Bullying the bully: How China Holds a Sword of Damocles Over America

“The United States has more Nuclear Weapons than any other country. I have instructed the Department of War to start testing our Nuclear Weapons on an equal basis.”  (The U.S. last tested a nuclear weapon in 1992.)

These were Donald Trump’s words just an hour before his meeting with Chinese President Xi Jinping, clearly showing off its power moments before a high stake diplomatic engagement.  

There have been quite a few moments when global observers found themselves in a state of anxious anticipation, wondering what would come next, especially since Trump’s return to the White House in 2025. This week he took the much anticipated “Asia Darshan” wherein he visited Malaysia, Japan & South Korea on the sidelines of the ASEAN and Asia-Pacific Economic Cooperation (APEC) summits, signifying a deliberate recalibration of American engagement in the Indo-Pacific theatre. Consequently, the Xi-Trump meeting remained the talk of the geopolitical and academia circles. The in-person interaction between the two leaders after a protracted 6 year hiatus has been appraised by the scholars as a ‘12 out of 10’ episode. However, what appeared as choreographed handshakes and cordial smiles create an illusion of the undying friendship with the nation; yet, this veneer of cordiality belies enduring strategic antagonism. 

America and China are undoubtedly the two supreme powers prevailing over the world in the present times. The struggle between the two to acquire more power and incentives to hold the influence for puppeting the world order is also quite evident. Chinmerica’s (a term coined by historian Niall Ferguson) relation can be traced as a bitter-sweet one depending on the whims of the contemporary leaders. From being allies during the II World War to cut throat rivals in the 21st century, the dynamics of this relation has been on a roller coaster in these years. After the Cold War, America emerged as a centre of gravity in the world order creating a unipolar global system. For decades that has been the usual way of functioning until China gradually developed as a leading economy within Asia and subsequently globally. China’s rise since the Communist party came to power has been prodigious. 

America has dodged every attempt that has been made towards creating a multi-polar world whether through dollarisation, or imposing sanctions or dictating terms to other nations, America has done everything in its power to remain relevant and at the centre of global order. But China is among the few nations who holds the position to threaten this very existing hegemony, of which the US is well aware of. All this adds up to the two nations being engaged in a head-to-head competition for ‘The Iron Throne’.

So when the leaders of the two biggest nations sit at the same table amid the heightened tariff war and turbulent geo-political environment, it marks a pivotal moment for the rest of the world to witness and contemplate.

Thursday, October 30th- Xi and Trump shared the room to discuss the ongoing sourness of their diplomatic relations. On the American side sits- US Trade Representative Jamieson Greer, Commerce Secretary Howard Lutnick, Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, White House Chief of Staff Susie Wiles and US Ambassador to China David Perdue. For the Chinese, Vice Premier He Lifeng, Xi’s chief of staff Cai Qi, Foreign Minister Wang Yi, National Development and Reform Commission Chairman Zheng Shanjie, Commerce Minister Wang Wentao and Vice Foreign Minister Ma Zhaoxu were present. The list of topics to be discussed reads long containing topics such as- fentanyl, advance chips, Taiwan, TikTok, Rare earth minerals, tariffs and much more heated subjects. To cover all of them would have been difficult in the hour and fourty minutes long meeting, but consensus on certain issues was made.

Outcomes of the talks

Tariff reduction

In the early months of his presidency, Trump unfolded some of his cards regarding his China strategy, which were no different from what he pursued for the rest of the world- imposition of tariffs. We all witnessed the bidding skirmish on the tariff rates involving both China & America. The hiatus in tariff war may see an end after Trump agreed to cut tariff rates on China by 10%.

Trump says the US will ease tariffs on Chinese goods from 57 to 47 percent, in exchange for Beijing resuming purchases of American soybeans and keeping rare earth exports flowing. In addition regarding the fentanyl  problem in the US which has led to multiple deaths and has been a stigmatising domestic issue, Trump announced that he has reduced the tariff on fentanyl from 20% to 10% that he previously imposed on China. The U.S. government has long accused China and Chinese companies of not doing enough to stop the flow of fentanyl precursor ingredients to Mexico, where they are processed into the deadly opioid before being smuggled across the southern border into the U.S. Trump has expressed his ambition of busting this drug business but tariffs are counterintuitive when it comes to globalisation & cross border trade.  

Soybeans export

America’s economy relies heavily on China’s consumption of its soybeans. It was also agreed in the meeting that China will start buying them again. “China, which just resumed purchases of U.S. soybeans after having boycotted them for months, would purchase large, tremendous amounts of soybeans and other farm products.”  says Donald Trump. Although it is beyond doubt that the American economy relies way more on China’s, then the Chinese economy does on America’s.

Ukraine

The topic of Russia-Ukraine war “came up very strongly” says Trump and further added that he & Xi will work together to solve the conflict that has been going on for more than 4 years. While observing, Taiwan “never came up” during the talks and was not actually discussed by the two. The two nations have agreed to play referee in the ongoing war but we should not get our hopes all up too high since China-Russia has a whole different relation dynamics which defines China’s role in the picture. 

Chips 

Undoubtedly chips are the new driving force behind the technological revolution. Its omnipresence makes it even more important whether in phones, EVs, computers; it is used in nearly all modern electronic devices. In the thick of present economic relations, America restricted the export of chips to China. Trump said that both the leaders discussed China buying chips from Nvidia and it is up to them. It’s no surprise that Nvidia became the first $5 trillion company in the world only yesterday because the chip topic was one of the most anticipated ones and has to find a place at the table.

Rare earths 

The most crucial of all, rare earth elements (REE) was also a part of the talks between Xi & trump. China holds the crown when it comes to REE. It is responsible for production of almost 90% of the total global production. The sectors for which application of REE is important are numerous; from defence to electronics & energy all require their use. And since China holds most of them, it has monopoly over it.  Recently, China imposed a ban on rare earth exports & it’s been a tug of war like situation for the rest of the world who depends on China. But after the talks, Trump said, “All of the rare earth has been settled.” further adding “that roadblock is gone now, there’s no roadblock at all on rare earths.”

Since China’s rise in Asia, America’s dream of a unipolar world has been subjected to threats. The centre of gravity that existed before, now seems to be absent and the new world order has emerged- a multipolar one scraping away America’s dominance & leaving the global order as a ticking wildcard. India’s approach to the world has always been full of caution and is marked by walking around on eggshells regardless of the zeitgeist. In the early years of independence, India has faced bitter moments with both America & China whether during the nuclear tests or border issues & external aggression but despite that American closeness to India which can be somewhat characterised by Chinese uprisings, is beneficial and opens the door to many profiteering opportunities for India. It can’t be ignored that America can assist in a technological upgradation like no other country. But falling for the fantasy of befriending America can be a foolish step in itself. 

“There are no permanent friends or foes in diplomacy. There are only permanent interests.” As stated by Palmerston, nations only act in self- interest. The paramount objective for the United States in its bilateral engagement with China is to curtail Beijing’s ascendancy in the new age World Order and acquisition of disproportionate global influence. China, for its part, has emerged as a resilient power, exhibiting significantly less dependency on the United States or any other state. Traditionally, American diplomacy has been characterized by a posture of dominance, metaphorically occupying the ‘taller chair’ at negotiation tables, embodying a coercive or bullying demeanor. However, the current Sino-U.S. bilateral relationship reverses this prevailing norm. Both giants are flexing their strategic muscles and capacities to advance their respective interests. Thus, the question remains: Who bullies whom? Simultaneously, determining which side exerts greater dominance is equally crucial in this contest to outmaneuver the other. 

So when Donald Trump says, “The G2 will be convening shortly;’ roll out the red carpet for some big fat disappointment. These two ‘frenemy’ nations have limited common ground on which to forge substantive agreements. The outcomes of G2 discussions are likely to be short-term, myopic solutions, which at best will act as a temporary solution for the far more colossal problem of G1, for which both of them are vouching for; Who will be the supreme power? America or China? 

Middle powers frequently find themselves overwhelmed, following the deluge of global events. Trump’s somewhat nonchalant attitude towards diplomacy makes the vista a little less imaginable, meaning making it all uncertain & unpredictable. He has made a deal with China but there is a chance that he might land in America with a totally different mood. With his overarching promises and crowing about his deal making skills, America has lost its credibility over the last few years. With the ever changing mood of geopolitics, we all have been on the edge of our seats with a few moments of peace on our hands.

Clarity in national interests, pragmatic approach & top notch diplomatic skills are some factors that will give countries an edge in dealing with this phase of geo-politics. 

It would be interesting to be a spectator to what’s going to come next or to quote Donald Trump, “This is going to be great television.”