In this review of the past month, we cover the relations between China and the U.S., Japan, and China.
Diplomacy
The World Enters a New Chapter in U.S.-China Trade Relations
By Senior Contributor Caden Hubbs
With a new administration settling into the White House, January saw a number of changes to the U.S.'s foreign policy strategy, including a slew of policies with the potential to fundamentally alter the course of U.S.-China relations.
Trump Sets His Pace: President Donald J. Trump has had a busy first month in office, signing 46 executive orders in the roughly week and a half since his January 20th inauguration. Signing 39 more orders than during January 2017 and 21 more than Biden during his first January, Trump has made it clear that he intends to waste little time bringing structural change to America. Chief among these changes is a far more proactive approach to managing the U.S.-China relations, implementing measures to address perceived imbalances. In the short time since entering office, Trump has already taken steps to reduce the U.S.’s $280 billion trade deficit with China. A 10% tariff on all goods imported from China went into effect on February 4th, increasing the price of over $400 billion worth of goods annually imported by Americans. While a decrease from a previously threatened 60% tariff rate, the rate is still significant, with the U.S.’s average tariff rate on imported products sitting at roughly 1.5% in 2022. The 10% tariff was justified as a punishment for the prevalence of Chinese-manufactured fentanyl in illicit substances entering the U.S. from Mexico, coming alongside similar threats to Mexico and Canada, which are both privy to preferential trade status as part of the North American Free Trade Agreement (NAFTA). In addition to tariffs, Trump’s actions included an amendment to the controversial “de minimis rule”, which previously allowed products under $800 in value to be exempt from customs duties—a fact long used by Chinese e-commerce platforms such as Shein and Temu to circumvent tariffs, but now excludes Chinese products from eligibility. Trump’s latest moves have drawn similarities to the 2019 trade war but could have far greater implications.
The Death of Free Trade: The U.S. has long struggled with the price of free trade, with its official trade stance undergoing many dramatic shifts, alternating between periods of free trade and deep isolationism. These fluctuations often follow a cycle of relatively lax trade barriers leading to reactionary pushback and more restrictive trade laws. The 1948 General Agreement on Tariffs and Trade (GATT) promised an end to this cycle, representing the beginning of a prolonged period of trade liberalization. It laid the groundwork for nearly three-quarters of a century of tariff reductions. From its signing in 1948 to the establishment of the World Trade Organization in 1994, the average global tariff rate fell from 22% to 5%, but this decline has since stalled with focus turning from global liberalization to establishing regional free trade zones—such as NAFTA. During this period of trade liberalization, China found itself largely excluded from the international system. Concerns over human rights abuses, government subsidies, and an insurmountable labor advantage stocked fears of opening trade with China. By mid-1980 China had fully moved on from its attempts to create the ideal socialist state. Under Deng Xiaoping, China implemented a series of reforms bringing China closer to the institutional standards of the West, hoping to establish trade relations and access lucrative Western markets. These efforts culminated with the United States Granting China permanent most favored nation status in 2000, greatly reducing tariffs to the levels of other U.S. trade partners, and China being granted membership to the World Trade Organization in 2001. While China had successfully gained access to the global market, many remained critical of the potential effects of large-scale trade. To assuage fears special conditions were put in place allowing Western countries to implement restrictive trade policies normally frowned upon by the WTO, such as tariffs, for 15 years to minimize the initial shock of opening trade. The move had its desired effect, both China and the U.S. benefited. Between 1999 and 2019 annual trade rose from $100 billion to $558 billion with U.S. exports to China growing by 450%, but for U.S. workers it was far from a perfect deal as between 2001 and 2018 nearly 3.7 million lost jobs were attributed to trade with China. The reduction in the cost of moving goods across borders incentivised businesses to move abroad resulting in manufacturing leaving the United States.
The Coming Storm: The cost of trading with China has become clear: 3.7 million jobs in 17 years, but at the same time trade with China has undoubtedly benefited the American consumer. Now we are left walking a tightrope: choosing to balance between lowering our reliance on China and continuing to benefit from cheap Chinese products during a particularly painful inflationary period. Trump’s moves will undoubtedly have an immediate effect on the latter. Trump’s most recent round of tariffs will raise prices on imported products, raising prices overnight. China has implemented a retaliatory tariff on a wide variety of U.S. products, harming domestic industries. In the long run, it is estimated that the effects of the tariffs will cause a 0.5% to 1.5% reduction in the annual growth of the economy and an equivalent loss of 344k jobs by 2035. Trump hopes to offset this by using tariffs, combined with promised industrial policy measures, to lure manufacturing back to the United States. In this capacity, tariffs reduce the price advantage of Chinese goods while making American manufacturers more competitive with their Chinese counterparts. Additionally, Trump aims to use tariffs as leverage in future negotiations with China. The threat of tariffs comes at a time when Beijing’s attention is focused inward, amid ongoing economic woes. This means that, unlike the 2018 trade war which ended with minimal gain, China has already been far more proactive in reaching a deal and avoiding the potential harm of tariffs, promising to increase its imports of American products. During these negotiations, Trump also hopes to address other perceived grievances in the American-Sino relationship including the aforementioned Chinese production of fentanyl and China’s ongoing practice of nearshoring where Chinese companies move production to countries such as Singapore and Mexico to circumvent tariffs and sanctions.
Diplomacy
China-Japan Relations Trudge on Through Dilemmas and Debates
By Senior Contributor Julian Sherrod
Since the beginning of this month, a wide range of confidence-building measures have been taken to ensure the continuity of amicable relations between Beijing and Tokyo, albeit with significant challenges ahead.
Continuous Challenges: Since 2020, China-Japan relations have been fraught with challenges. Some of the most important issues have related to the Senkaku Islands, Japanese revanchism, and continued Chinese belligerency. Starting with the Senkaku Islands, these small uninhabited rocks have been disputed for decades. While Japanese imperialism was denounced and their conquered territories returned to their rightful owners after World War II, these islands continue to be subject to debate, following evidence that they belonged to Japan before its imperialist era. During the tenure of former Prime Minister Shinzo Abe, the issue of the Senkaku Islands intensified through Abe’s foreign policy strategy of countering China and because of China’s increased belligerency in East Asia. This largely anti-China approach even continued under the following Prime Ministers, Yoshide Suga and Fumio Kishida. However, the anti-China block took a major blow after the election of Prime Minister Shigeru Ishiba of the Liberal Democratic Party (LDP), who has been dramatically more pro-China. Since his election, Ishiba has met with President Xi, sent his national security advisor to meet with the Chinese Foreign Minister, and had his own foreign minister meet his Chinese counterpart. In January, the tone in Beijing and Tokyo has been much the same since the election, albeit with new issues and dilemmas.
Mainstream Diplomacy: Japanese foreign policy has been dominated by two main groups within the LDP, the pro-China and anti-China groups. The former has promoted cooperation and collaboration with China and the latter has promoted competition and contestation. Ishiba is often considered pro-China due to his collaborative outlook towards the country and plans to equalize the U.S. alliance while also proposing the establishment of an “Asian NATO.” Although the term Asian NATO initially worried the Chinese, Ishiba backtracked on his idea during his first overseas trip to Vientiane, the capital of Laos. As a rival of Abe, it was also expected that he would be a more China-friendly candidate. Cooperation with China has improved substantially, especially in January, with the first People’s Liberation Army (PLA) visit to Japan in five years and Ishiba reiterating his wish to visit China, and a conclusion to the Shenzhen stabbing perpetrator’s fate. The meeting between the PLA and Japanese Self Defense Force officials helped solidify interpersonal connections between the services so that possible tension reduction measures could occur, such as cooperative military exercises. Ishiba’s willingness to visit China and the sense of justice given to the Shenzhen stabbing victim both help lower the hurdles for future cooperation between China and Japan. However, the relationship is not without its faults, with continued Chinese pressure on the Japanese government not to impose U.S.-backed semiconductor technology restrictions. Japan is heavily reliant on U.S. security guarantees, meaning the Japanese government is most likely hesitant to act against its security guarantor. Other longstanding issues have remained, with China openly stating its concern with the Japanese military buildup and the Senkaku Islands.
High Hills and Deep Valleys: With all these recent confidence-building measures between Japan and China, relations have visibly improved. The main challenge now will be to maintain and build on these interpersonal connections and prevent their dissolution. One way to bolster relations could be to institutionalize more conferences, visits, and meetings like the Japan-China-ROK Summit, better known as the Trilateral Summit. The Trilateral Summit shows the issue with institutionalizing these meetings and conferences, as no nation seems willing to allow the other to have their name behind the other when titling the summit at home, showing an underlying tension between China and Japan that will likely continue. At the same time, Japan could also be more inclusive regarding China in international circles by allowing China into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). China has officially applied for membership in the CPTPP, but one of the partnership’s goals is to counterbalance Chinese influence, meaning the further inclusion of China in trade deals is likely untenable. While there is optimism for China-Japan relations, there is still a wide range of issues that could easily lead to a breakdown in the relationship as well.
Diplomacy
Strained Stability: A Shift in China-India Relations
By Senior Contributor Surya Ambatipudi
After years of military turmoil along China and India’s shared Himalayan border, the two countries have been stitching the wounds of their relationship, advancing towards an era of cooperation. However, political and economic differences between the two, alongside a desire for regional domination, continue to put Asia’s largest powers at odds.
Asian Giants: China and India are often dubbed as Asia’s giants, jointly making up 35% of the world population. Separated by the mighty Himalayas, the two are vastly different, culturally and politically. Both countries boast thousands of years of rich history, having cultivated some of the world’s most significant scientific and technological advancements. Yet, the relationship between modern-day China and India has been strained by territorial disputes, military skirmishes, and competition for regional influence. The years leading up to 2025, however, have reflected a stalemate between the two, as the Red Dragon and Golden Bird seemingly make amends and push for peace and stability.
2020, A Brawl at the Border: Tensions between China and India peaked most recently in June 2020, as unarmed soldiers on both sides engaged in hand-to-hand combat, pushing each other down to the hard, icy ground and even off rocky ledges. The confrontation occurred in the Galwan River Valley, on the border between Chinese-administered Aksai Chin and Indian-administered Ladakh. Initial reports cited the deaths of 24 soldiers, though reinforcements ordered by the Indian Army escalated the situation, leading to more casualties. Critics and analysts suggested that the numbers reported by China were false, understating the damage done to the People’s Liberation Army in order to dissolve domestic concern.
The face-off was abrupt and unexpected but represented heightened tensions between Asia’s largest militaries. China claimed that the Indian soldiers had violated the “Line of Actual Control” (LAC) that separates Aksai Chin from Ladakh. They also criticized infrastructure and highway developments in the region, financed by the Indian government. India, meanwhile, accused China of continuous violations of the LAC in the past, especially in the Kashmir region. Many local leaders in Ladakh claimed that the skirmishes at the border were expected, and urged the Indian government to pay closer attention to these incursions. Overall, the clashes were met with resentful reactions from both the Chinese and Indian public, augmented by arguments and debates on social media. Fractured relations resulted in additional, scattered clashes taking place in disputed areas within Sikkim, Tibet, and Arunachal Pradesh in 2021 and 2022, subverting any hope for mutual peace.
Pacifying Hostilities, A Historic Border Deal: As tensions brimmed into 2024, both governments were met with domestic political and economic challenges that mandated the need for a peace agreement. China, most notably, was dealing with an economic slowdown that had led to multiple Chinese firms defaulting on debts and repayments, while India was managing unprecedented declines in FDI inflows since 2022. On October 21, China and India reached a deal requiring both militaries to adhere to the LAC, just as they had done before 2020. The deal was strategically signed just weeks before the October 22-24 BRICS Summit in Kazan, prompting a sigh of relief from the rest of the bloc. The Chinese Foreign Ministry had announced that “smooth progress” was being made, ushering in an era of thawed relations. As Asia and Africa’s most powerful individuals made their way to Kazan in late October, Chinese President Xi Jinping and Indian Prime Minister Narendra Modi announced that they would engage in talks to accelerate a normalization of ties. Both leaders praised each others’ ancient histories and influential standing within the Global South, with President Xi calling for strengthened communication. The two shook hands after committing to these responsibilities, symbolizing hope for future cooperation and stability.
Strategic Reconciliation: Despite periods of political bitterness and robust military competition between the two Asian giants, Xi’s China and Modi’s India share common interests, especially in business and trade. In 2023, amidst the backdrop of the conflict in Ladakh, bilateral trade reached a record $136.2 billion, with a significant rise in Indian exports to China. Somewhat hypocritically, however, India continues to strengthen its economic ties with Taiwan and defense cooperation with the United States, putting it in a conflicting position. It is clear that India values healthy ties with the United States and its allies to present itself as a regional power that is reliable in countering Chinese aggression. Moreover, criticism of Prime Minister Modi’s alleged illiberalism and disregard for the rights of religious minorities is prompting India to save face and attempt to convince the Western world that it is committed to democratic values. A thawing in relations between China and India does not necessarily mean that tensions will cease to exist. Diplomatic differences and territorial disputes continue to flourish, as neither country is willing to compromise on the Himalayan front. However, steady efforts at bringing both countries closer together have already begun to unveil themselves.
In January 2025, Indian Foreign Secretary Vikram Misri visited Beijing to discuss action items that would facilitate collaboration between China and India. The visit focused primarily on trade relations, cross-border intellectual exchanges, and joint environmental concerns. One of the most important discussions focused on Mount Kailash, a remote, snow-capped mountain on Chinese territory that holds religious significance for India’s Hindu population. Misri reported that the Chinese government was planning to restore access to Mount Kailash for devotees, which was met with pleasant reactions from the Indian public. Additionally, China and India agreed to resume direct flights, increasing connectivity for students, businesspeople, and leisure travelers. Many Chinese netizens, for example, expressed excitement about potentially attending this year’s Holi celebration in Northern India. Similarly, Indian students studying in Shanghai have begun looking forward to faster travel times, cheaper tickets, and fewer transfers. The diplomatic steps being taken by both countries are small but project a wider public exhaustion for war and a desire for peace.
The Race for Domination: The future of Asia, and arguably most of the developing world, will be affected by ties between China and India as the battle for regional dominance persists. Some critics argue that a thaw in relations is an excuse for both countries to focus on more important matters concerning their economic and military power and their relationship with other, more important countries. In China’s case, the re-election of President Donald Trump in the United States rationalizes the need to rethink and reshape foreign policy, as the threat of tariffs and sanctions becomes more prudent. Meanwhile, China and India have begun to clash beyond the military frontier, as international trade and investments have emerged as a competition medium.
China’s Belt-and-Road Initiative (BRI) in Africa is a prime example of its desire to assert dominance on the continent, primarily through designing and investing in large-scale infrastructure projects. In recent years, the Chinese Development Bank has been pouring billions of dollars into African infrastructure development, administering large loans to countries such as Ethiopia and Kenya. India, though far less influential, is not absent from the African theater. India’s foreign policy is consistent with the goal of establishing a foothold in the continent, as they have funded agriculture, telemedicine, and e-commerce initiatives, all under the pretext of shared colonial experiences.
Competition on the technological front has also been skyrocketing, most notably within the realm of artificial intelligence. On January 20th, 2025, a Chinese startup called “Deepseek” launched a language-learning model (LLM) that rivals OpenAI’s ChatGPT in the United States. Scrambling to join the rapidly evolving AI race, India announced plans for its own LLM, set to launch in late 2025. With the assistance of government subsidies and large domestic corporations such as Jio and Tata, the development of the model has already begun.
The shaky, unstable relationship between China and India must remain closely monitored in the coming years. It is safe to assume, however, that conflict and competition between the two are beginning to materialize beyond military confrontation. While crises at the border exist and will likely exist for years to come, a significant portion of the battle is being fought economically and intellectually. Though China dominates in infrastructure, international trade, and global influence, India’s rise should not be ignored. New Delhi has a long way to go in terms of crafting policy to transform India into a strong competitor and alternative to China, but steps are being taken in this direction. The newfound stability between the two may not be permanent, and it remains to be seen whether Asia’s most powerful actors will prioritize détente.
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