Alicia García-Herrero, chief economist for Asia-Pacific at the French investment bank Natixis, commented on this potential shift. García-Herrero, a Spanish national and one of Europe’s leading experts on China, is based in Hong Kong. She also serves as an adjunct professor at the Hong Kong University of Science and Technology (HKUST), and a senior fellow at the European think tank Bruegel. Despite traveling across Europe and India during the holiday season, García-Herrero discussed these matters via email and messaging apps. She predicted that Donald Trump, who cultivated a public rapport with Russian President Vladimir Putin during his first term (Jan. 2017–Jan. 2021), would likely employ strategies aimed at driving a wedge between Russia and China. Commenting on the rising possibility of China’s military action against Taiwan amid its economic challenges, she said, “The likelihood is increasing, though I sincerely hope it doesn’t happen.”
How would Trump’s second-term China policy differ from the first?
“It would likely differ slightly from the first-term approach. While the administration might continue to exert pressure on China, it could focus more on striking deals that maximize U.S. interests. With changes in China’s status and global dynamics since Trump’s first term, shifts in strategy seem possible.”
During his campaign, Trump pledged to impose a 60% tariff on Chinese imports while referring to Chinese President Xi Jinping as a “good friend” and an “amazing person.” This suggests a dual-track strategy of pressuring China through stringent trade policies while keeping the door open for dialogue. This approach is mirrored in the second-term Cabinet appointments. Trump’s nominee for secretary of state, Florida Senator Marco Rubio, is a strong advocate for full decoupling from China. Meanwhile, some economic officials, including Tesla CEO Elon Musk, who also serves as co-head of the Department of Government Efficiency (DOGE), reportedly favor maintaining trade relations with China while upholding high tariffs.
Given Trump’s posts on Twitter (now ‘X’) before his political career, doesn’t his animosity toward China appear deeply ingrained?
“Trump’s antipathy toward China is unlikely to waver. However, the hardline approach during his first term yielded limited concessions from China. In the meantime, China has made significant strides in self-reliance across various sectors, particularly technology. That said, its economy still has a long way to go and remains susceptible to U.S. pressure.”
China has intensified its efforts to achieve technological self-sufficiency, especially in semiconductors. ChangXin Memory Technologies (CXMT) began producing high-bandwidth memory (HBM) in Aug. 2024, one to two years ahead of schedule. While its products currently lag behind those of South Korea’s SK Hynix and Samsung Electronics, the development highlights China’s ongoing progress. Earlier, in May 2024, China launched a record-breaking semiconductor investment fund valued at 64 trillion won ($43.8 billion).
Hasn’t the external landscape shifted significantly, with China and Russia deepening their ties in response to U.S. pressure?
“During his first term, Trump openly displayed a rapport with Putin, sparking domestic controversy over their perceived ‘bromance.’ While he seems to maintain a favorable view of Putin, he has been more cautious about making such remarks during his re-election campaign. Trump is expected to employ various strategies to drive a wedge between Russia and China. Russia currently supplies natural gas to China through the ‘Power of Siberia’ pipeline, and Trump may seek to disrupt Russia’s plans to expand gas exports to China via the under-construction ‘Power of Siberia 2′ pipeline. He could also leverage U.S. natural gas exports to pressure Putin into peace negotiations over Russia’s ongoing war, potentially encouraging the redirection of Russian gas supplies to Europe instead of China.”
What about Trump’s stance on Iran?
“Trump’s stance on Iran is markedly different from his approach to Russia. He has shown strong disdain for Iran while maintaining a staunchly pro-Israel position, as demonstrated by his recognition of Israel’s annexation of the Golan Heights following the collapse of Syria’s Assad regime. A second Trump presidency would likely intensify pressure on Iran. Meanwhile, it seems unlikely that Russia or China would intervene to support Iran.”
Given China’s economic struggles, do you foresee an increased likelihood of a military invasion of Taiwan?
“The likelihood of the invasion is growing. I can only hope it doesn’t happen. Heightened tensions between China and Taiwan will inevitably escalate tensions on the Korean Peninsula as well. Previously, China’s influence in the region was the primary concern. Now, Russia’s involvement, particularly following North Korea’s troop deployments to the Ukraine-Russia war, has further complicated the situation. The Korean Peninsula is more precarious than ever. A Chinese invasion of Taiwan would also pose significant challenges for Europe. Cross-strait tensions are a global risk factor.”
The Biden administration has pledged unconditional intervention if China invades Taiwan, but Trump has yet to outline specific policies. In a pre-election interview with The Wall Street Journal, he addressed related questions by stating, “If you [China] go into Taiwan, I’m sorry to do this, I’m going to tax you [China], at 150% to 200%.”
More nations are adopting a “new neutrality” stance amid the U.S.-China divide.
“The middle ground has expanded, but more countries seem likely to lean toward the U.S. Trump’s strategy would likely involve pressuring those in the middle to observe their reactions.”
According to Bloomberg, at least 101 countries have adopted a neutral stance, positioning themselves between a U.S.-led Western bloc and another dominated by Russia and China. These nations include Saudi Arabia, the United Arab Emirates (UAE), Qatar, Israel, and key African countries such as Nigeria, South Africa, and Egypt. In Asia, India, Pakistan, Indonesia, Thailand, Singapore, and Vietnam are categorized as neutral nations, alongside Brazil and Mexico in the Americas.
+Plus Point
China-Russia energy partnership solidified by record gas imports
The United States’ intensified pressure on China and Russia appears to have strengthened the two nations’ “energy alliance.” According to Gazprom, the world’s largest energy producer, daily deliveries of Russian natural gas to China via the Power of Siberia pipeline reached a record high on Dec. 7, 2024.
Since 2019, Russia has supplied natural gas to China through the Power of Siberia pipeline, which links the Chayanda gas field in Siberia to Chinese markets. As of Dec. 1, Gazprom, a majority state-owned Russian energy corporation, increased the pipeline’s annual transmission capacity to its maximum design output of 38 billion cubic meters.
Russia’s invasion of Ukraine in Feb. 2022 disrupted its natural gas exports to Europe, prompting a strategic pivot toward markets like China. Consequently, China is projected to become the largest importer of Russian natural gas in 2024. In June 2024, Gazprom announced that the “Far East” route, capable of delivering an additional 10 billion cubic meters of gas annually to China, is slated to begin operations in 2027. In addition, Russia is moving forward with plans to construct the Power of Siberia 2 pipeline, designed to transport 50 billion cubic meters of gas annually from the Yamal region in northern Russia through Mongolia to China.
Russia’s evaluation of the financially demanding Power of Siberia 2 project underscores China’s interest in increasing its imports of Russian energy. Once completed, the pipeline is expected to make China Gazprom’s largest customer, surpassing European markets.
☞ Who is Alicia García-Herrero
Alicia García-Herrero is a renowned economist with expertise in financial markets, monetary policy, and emerging economies, particularly in Asia and China. She is the Chief Economist for Asia-Pacific at Natixis and a Senior Fellow at Bruegel, a leading European think tank. In addition, she is an Adjunct Professor at the Hong Kong University of Science and Technology (HKUST) and serves as an economic advisor to the Spanish Government. Previously, she was the Chief Economist for Emerging Markets at Spain’s Banco Bilbao Vizcaya Argentaria (BBVA).
