Trump’s second-term foreign policy asserts U.S. hegemony in the Western Hemisphere while exploring a great power system based on spheres of influence. Its success hinges on defining these spheres—especially between the U.S. and China—without destabilizing East Asia.

Trump’s foreign policy moves have been polarizing to say the least - but with competing voices within his own cabinet involved, the strongman approach may not be the ultimate outcome of the early administration’s moves.

Trump’s return creates uncertainty for Beijing, with potential economic risks from renewed tariffs and trade restrictions. While there are some prospects for relations to get better, the unpredictable nature of Trump’s policies and Washington’s internal challenges could also lead to further volatility between the U.S. and China.

Simon Lacey, Head of Digital Trade and Geopolitics at the World Economic Forum, in a recent interview with Marc Smrikarov of China-US Focus, discusses areas where U.S. and Chinese interests align, such as global financial stability and freedom of navigation. Additionally, he emphasizes the need for patience and understanding on both sides, and to recognize the importance of cooperation in a shifting multipolar world. He also highlights the fragmentation of AI development between the U.S. and China, warning that the lack of cross-collaboration could hinder innovation, and urges a more rational approach to labeling AI and semiconductors as dual-use technologies in national security contexts.

Given the deadly and complex nature of the U.S. fentanyl crisis, overcoming challenges and making the best of cooperation have become daunting tasks. The United States needs to act to stem domestic demand instead of accusing China of complicity.

Washington and Beijing display stark contrasts in their approaches to the world and to each other. The dividing lines highlight the extremes — perpetrators and victims, oppressors and the oppressed, aggressors and defenders.

China and the U.S. should not entangle themselves in trade imbalances and tariffs but find a new, innovative perspective. The future will be shaped by AI, big data, quantum computing and telecom. Both countries have tremendous common interests.

The country is far more resilient today than it was four years ago and in a good position to counter Donald Trump’s promised tariffs — or unexpected moves yet to come. It has diversified markets for Chinese goods, reduced the chances that countries in the region will form anti-China alliances and is welcoming foreign investment.

Despite heightened tensions between China and the U.S., sub-national diplomacy remains a critical channel for fostering collaboration. However, rising security concerns in the U.S. and differing priorities in China pose challenges, underscoring the need for transparency, trust, and a focus on mutual interests to sustain these efforts.

One of Jimmy Carter’s biggest feats in the Oval Office was the establishment of relations between the U.S. and China, opening a door for a relationship that is one of the world’s most dynamic factors today. Though the current state of affairs is far from a best-case scenario, it’s worth looking back at the hopes Carter and his counterparts had when their momentous deal unfolded.