Trump and U.S.-China Relations: An Unreadable Forecast w/ Robert Manning
In the current transition between two eras of the international system, forecasting the future of tariffs, Taiwan, and security proves a difficult task.
On April 21, Robert Manning authored the piece “Trump is Losing Asia,” a response to a piece written 13 years earlier titled “A Tale of Two Asias.” The Monitor sat down with Manning to discuss how things have changed in 13 years and try to make sense of the current whirlwind of tariff threats. While it seemed like a devastating trade war was imminent, the current pause on tariffs feels like a slam on the brakes. What does the future hold? Manning shares his insights into how the second Trump administration might impact trade relations, Taiwan, American alliances in Asia, and security. However, he cautions, “We’re in a historic transition period between two eras; it's very hard to forecast.”
Robert A. Manning is a distinguished fellow with the Strategic Foresight Hub and the China Program at the Stimson Center where he mostly works on China, emerging technologies, and great power competition. Prior to joining Stimson, Manning served as a senior fellow with the Scowcroft Center for Strategy and Security at the Atlantic Council; as Acting Deputy National Intelligence Officer for Economics at the National Intelligence Council (NIC); as Senior Strategist within the Office of the Director of National Intelligence (ODNI) at the National Counterproliferation Center; and as Director of long-range Energy and Regional/Global Affairs at the NIC’s Strategic Futures Group. From 2005 to 2008, Manning was a member of the Policy Planning Staff for the U.S. Secretary of State, and from 2001 to 2005, he was senior counsellor for Energy, Technology, and Science Policy at the Department of State. From 1997 to 2001, he was Director of Asian Studies and a senior fellow at the Council on Foreign Relations (CFR), where he led several CFR task forces, including on Korea and Southeast Asia.
Miranda Wilson: 13 years ago, you wrote a piece with Evan Feigenbaum titled: “A Tale of Two Asias: In the battle for Asia’s soul, which side will win -- security or economics?” How have things changed (or stayed the same) since you wrote that piece?
Robert Manning: I think all of the trends have gotten more intense, and one of the issues for the United States is that, because Asia tends to be growing faster than the United States, there's a relative decline of the U.S. economic role in Asia, though it continues to grow in absolute terms. Over the last 10, 15 years, that trend has intensified. It has become more complex because of the growth of industrial policy and geopolitics dominating economic decisions. Now we have taken it to a whole new level with the Trump tariffs.
On the other hand, I think what we've seen from the administration with regard to defense policy is mostly continuity. There's bureaucratic inertia to the military relationships, the alliances and partnerships. There’s the increased role of the United States in the Philippines, Guam, and other areas where there's a larger U.S. and more sophisticated weapons presence. Even as these countries become more integrated with China, economically, all the polls in Asia show that they are more nervous and uncomfortable with China, with its coercive activities, and in the South China Sea, East China Sea, and so on.
We've had tremendous growth over the last 10 or 15 years in Asian security cooperation, whether it's Japan, Philippines, Australia, India, Vietnam -- some of it is with the United States, and some of it is not. That's part of the hedging that's going on in the region. They're nervous about both powers: the United States and China. China, because it's getting bigger and more influential; the United States, because they're less certain about its reliability. In the case of Trump, it's not just the tariffs, it's also the discarding of traditional American values like promoting democracy.
There was a statement from Singapore's defense minister saying the United States “has gone from liberator to a rent-seeking predator.” That's an incredible statement that gives you a sense of the shift in Asian perceptions of the United States, even though they all know they need the U.S. security presence desperately to counterbalance China.
In terms of economics, what we're seeing is that the region has moved on. You've got two major trade agreements: the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). The United States is not part of either one. U.S. market access is becoming more challenging and will continue to be going forward if these trends continue. .
And you also have growing trade arrangements both in the region and inter-regionally. The UK just signed an agreement with India. The EU is negotiating with CPTPP to align trade and India and so on. So you have, even as the United States retreats from globalization, the rest of the region is doubling down on what I would call the new geometry of trade -- new patterns of trade going forward. All the trends we worried about 13 years ago are being forwarded in a more tense and complicated way.
MW: In 2025, do you have any insights into the answer to the subtitle’s question? Which side is winning – security or economics?
RM: I think it's being tested. If you look at the Trump tariffs, they have threatened to undo the entire Asian operating system.They have complex supply chains and production networks across the region, including China, Southeast Asia, Japan, and South Korea. In his first term, Trump targeted China with tariffs. This led to a reshoring of investment in ASEAN states, India, and other places. Now, the intent seems to be to press these economies using Chinese components and assembling and transshipping to cut ties to China. The whole system is being threatened by these tariffs. You can't undo supply chains that have grown over 40 years of globalization and economic decision-making by companies overnight. You're not going to see an America-only supply chain to replace it.
What are these countries going to do if there's a trade confrontation? Even our closer allies, Japan and Korea, are facing 25% tariffs on auto steel and aluminum. So far in the trade talks, the Trump administration has told them this stuff is off the table. If Korea and Japan are stuck with 25% tariffs on auto steel, it's going to cripple their economies. We don't know what's going to happen because the negotiations are ongoing, but the trend line seems to be that Trump really likes tariffs, and it doesn't seem to matter what the reality of trade is.
For example, the United States has free trade agreements with Singapore and Australia, and with both of those countries, we have a trade surplus. They're probably wondering, “Why do I have 10% tariffs?” It’s just the United States asserting the power of its economy, the power of the dollar, and it's creating resentment.
At the same time, China's overcapacity in manufacturing is also resented by many countries in Asia and the Global South. Countries like Indonesia have hit China with dumping charges and WTO complaints. The region is sort of caught between the two competing great major powers, each with its own flaws.
MW: In your most recent Foreign Policy piece, you argue that even though Trump’s security policy towards China remains constant, including reassurance to allies through a trip to Asia by Secretary of Defense Pete Hegseth, the financial policies could upset policy coherence. How will the U.S.’s new economic policies and tariffs change security perceptions by both China and America’s allies?
RM: The tariff demands are pushing them towards making a choice that they all want to avoid, which is: who do you choose, the United States or China? Most in the region have been hedging against both US and Chinese pressures. For a lot of these countries, thinking about it in historic terms, the United States may come or go, but China is forever. They have to survive in the region, and China is the dynamic economy, the largest trade partner of almost all states in the region.
At the same time, there's a certain amount of economic coercion from China. So, they don't have a good choice. They're torn, and it's very hard to know how things will play out. Right now, Asian currencies have been weakening against the US at the same time as unprecedented trade uncertainty mounts... It’s a very delicate time economically, and they are trying to placate Trump, and it's not clear how these countries are going to respond.
The United States is not offering to replace China in terms of manufacturing investment or markets. The Trump White House doesn't want American companies investing in these countries. Trump recently criticized the CEO of Apple for moving production from China to India. It's not clear what we're offering them during these trade talks because it's not market access, and it's not American investment. So I think these countries are torn. They want the American security guarantee; they don't have an alternative. They're nervous about China, but economically, the whole region has become more and more integrated in terms of trade and investment. They are facing a horrible dilemma. I don't know how it’s going to play out.
MW: What are the consequences (either positive or negative) of China’s increased role as a trading partner in the Asia Pacific as America’s role as a trading partner shrinks?
RM: In the region, I think there's a sense of inevitability about it. China has its own very serious problems -- not just demographics -- the property crisis, a state-driven economic model that is no longer viable, and they still haven't figured out how to get past enormous debt.
China exported $439 billion worth of goods to the United States in 2024. As that market shrinks, they can't dump it all in the Global South and in Europe. China is basically saying they get to run a permanent surplus, and the United States has to run a permanent deficit. That's just not a sustainable arrangement. That's not what the Bretton Woods institutions were designed to do.
There needs to be more balance in the economic relationships, but that can't happen until China addresses the kind of reforms they need to make to boost consumption, so they don't have to export all those goods. That doesn't happen overnight. They're moving slowly in that direction, but even if they made a concerted effort to put the resources behind it, it would take a number of years.
MW: As you note in your article, Trump has complained about defense spending for allies like Japan and South Korea. Do you think he is likely to act on such complaints?
RM: From what we've seen in talks with Korea and Japan, in Trump's view, everybody's ripping the United States off -- they're free riding, and they should spend more on defense. Now, Japan covers 75% of the cost of U.S. troops there, other than salary, already. Both Japan and South Korea have increasingly taken on more of the burden.
Korea has something that's an administration priority, which is shipbuilding; that's become a huge US defense priority. That may be part of a trade deal. They have been in a political crisis, and have a new government after June 3, and like Japan, 25% auto tariffs would hurt an already weak economy. We just don't know yet.
Japan is facing elections coming up, and they can't accept the 25% auto tariff. They’re not in a rush to make a deal. Their commitment is almost double, closer to 2% of defense, which is a big deal given their history, and I think the Trump administration wants a lot more.
In the case of Taiwan, they're talking about 10% of defense spending. Taiwan has a divided government – it has trouble even passing a budget. We're looking at some very problematic situations.
MW: In your opinion, are Trump’s unpredictable policies likely to catalyze any sort of change in the fragile status quo between Taiwan and China?
RM: It's larger than the White House, but I also think Trump's made a lot of comments that have unnerved Taiwan. He seems to see Taiwan as a bargaining chip, not a beacon of democracy. For example, he’s said many times that they “stole our chips.” What he's referring to is the American tech companies whose value-added came from designing and intellectual property chose to manufacture those chips in Taiwan. If you want to blame somebody, blame American semiconductor companies. He's used that as a reason to resent Taiwan.
Recently, he made an off-the-cuff remark in the context of trade talks with China, and said something about how it would advance unification. That made Taiwan very, very nervous. Taiwan really doesn’t know what to expect from Trump, and they sense a kind of hostility. That complicates things. I guess you could argue it contributes to strategic ambiguity, if anything.
MW: Do you think Trump will maintain strategic ambiguity towards Taiwan?
RM: That's a tricky question because it's worked very well for a long time, almost 50 years. But things have changed. China has changed the status quo with the continuing coercive military presence and activities around Taiwan. That's led a lot of people in the United States to say we can't have any more ambiguity. We have to have strategic clarity. But the point of strategic ambiguity was very clearly because the United States opposed any unilateral change, whether it was from Taiwan or from China. The DPP government is more favorably looking at independence. The American, particularly the Congressional, support for Taiwan has reinforced those trends. Tensions have grown quite significantly. However, I still think that the position of strategic ambiguity gives us more leverage with both sides than we might otherwise have.
MW: The United States and China reached a deal to pause tariffs for 90 days. What do you think will happen after these 90 days? Would such dramatic tariffs (over 100%) ever occur in reality? Was it all just a bluff from the Trump administration?
RM: Both sides put up 125%. I think that what we had with 125% tariffs was, in effect, a trade embargo. It just doesn't work. That was not sustainable. When the dust settles, I don't think there will be a grand bargain, but there will be a deal. At the beginning, Trump exempted all the electronics because we're so dependent on China for phones, computers, etc. For example, China controls 90% of the market for the rare earth metals needed for all electronic goods. They have a lot of leverage, and the things that thing that we sell to China -- soybeans, corn, beef -- they can get from other places.
I think the main thing China wants is predictability. They're willing to pay a price if they can get that. I'm not sure that's going to happen, but I think there'll be some small-scale deal. There will be decoupling in a number of key sectors, particularly technology and manufacturing. Trade will continue to diminish; it's diminished over the last two years by about a hundred billion, but it's still very large. Something like $550 billion a year will shrink.
A lot of it depends. For example, fentanyl is a very powerful political issue and a big concern for President Trump. The Communist Party has the ability to do something very serious -- to ban precursors from being sold to Mexico, where most of the fentanyl comes from. If they took dramatic steps to do that, that might ease tariffs quite a bit.
But right now, even with all the pauses, the estimate I saw said the average tariffs with China are 39%. That's still quite an order of magnitude higher than they have been in the past and will have a big impact on trade. However, I think it'll settle at a lower level. I don't know what the number will be, but I think what they went into this trade war with was mutually assured economic destruction. Both sides are going to have to walk that back and figure things out. The United States is trying to dismantle the interdependence that grew over 40 years. You can't do that overnight. It has to be a slower process.
MW: Is economic decoupling possible?
RM: I don't think it will be 100% decoupling. I think China and the Global South have already tried to immunize themselves against US tariffs and sanctions. That process will continue. The United States now only represents about 15-18% of their trade, and there's a conscious effort to expand outside the U.S. orbit on trade. The United States is doing the same thing.
Although, the protectionism in these tariffs is really hurting U.S. industry—some 40% of U.S. imports are intermediate inputs, so tariffs are hurting manufacturing The auto industry is going to be very hurt by these tariffs because, particularly, even with Mexico and Canada, it's a deeply integrated North American production process. If that blows up, we can't make an American car that's 100% American parts. Ending the IRA that incentivizes EVs, batteries, and solar will hurt the US and increase Chinese dominance. I don't know how that's going to play out, but what you're going to see is a partial decoupling over the next four or five years that will continue.
MW: What are the long-term consequences of Asia losing trust in the United States? Do you think that after Trump, the United States could recover the lost trust? Or is the damage permanent?
RM: It's very hard to recover trust when you lose it.
It would take some time. Although, if you look at it in historic terms, after Vietnam, everybody said the United States would be out of Asia. A few short years later, by the Reagan era, we were completely dominant again in the region. I don't think you can rule anything out, but it's going to be a very difficult process. As long as China continues these patterns of coercive behavior, there's going to be an interest in sustaining security relationships -- the United States has played the security guarantor role for the last 50, 60 years.
There’s already a huge debate in Korea about getting nuclear weapons, and they seem to want what they call latency, which is the ability to do it without actually having a bomb. Japan has been a latent nuclear power for many years because of its plutonium reprocessing; they have a big civil nuclear power program with reprocessing. That causes tension, not just because of China but also North Korea and the incredible buildup of missiles and nuclear weapons over the past four or five years. For those reasons, the United States becomes more important.
MW: What would America have to do to restore such trust? Would it involve playing a larger role as a security guarantor?
RM: I think much depends on whether we can curb the downward spiral and find an equilibrium in U.S.-China relations. If Americans saw fewer economic benefits from playing this role, playing the policeman of Asia, and we would be paying for it, it might be questioned. That's sort of Trump's point, and I don't think that's a viable trend.
It wouldn't shock me if four or five years from now we started moving back towards a more internationalist economic policy, because with the way things are going, I am skeptical that it will end well. If we did that, updated and reformed the international economic system, that would help rebuild trust. We're in a period between an old system that's decomposing and no sign of what the successor is going to be. We’re in a historic transition period between two eras; it's very hard to forecast.
Miranda Wilson is a contributing editor for the U.S.-China Perception Monitor.
The views expressed in this article represent those of the author(s) and not those of The Carter Center.
Peace is always on the back foot. To promote peaceful cooperation between the United States and China, all content from the Monitor is provided here for free. If you would like to contribute to our work, please feel free to make a donation to The Carter Center. Please indicate your donation is for China Focus.
That’s all from Atlanta. Y’all be good.