Trump's China Failure: Trade Rerouted, AI Gap Closes — SkimNews
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- Trump's 2025 National Security Strategy did not identify China as America's paramount geopolitical competitor, instead framing the challenge primarily in economic terms even as other parts of the administration continued to view Beijing as a military and security threat.
- The Peterson Institute found the trade war simply rerouted Chinese exports through Vietnam, Taiwan, and Mexico rather than reducing the U.S. trade deficit, with tariff volatility imposing net costs on American manufacturers and consumers.
- At the October 2025 Busan APEC meeting, Trump abandoned a threatened additional 100% tariff on Chinese imports in exchange for a fragile truce on rare earths, soybeans, fentanyl, and export controls — a concession the rest of the world read as a limit on U.S. economic leverage.
- China's large language models now rival and in some functions exceed U.S. models at a fraction of the cost, and combined with manufacturing strength and lead in industrial robot deployment, give Beijing significant advantages in spreading AI at home and abroad.
- The administration failed to sustain Biden-era semiconductor export controls and moved too slowly against predictable workarounds, allowing Chinese firms to train models on banned chips obtained directly or through third countries.
- The USS George Washington was redeployed from Japan to the Middle East for the Iran war, leaving the Western Pacific without a U.S. carrier and weakening deterrence against Beijing.
- While Washington dismantles support for wind power, EVs, and clean energy, China is consolidating worldwide dominance in batteries, solar, and EVs and is on track to produce nearly twice as many STEM Ph.D.s annually as the United States.
Why it matters: The administration claims 'America First Trade Policy is working,' but exports have merely been rerouted while China closed ground on AI and clean energy. Allies watched Trump abandon the 100% tariff threat at Busan and registered the limits of U.S. economic leverage over Beijing — a perception that compounds as China consolidates dominance in batteries, solar, and EVs.
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