade war, which led to a massive decline in global trade by 66 percent from 1929 to 1934, according to a study from the University of Western Australia. Needless to say, the concept of globalization was not that developed in 1930 when compared to today, so the consequences of a new trade war could be even more widespread and severe, since we are living in a globalized world in which everything is intertwined.

There will be areas of course in which the US and China will compete, and that is normal. It is perfectly normal to compete when it comes to new technologies, that is, to innovate more than the other does; and it is perfectly normal to compete economically to maintain economic dominance. But competing in these areas should not mean not to cooperate in many others, and even when competing, such competition should be based on an amicable standpoint.

The ideal scenario would be that of managed economic competition, deepened crisis-management mechanisms, sustained trade and investment, limited technology restrictions, and cooperation on shared global threats.

As mentioned in the recently published report “US-China Relations for the 2030s: Toward a Realistic Scenario for Coexistence”, by the Carnegie Endowment for International Peace, the relationship between US and China “needs to move first toward a more constrained competition in which both sides stop racing toward the bottom before it can be strengthened and move toward managed competition instead of adversarial enmity. This wouldn’t mean an end to the strategic rivalry between the two, but would constrain its means and modes. That requires both to create complementary narratives that emphasize they have more to gain than lose from constraining the breadth and depth of their competition in economic and security affairs: that the existential urgency both sides are positing today is at least partially imagined, that a less-confrontational approach is possible, and that ‘time is on my side’.”

As a side note, and following the European Union’s tariffs on electric vehicles, I must also say that it is also vital for the EU to maintain its bilateral relations with China in an autonomous way, regardless of the state of the current or future US-China relations. A friendly and productive collaboration between the EU and China would also certainly be very beneficial for both parties, as well as for the whole world.

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To sum up, given that the US and China are the world’s two biggest economies, and given the fact that in today’s globalized world, they are undoubtedly intertwined economically, it is vital and crucial for both countries to cooperate as much as possible. It is also true that, they will compete in certain areas, but the most important idea must be that of cooperation rather than competition. The world is currently facing many challenges and many more in the years to come. It is acceptable to have different points of view, but it is also imperative for both countries to communicate properly. Bilateral relations should go back to the Kissinger era rather than to the way they have been these last few years. This would not only benefit both countries but the whole world.

The author is a fintech adviser, a researcher, and a former business analyst for a Hong Kong publicly listed company.

The views do not necessarily reflect those of China Daily.