As Trump vows America First, what’s in store for China & India in Indo-Pacific?

Even in such polarised times, both the Democrats and Republicans agree that China is an adversary and India is a key partner. However, the approaches they take regarding India and China are quite different.

While outgoing President Joe Biden is a lifelong internationalist and believer in American exceptionalism, President-elect Donald Trump is a brutal transactionalist who puts trade and tariffs at the centre of his dealings.

With Trump, even as barely anything is certain considering his erratic personality-driven style of governance, there are some certainties that even he cannot change, such as the adversarial relationship with China that cannot be reset to the 2017-level when he first entered White House. He is likely to build on Biden’s hawkish China policy with his own tweaks, just like Biden revised Trump’s trade-centred policy into a coherent all-round policy.

Both the Democrats and Republicans acknowledge that the friendship gravy train has long left the station and they firmly have anti-China positions, which are not going to change anytime soon, says Anushka Saxena, a scholar of China at the Takshashila Institution.

From Biden’s internationalism to Trump’s transactionalism

Biden took office at a time when the world had been torn apart by the Covid-19 pandemic. In the cover of the pandemic, China was fast firming up an anti-US bloc with fellow authoritarian regimes in Russia, Iran, and North Korea.

China had also ramped up aggression everywhere, from subjugating Hong Kong to naked militarism in the Indo-Pacific and fighting India in the Himalayas.

Biden set out to not just counter China but to prove that democracies can win collectively over authoritarians. While he ramped up competition with China bilaterally, he also wove new alliances and revitalised older partnerships, such as propping AUKUS, reinvesting in NATO, revitalising Quad, and engaging with Indo-Pacific nations along with like-minded countries like India to counter China’s hegemonic designs.

In sharp contrast, unlike Biden whose foreign policy has been driven by geopolitics and conflict with authoritarians, Trump focuses almost completely on trade. While Biden’s solutions have been varied, such as targeted tariffs and interventions when allies and partners are attacked, Trump pitches tariffs as the only solution for everything. While Biden has sought to work with allies and partners as a believer in multilateral frameworks like NATO and Quad, Trump prefers bilateral dealings as he sees himself as a master dealmaker — hubris underpinned by him being a dynast businessman.

Trump cannot replicate his first term’s isolationism now as he would inherit a world in 2025 that is vastly different from the one he had while in office, says Swasti Rao, a Delhi-based scholar of international relations.

“When Trump first came to power, the competition with China was largely economic. Now, China has taken the gloves off and Trump cannot be a complete isolationist because China and Russia would fill the vacuum that any isolationist approach would create. What we’d likely see is a middle ground where the United States would still help partners, but in a transactional manner where Trump would help but only when he sees tangible benefits and not because it is an alliance’s obligation or it is the right thing to do,” says Rao.

What would Trump 2.0 mean for China?

For Trump, trade imbalance is the root of all problems between the United States and China and tariffs are the solution.

While there is bipartisan consensus on reducing the trade imbalance, which resulted in implementation of trade barriers during both the Trump and Biden administrations, Trump is set to turn Biden’s targeted approach into a blanket approach, says Anushka Saxena, the China researcher at Takshashila Institution.

Trump has said that he would put blanket tariffs of 60 per cent or higher on all Chinese goods. He has also said he would bring a reciprocal tariff law.

“While little can be said conclusively about how Trump would rule considering how erratic he is, we believe he would likely double down on protectionism and economic nationalism. Moreover, he may go after China over the theft of American technology and jobs. This may include a return of initiatives like the ‘China Initiative’ where he sought to uproot Russian ‘spies’ in the American research and development fraternity,” says Saxena, a Staff Research Analyst at Takshashila.

The idea is to not get into a spiralling trade war, but to force China to come to the negotiating table where the United States will have a position of strength. Trump’s previous trade war resulted in talks that led to a trade deal in 2020 known as Phase One Economic Agreement under which China was to buy additional $200 billion-worth US goods and services over the next two years. This would have served as a stepping-stone for phase two of the trade deal.

By 2022, the Phase One Agreement was dead. An analysis by the Peterson Institute for International Economics (PIIE) found that China did not buy anything it had committed to.

“In the end, China bought only 58 per cent of the US exports it had committed to purchase under the agreement, not even enough to reach its import levels from before the trade war. Put differently, China bought none of the additional $200 billion of exports Trump’s deal had promised,” noted Chad P Bown, the then-Reginald Jones Senior Fellow at PIEE.

However, now as China is facing economic woes, it remains to be seen how Trump’s tariffs may affect or how forthcoming China may be in any trade talks that the Trump administration might get into.

China could lose as much as 2.5 per cent of GDP if the United States imposes 60 per cent tariffs on all Chinese goods, according to an analysis by investment and financial services firm UBS.

While countering China is expected to remain a priority under Trump as well, it remains to be seen whether Quad or AUKUS take centre-stage or whether Trump would follow a bilateral tariff-centric approach.

Trump’s mixed signals on Taiwan & Indo-Pacific

Just like Trump has blasted Ukraine for stealing Americans’ money, Trump has also been critical of assistance to Taiwan, but he has also said that he could impose tariffs on China to the tune of 150-200 per cent if China were to invade Taiwan.

Trump presents a paradox on Taiwan as while he has so far indicated that he would not foot the bill for Taiwan’s defence, it was during his term that Taiwan received most US weapons, says Saxena, the China researcher at the Takshashila Institution.

“Trump appears to be turning US guarantees into an insurance scheme where Taiwan would need to pay for US security. Beyond such rhetoric, however, lies the fact that when it comes to Taiwan’s defence, Trump has done more than Biden and Obama combined,” says Saxena.

There are signs that policy may not actually match the rhetoric. Saxena highlights that senior Republican strategists expected to be part of Trump’s incoming administration, such as Elbridge Colby, have argued continually that China is the primary challenger and Taiwan is a major bargaining chip the United States cannot give up on.

“If the strategic thought dominating Trump’s second term is this, then the US support to Taiwan is unlikely to go anywhere,” says Saxena.

Even as the likes of Colby, who is seen as a probable National Security Advisor (NSA) in Trump’s second term, have said the US foreign policy would focus on pivoting to Asia and wrapping conflicts in Europe, international relations scholar Swasti Rao tells Firstpost that it would not be possible for Trump, or anyone for that matter, to focus on just one theatre as the competition is now global.

“The China-Russia-Iran-North Korea bloc is challenging the United States everywhere. In every theatre, one of these countries have taken up lead and others support it if possible, such as Russia in Europe, Iran in the Middle East, and China in the Indo-Pacific. So, even if Trump would want to withdraw from Europe to focus on the Indo-Pacific, it would not be realistic as he would not be in a position to focus primarily on a single theatre,” says Rao.

Trump’s penchant for bilateral engagement and disdain for multilateralism would put Asean in a tough spot — just like the last time.

“In his first term, Trump put Asean very low on his priority list. If he skips the region again, it would mean that Asean countries would find it difficult to balance between China and the United States, which is exactly what China wants as countries would then drift towards it,” says Saxena.

How will Trump’s transactionalism play out with India?

The India-US relationship is so institutional and well-rooted that a change of guard in either country is not going to derail it.

In Trump’s case, he would bring some immediate short-term relief, which is the reason behind much of the social media frenzy in India around Trump’s victory.He is expected to ditch the Democrats’ rhetoric around human rights.

However, the Democrats’ flagging of human rights concerns are such a minor issue in the bilateral relationship that it is almost inconsequential, says Rao, the Delhi-based international relations scholar.

Rao tells Firstpost that Trump would institutionalise quid pro quo as the basis of the bilateral relationship.

“Trump will be focussed more on what India gives to the United States than what it receives. Just like his first term, tariffs are expected on Indian goods and he is unlikely to overlook the trade deficit for the sake of broader ties and India’s place in countering China. If engagement with India can create jobs in the United States or lead to US exports, then Trump would be glad, but if that does not happen, he may not hold India very dear,” says Rao.

Trump’s dealings with other countries will also affect India. In the first term, Trump’s decision on many occasions adversely affected allies and partners as he pursued objectives bilaterally instead of taking partners along like Biden.

For one, Trump’s failed ‘maximum pressure’ strategy against Iran bulldozed India’s trade ties with Iran. Moreover, even as much of the attention of social media commentators has lately been on Western criticism on India’s purchase of Russian oil, India never got sanction waivers regarding Russia during the Trump administration.

Rao tells Firstpost, “Trump’s term will test the extent of the India-US relationship and its institutional strength. He is transactional. Unlike Democrats or traditional Republicans like George W Bush, he is not going to overlook trade imbalance for the bigger goals of countering China together or building long-term relations. For him, short-term deliverables matter. But the India-US relationship is so institutional that it would continue to grow anyway. How it grows depends on the extent of strategic convergence that Trump finds with India.”

Even as the rapport between Trump and Prime Minister Narendra Modi has been hailed lately, there is no guarantee that India would be able to extract concessions, says Saxena of Takshashila Institution.

“Neither is there a guarantee that people-to-people ties will flourish, given Trump’s hard rhetoric on immigration and on granting H1B visas to non-immigrants for working with US firms,” says Saxena.

Despite the rhetoric around the bonhomie between Modi and Trump, the India-US ties are headed towards uncertain times under Trump, who can call India a “big abuser” of free trade and Modi “fantastic” in the same breath.

The India-US relationship is set to grow, owing the institutional strength and bipartisan consensus but whether it grows within the framework of Modi’s ‘sab ka saath, sab ka vikas’ (with support of everyone, development of everyone) where both sides prosper or within Trump’s extractive ‘America First’ framework where he extracts maximally from India under his signature transactionalism remains to be seen.