From trade to security – US China policy has become geopolitics

The United State's economic relationship with China has entered a new and more uncertain phase. At the same time, rivalry between the two great powers has become a structural feature of US foreign and security policy. This applies regardless of who occupies the White House, according to a new study from the Swedish Defence University.

Since 2018, relations between the United States and China have undergone a fundamental transformation. What previously centred mainly on economic competition has developed into a clear geopolitical rivalry.

In a new study, researchers at the Swedish Defence University analyse how US measures against China have gradually been justified in new ways, moving from trade policy, via human rights, to national security.

“The rivalry with China is here to stay. The question is not whether the United States should act, but how far-reaching those measures will be. Going forward, this will have major consequences for global trade, technological development and for US allies”, says Kjell Engelbrekt, Professor of Political Science at the Swedish Defence University.

Two administrations – different tools, same direction

The study covers the period 2018–2023 and points to greater continuity in US China policy than political rhetoric often suggests. At the same time, the researchers identify clear differences between the Trump and Biden administrations, both in terms of working methods and the instruments employed.

During Donald Trump’s first presidential term, the focus lay on broad, often confrontational economic measures. The United States introduced tariffs and trade restrictions on a large scale, justified by unfair trading practices, a growing trade deficit and allegations of intellectual property theft. The policy was clearly aimed at exerting economic pressure and signalling resolve, often without regard for multilateral institutions or the interests of allies.

When Joe Biden took office, the conflict had already escalated. The tone changed, but there was no return to previous trade relations. Trump’s tariffs remained in place, while new measures were introduced. The main difference lay in the Biden administration’s decision to target specific sectors and to justify policy to a much greater extent on the basis of national security.

“Trump used trade policy as a blunt instrument. Biden has instead refined the tools and directed them at strategically sensitive technologies”, says Kjell Engelbrekt.

Trade becomes a security issue

The study shows how US trade policy towards China has gradually acquired an increasingly explicit security dimension. Whereas Trump’s early measures were primarily based on trade policy arguments, the Biden administration has increasingly justified restrictions on national security grounds. Export controls and investment restrictions have been directed at advanced technologies such as semiconductors, artificial intelligence and quantum technology.

The Biden administration introduced the concept of de-risking – reducing risks in trade, investment and supply chains without completely severing economic ties with China. The aim was to reduce vulnerabilities in strategic sectors, while other trade could, in theory, continue. The study notes, however, that the effects of this policy may prove at least as far-reaching as Trump’s earlier tariffs.

“In practice, targeted security measures can have wide-ranging consequences for global value chains, well beyond the defence sector”, says Kjell Engelbrekt.

Risk of a more fragmented global economy

A central conclusion of the study is that uncertainty for other countries has not necessarily diminished under the Biden administration. On the contrary, US allies have found themselves in an increasingly complex dilemma. They are expected to adapt to American security requirements by relocating production and supply chains to political allies, while in many cases remaining heavily economically dependent on China.

This development risks accelerating the fragmentation of the global economy. Trade and investment may increasingly be organised within political and security blocs. This could have negative effects on global growth, access to critical raw materials and the green transition.

“The choice is between defending a more open, multilateral trading system or contributing to a more divided global economy. It is a crossroads with far-reaching consequences”, says Kjell Engelbrekt.

A strategic shift in US policy

The researchers argue that responsibility for the economic confrontation between the United States and China cannot be attributed to a single president or administration. Instead, the development should be understood as a broader strategic shift in US policy, partly driven by changes in the global balance of power.

At the same time, the study warns that an uncontrolled escalation risks damaging both the US economy and the global trading system. What will be decisive going forward is therefore how the United States chooses to use its economic instruments of power.

“It is a question of whether future US administrations choose to reinforce or to ease the tensions that now characterise the global economy. That choice affects not only relations with China, but the entire international system”, says Kjell Engelbrekt.