Donald Trump’s electoral victory and his return to the presidency of the United States have given rise to speculation about the contours of his administration’s policy towards the Indo-Pacific region.

US presidents are said to be more ambitious in their second terms, and if past is only prologue, Trump 2.0 could have a profound impact on US China policy. Indeed, during his first term, Trump altered Washington’s fundamental engagement with Beijing. Since the normalization of relations between the two countries in the late 1970s, cooperation in economic, scientific and cultural fields has flourished. Trump spoke of decoupling, that is to say the gradual breaking of the intertwining between the two.

He also sought to address commercial, geopolitical and security challenges. The US-China trade war has intensified following the Trump administration’s imposition of tariffs on Chinese imports to reduce the trade deficit. Under the terms of the trade deal signed by China, it agreed to increase its purchases of American products, resolve intellectual property issues and give American financial institutions greater market access. The Trump administration has called Xi Jinping’s China a strategic rival. Thus, national security concerns have become paramount and have led to restrictions on Chinese investments in sensitive sectors, restrictions on major Chinese companies like Huawei and ZTE, and a desire to counter Chinese influence in telecommunications networks, mobile phone application ecosystems and cloud computing.

The Biden administration has built on this foundation, limiting flows of sensitive technology, investment, and human capital to China. He is also seeking to rally allies around restrictions on semiconductors. While Xi’s China placed great importance on technologies such as electric vehicles, the United States retaliated by imposing tariffs on them. So the policy agenda of both Republican and Democratic administrations has been to intensify measures that China sees as aimed at containing it.

During his election campaign, Trump sought to restore American primacy in manufacturing and focused on Xi’s China Manufacturing initiative, which aims to establish dominance in important sectors such as technology. advanced information, high-end numerically controlled machines, robotics, aeronautical equipment, marine engineering technology, sophisticated railway equipment, energy-efficient vehicles, electrical equipment, agricultural machinery, biopharmaceuticals and high-performance medical devices. He called for higher tariffs on Chinese products. Trump’s perception of China is also colored by his view that Xi’s mishandling of Covid-19 led to his rout in the 2020 election. This antipathy can translate into a tumultuous relationship.

For China, Trump’s return has fueled concerns about its political and economic trajectories. Xi has expressed fears about attempts to dislodge the Communist Party through regime change; this resonated even with the general public. Economists believe it may fall short of its gross domestic product (GDP) growth target of around 5%. The economic crisis and deteriorating relations between the United States and China have tarnished Beijing’s appeal as an attractive investment destination for American companies. European companies operating in China have expressed concerns that declining returns on invested capital do not justify the risks associated with their operations in the Chinese market. They believe that China’s market problems will remain unresolved and that they will have to rethink their investment in China due to regulatory issues, priority given to SOEs in public procurement, market access barriers and overcapacity. This situation is also worsened by the withdrawal of American technology companies from China amid geopolitical tensions.

India should try to leverage churn to its advantage. Prime Minister Narendra Modi was one of the first leaders to approach Trump after his victory. Modi has sought to build on relationships developed under the first Trump presidency. The question is, can India use the West’s disenchantment with China to attract more investment? Under the first Trump presidency, military cooperation flourished, as evidenced by the signing of the founding agreements. While India and China have taken steps to resolve the military standoff along the Line of Actual Control (LAC), Delhi needs to improve its defense industrial complex to strengthen its deterrence potential. One of the defining features of Trump’s first term was the emergence of minilaterals in the Indo-Pacific region. Under Trump, Quad was resurrected in 2017. As Pakistan collapses and terrorism resurfaces in Kashmir, India must engage with Trump who has been receptive to Indian concerns from his early innings. There can be much closer cooperation between Washington and New Delhi in India’s neighborhood, where differences have slowly emerged in recent years.

Harsh V Pant is Vice President of Studies and Kalpit Mankikar is a Fellow of Chinese Studies at ORF. The opinions expressed are personal.