The Middle Kingdom was the focus of Donald Trump’s attention upon his arrival at the White House, with threats of brutal sanctions. This is no longer the case. By extending the deadline for reaching a trade agreement and, above all, by authorizing the sale of H20 semiconductors and then Nvidia’s Blackwell, a strategic US AI asset, to China, the White House is changing tack, adopting a much less belligerent approach.

Other signals point in this direction. After raising tariffs to 145%, the White House reversed course on May 12 under pressure from companies that, dependent on imported products from China, were subject to excessive costs. The tariffs are now 30%. Another interesting aspect is the absence of sanctions, even though China is the largest buyer of Russian oil. India did not benefit from such leniency, as its tariffs rose to 50%.

Let’s take a look back at the relationship between the two countries since Trump’s first term. The work of MIT’s David Autor and his co-authors sheds light on the shift observed in Washington.

In 2016, D. Autor published an article on the China shock. He indicated that the consequence of China’s development was a lasting decline in industrial employment in the USA and a precarious situation in many regions. This theme was a major one in the 2016 campaign.

Subsequently, Chinese competition in telecoms prompted Trump to ban ZTE and Huawei from the US market. Sanctions against China were intensified by the Biden administration to limit technology transfers. It was in this context that the campaign for the last US presidential elections was conducted with the idea of repatriating production to the United States.

Since January 20, there have been two major milestones. Before and after May 12. From enemy, China seems to be moving into the status of obligatory partner. US companies have been exerting pressure, because the development of the United States is conditioned by what happens in China, not just by products, but especially by innovations that are now occurring more in China than in the US.

Another article by David Autor in the NY Times on July 14 sheds light on the subject. He states that out of 64 critical technologies, the US was the leader in 60 of them in 2003-2007 and China in only 3. In 2019-2023, China is the leader in 57 of them and the US in only 7.

The new industry is no longer the same as before, but one conditioned by China’s advance. The dilemma is thus reversed.

The history of relations between China and the United States will not be a long, quiet river, but it has changed course. This is not necessarily reassuring for the rest of the world, and for Europe in particular, which might see it as a form of division of the world.