Trump’s Big Deal With China?

Donald Trump’s return to the White House is expected to lead to more conflict between the US and China. Yet, could his love of a trade deal pave the way for a surprise deal with Xi Jinping? Call it soy on steroids.

If history is any guide, many are bracing themselves for an escalation in US-China relations after Trump’s second term in office. After all, his first term in office was seen as a turning point in relations with China, and his cabinet is expected to include prominent China hawks in Washington.

On top of that, the Biden administration’s extensive export controls and a web of cooperation echoing Cold War containment strategies, and relations between the US and China are at an all-time low. Famous investor. Ray Dalio summed up the sentiment.“America First” foreign policy and preparations for foreign war with China, he understood as America’s greatest threat.

However, despite the possibility of a further deterioration in relations, conventional wisdom overlooks a competing, perhaps even more important, factor: the US-China grand bargain, Trump’s desire to be remembered as America’s greatest statesman. In fact, Trump has it. It is reported that he made a call Before the inauguration, he discussed “balancing trade, fentanyl, TikTok and many other issues.”

Trump, driven by a transactional mindset, sees diplomacy as a series of high-stakes deals. His 2018 tariffs were less about strategic economic strategy and more about profiteering — in the end Securing a $200 billion trade deal Focused on agricultural products such as soybeans.

However, Trump prizes popularity above all else, and a winning strategy for him could include imposing punitive tariffs on Chinese imports and even Chinese companies operating in neighboring countries such as Mexico. This creates a pressure cooker, paving the way for negotiations with Beijing before American consumers feel the impact.

What about the result? A grand bargain in which China will make tangible and symbolic concessions that will win Trump the respect of his base and bolster his own image as a master dealmaker. Call it “soy on steroids.”

However, such an agreement does not come without risks. While the Trump-Xi deal may bring short-term economic relief, it could also alienate America’s allies in Asia. Trump’s admiration for strong leaders like Xi Jinping “Bright, fierce and smart” It contrasts sharply with the disdain for democratic leaders in Japan, South Korea and Taiwan. He claimed that he wanted protection without paying their fair share. A purely transactional approach undermines long-term strategic objectives and risks strengthening Beijing’s regional ambitions.

Still, Trump’s unpredictability and penchant for post-drama make a renaissance in U.S.-China relations plausible. As the world watches, one thing is clear: Trump’s return offers incredible promise. “Soy on Steroids” could be the opening act in an unexpected geopolitical shakeup that few could have imagined.

David Bach is President of IMD, having served since September 2024, and Nestlé Professor of Strategy and Political Economy. In the year Before joining IMD in 2020, he was Vice Dean at the Yale School of Management.