When Competition Becomes the Baseline: One Year of Trump 2.0 and US-China Relations
By Tian GAO
Tian GAO is an affiliated researcher with the Ghent Institute for International and European Studies (GIES).
The first year of Donald Trump’s return to the White House has quietly reshaped how competition between the United States and China is understood and managed. A particularly consequential shift lies not in new policy instruments, but in expectations. Measures once treated as conditional bargaining tools are increasingly interpreted as permanent constraints, maintained regardless of dialogue or concessions. This change has altered how restraint, escalation, and stability are assessed on both sides. By analysing this shift in interpretation and anticipatory logic, the paper shows how competition is increasingly treated as a baseline rather than a contingent condition, with implications that extend beyond Washington and Beijing to the wider international environment.
The Shift in Baseline Expectation
The first year of Donald Trump’s return to the White House has not simply added new frictions to US–China relations. More fundamentally, it has contributed to a recalibration of the baseline against which both sides interpret each other’s intentions and behaviour. A particularly consequential shift concerns the expectations of what kind of relationship is now perceived ‘normal’. Competition is no longer framed as a contingent problem to be managed, but increasingly as a durable condition of interaction. China and the United States need to clarify the objectives of “normalised competition” (常态化竞争)[1] and manage mutual perceptions and expectations regarding their bilateral relationship.
The shift did not happen overnight. It emerged through a sequence of interactions in which short-term pressure was gradually reinterpreted as long-term intent. Early measures under the second Trump administration were initially interpreted through familiar lenses, with confrontation primarily unfolding around tariffs, critical minerals, and the AI race. In Washington, renewed economic and technological restrictions were framed as instruments of leverage aimed at correcting behaviour rather than signalling a structural rupture. Within his first month in office, Trump launched a new round of measures against China, Canada, and Mexico, marking the onset of what was later termed ‘Tariff 2.0’. At a later stage, he reintroduced the concept of ‘reciprocal tariffs’ which is not the usual definition (Mavroidis, 2025) and formally initiated a new phase of US-led diplomatic confrontation centred on the US–China trade war, which became the defining thread of the 2025 global tariff conflict. Following the Trump-Xi meeting in Busan in October 2025, which was widely perceived as a major breakthrough, Washington announced a suspension of additional tariffs and extended the existing pause. However, the broader tariff framework and enforcement mechanisms remained intact, limiting the outcome to largely superficial progress.
From Beijing’s perspective, the same moves were first treated as episodic pressure from an idiosyncratic leadership. However, as these measures were sustained and widened, the interpretation on both sides began to change. What had been seen as tactical coercion came to be understood as structural positioning. This shift in interpretation did not remain confined to the assessment of past behaviour but began to inform expectations about future intentions.
The reinterpretation altered expectations about the future behaviour, reshaping how subsequent actions were interpreted (Jervis, 2017). Once both sides began to assume that constraints might persist regardless of immediate concessions, the logic of interaction changed. Stability is no longer the default outcome of competition, but only one possible result among others. Continued instability becomes stability. As a result, policymaking increasingly proceeded from the assumption of prolonged tension rather than conditional normalisation. This change in expectation is analytically decisive because it transforms how restraint, compromise, and escalation are evaluated. Actions that might previously have been read as bargaining moves are now rather interpreted as indicators of long-term intent.
The argument of the present article is that the most consequential effect of the first year of Trump 2.0 lies in this transformation of baseline expectations. Rather than asking whether the relationship can return to a previous balance, both sides are increasingly preparing for a future in which rivalry is assumed to persist, in a more pragmatic way. This shift in anticipatory logic already shapes not only bilateral policy choices but also the wider regional environment in which third parties must position themselves.
Reconfiguring Competition: From Strategic Rivalry to Structural Contestation
The significance of Trump 2.0 lies less in the novelty of specific policy tools than in the way China has been increasingly redefined in strategic thinking. However, this shift did not originate with Trump’s return. Rather, his second term has accelerated a longer discursive re-labelling process in US strategic thinking. While earlier policy documents increasingly framed China as a strategic competitor, the 2025 National Security Strategy (NSS) no longer contains explicit references to such a label, instead foregrounding the need to rebalance economic relations with China. Simultaneously, from the perspective of Chinese analysts, this softening should not be read as a retreat from competition, but rather as a transitional phase (Wang, 2025; Xu, 2025; Sun, 2026; Ni, 2026). The underlying logic of US policy has continued to evolve toward a more structural understanding of rivalry, in which China is treated not merely as a difficult competitor but as a systemic challenger to US power and the US-led established international order. This framing was already clearly articulated in the 2022 US National Defence Strategy (NDS), which defined China as the United States’ “pacing challenge”, signalling a long-term and systemic orientation of competition rather than a situational one.
The renewed tightening controls in the trade, technology and supply chains domain during the last year mark a shift in the role these instruments play in US–China interaction. Earlier uses of economic pressure were embedded in a bargaining context in which concessions remain attainable. Under the second Trump term, however, such measures have been maintained and expanded without signal of reversibility, even in the context of continued diplomatic contact. Repeated disconnection between dialogue and de-escalation increasingly offered a different interpretation: that pressure had been decoupled from bargaining altogether. This decoupling became the most visible in early 2025, when the trade confrontation reached its peak after successive rounds of escalation on both sides, with the US imposing tariffs of up to 145% on Chinese goods and China retaliating with equivalent tariff increase alongside export controls on rare earth elements. It is this persistence, not the existence of the toolkits themselves, that has changed their meaning. They have shifted from being conditional leverage within a negotiable relationship to safeguards against what is now seen as a lasting strategic risk. Once this reinterpretation is accepted, restrictions no longer signal pressure with the intent to achieve agreement but instead reflect an expectation of lasting constraint (Glaser, 2010).
For Beijing, the first year of Trump 2.0 has not only intensified external pressure but has also raised more fundamental questions about how China is now being perceived as an international actor. The whole world is waiting for China’s reaction. What is increasingly at stake is not simply the cost imposed by specific US measures, but the growing difficulty of restoring a relationship in which Chinese behaviour is seen as responses to policy incentives and sanctions, rather than structural distrust. This reveals a deeper pattern of structural misrecognition. What was often framed as a status competition rested on persistent failures to recognise China’s identity claims and intentions (Larson & Shevchenko, 2010).
Based on this, Chinese policy towards America increasingly reflects a pattern of what can be described as defensive repositioning embedded in realpolitik beliefs. This is visible in efforts to reduce external vulnerability in key technological sectors, to diversify economic and diplomatic partnerships, and to strengthen narrative contestation over China’s role in the international system.
The result is a subtle but consequential shift in the logic of China’s external behaviour. As long as US actions are expected to remain decoupled from Chinese concessions, the incentive to pursue tactical reassurance diminishes. In its place emerges a strategy orientated toward resilience under conditions of enduring misrecognition. This shift closes the interpretive loop outlined in the previous sections. US efforts to impose long-term constraints are read in Beijing as confirmation of structural distrust. Chinese defensive repositioning, in turn, reinforces the US perception of China as an intractable challenger. It is through this mutually reinforcing dynamic that rivalry becomes increasingly difficult to reverse. The first year of Trump 2.0 has not introduced an entirely new set of instruments in US–China relations, but it has decisively altered the way existing instruments are used and interpreted. Trade tariffs, export controls, and technology restrictions were already present before Trump’s return to office. What has changed more fundamentally is the role they now play in the bilateral relationship. Measures once embedded in a logic of conditional pressure and potential exchange have increasingly come to function as elements of enduring constraint, maintained independently of diplomatic engagement and justified in long-term security terms.
This shift in the function of pressure has had important consequences for interaction. On the US side, the persistence and expansion of economic and technological restrictions suggest a growing willingness to treat constraint itself as a stable policy objective rather than as a temporary bargaining device. On the Chinese side, the cumulative reading of these measures has progressively weakened expectations that tactical accommodation on specific issues can restore a broader pattern of stabilisation. Engagement and restraint have thus become partially decoupled: dialogue continues, but it no longer reliably signals the prospect of reciprocal easing.
For Europe, this transformation is not merely a background condition but an increasingly structuring constraint. The EU’s longstanding strategy of balancing economic engagement with China and security alignment with the United States was premised on a degree of fluidity in US–China relations. As the relationship becomes more organised around an enduring constraint rather than conditional bargaining, the strategic space that enabled such calibrated positioning narrows. European actors now operate in an environment where policy shocks are more persistent, and where choices made in technology, investment screening, export controls, and supply-chain governance are less easily reversed.
At the same time, the European experience also highlights that this is not a story of global economic decoupling. Trade, investment, and diplomatic contact across the Atlantic and with China remain substantial. What has changed is not the volume of interaction, but its governing logic. As pressure becomes more durable and less negotiable, external actors face growing difficulties in compartmentalising economic cooperation from strategic competition. This complicates the EU’s pursuit of “de-risking without decoupling” and increases the political costs of sustained ambiguity.
Implications of an Enduring Rivalry
In this sense, the first year of Trump 2.0 marks not simply an intensification of US–China competition, but a recalibration of the broader international environment in which that competition is embedded. For Europe and other third parties, the central challenge is no longer how to navigate episodic trade disputes between Washington and Beijing, but how to adapt to a relationship increasingly governed by long-term constraint and preventive logic.
Ultimately, the significance of the first year of Trump’s second administration lies less in any single tariff decision, export control, or diplomatic exchange than in this cumulative transformation of expectations across the system. Once pressure is widely interpreted as enduring rather than intermittent, thresholds for mutual restraint reduce the scope for rapid stabilisation through discrete action deals. Whether this pattern consolidates into a stable equilibrium of long-term rivalry or eventually reopens space for a renewed coupling of pressure and negotiation will depend not only on Washington and Beijing, but also on how Europe and other major actors respond to the evolving structure of US–China competition.
References
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Jervis, R. (2017). Perception and misperception in international politics: New edition. Princeton University Press.
Larson, D. W., & Shevchenko, A. (2010). Status seekers: Chinese and Russian responses to US primacy. International security, 34(4), 63–95.
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[1] New Normal (xin changtai 新常态) was first introduced into Chinese policy discourse in 2014 by Xi Jinping. It redefines stability as a condition of moderated growth and structural adjustment rather than expansion, thereby providing a cognitive and discursive basis for extending normality beyond the economic domain. Within this framing, competition is understood not as a temporary disruption but as a durable and regulated condition of coexistence, a perspective that can be described as “normalised competition” (changtaihua jingzheng 常态化竞争). Xinhua News Agency, “习近平首次系统阐述‘新常态’,” XinhuaNet, November 9, 2014.