Rick Waters is the managing director of Eurasia Group’s China practice. He previously served as the U.S. State Department’s inaugural director of the Office of China Coordination (China House) and as Deputy Assistant Secretary of State for China, Taiwan, and Mongolia in the Biden administration. In a recent interview with James Chau of China-US Focus in Tokyo, Rick Waters addresses potential risks and possible cooperation between the U.S. and China.

America’s China policy, characterized by major-power competition, has had a subtle yet significant influence on the Taiwan question. The next U.S. administration, whether led by Kamala Harris or Donald Trump, is likely make changes. The devil will be in the details.

The Trump White House is likely to ignite another round of inflation in new trade and tech wars. And that could drive U.S.-China ties to the edge.

In the run-up to the 2018 mid-term elections, then-President of the US Donald J Trump began to ratchet up the intensity of both his rhetoric and policies targeting China – more specifically, the US-China trade relationship. Castigating the trade deficit as one in which China was unfairly taking advantage of China, Trump fired his first shot in July, imposing tariffs on $34 billion worth of Chinese goods.

Former Taiwanese President Tsai Ing-wen’s call for the U.S. to prioritize aid to Ukraine over Taiwan drew scrutiny, especially given rising cross-Strait tensions. While Tsai’s stance may momentarily shift Trump’s administration's attention in East Asia, it risks undermining his likely focus on ending the costly Ukraine conflict and confronting China more aggressively, with Taiwan as a key flashpoint.

Domestic political turmoil in the United States is probable and will, in turn, likely constrain the incoming president’s foreign policy. It may ignite fierce infighting — so much that even many Republicans worry that the U.S. could return to isolationism.

BRICS countries, with a combined GDP approximately 1.5 times that of the United States, can be expected to retaliate against promised U.S. tariffs. These countries — many of which are major traders with China — are likely to make Donald Trump regret his bellicose bullying.

The unity of the Gulf states, their diversified partnerships and their degree of assertiveness — along with China’s deepened relationships in the region — may constrain U.S. dominance. Even so, China must devise policies to navigate the unexpected strategic challenges it might encounter.

While President-elect Donald Trump’s tariff threats are likely to dominate headlines in the near term, China’s industrial overcapacity remains a larger, core challenge for the global economy and trading system in the coming years. With recently implemented tariffs by advanced and emerging economies, and Chinese responses and macro stimulus, how this issue may evolve over the next few years is becoming clearer – with significant geopolitical implications.