Trump Doesn't Realize China Is Pulling Ahead of the U.S.
For years, theorists have posited the onset of a 'Chinese century': a world in which China finally harnesses its vast economic and technological potential to surpass the United States and reorient global power around a pole that runs through Beijing.
That century may already have dawned, and when historians look back they may very well pinpoint the early months of President Trump's second term as the watershed moment when China pulled away and left the United States behind.
It doesn't matter that Washington and Beijing have reached an inconclusive and temporary truce in Mr. Trump's trade war. The U.S. president immediately claimed it as a win, but that only underlines the fundamental problem for the Trump administration and America: a shortsighted focus on inconsequential skirmishes as the larger war with China is being decisively lost.
Mr. Trump is taking a wrecking ball to the pillars of American power and innovation. His tariffs are endangering U.S. companies' access to global markets and supply chains. He is slashing public research funding and gutting our universities, pushing talented researchers to consider leaving for other countries. He wants to roll back programs for technologies like clean energy and semiconductor manufacturing and is wiping out American soft power in large swaths of the globe.
China's trajectory couldn't be more different.
It already leads global production in multiple industries — steel, aluminum, shipbuilding, batteries, solar power, electric vehicles, wind turbines, drones, 5G equipment, consumer electronics, active pharmaceutical ingredients and bullet trains. It is projected to account for 45 percent — nearly half — of global manufacturing by 2030. Beijing is also laser-focused on winning the future: In March it announced a $138 billion national venture capital fund that will make long-term investments in cutting-edge technologies such as quantum computing and robotics, and increased its budget for public research and development.
The results of China's approach have been stunning.
When the Chinese start-up DeepSeek launched its artificial intelligence chatbot in January, many Americans suddenly realized that China could compete in A.I. But there have been a series of Sputnik moments like that.
The Chinese electric carmaker BYD, which Mr. Trump's political ally Elon Musk once laughed off as a joke, overtook Tesla last year in global sales, is building new factories around the world and in March reached a market value greater than that of Ford, GM and Volkswagen combined. China is charging ahead in drug discoveries, especially cancer treatments, and installed more industrial robots in 2023 than the rest of the world combined. In semiconductors, the vital commodity of this century and a longtime weak point for China, it is building a self-reliant supply chain led by recent breakthroughs by Huawei. Critically, Chinese strength across these and other overlapping technologies is creating a virtuous cycle in which advances in multiple interlocking sectors reinforce and elevate one another.
Yet Mr. Trump remains fixated on tariffs. He doesn't even seem to grasp the scale of the threat posed by China. Before the two countries' announcement last Monday that they had agreed to slash trade tariffs, Mr. Trump dismissed concerns that his previous sky-high tariffs on Chinese goods would leave shelves empty in American stores. He said Americans could just get by with buying fewer dolls for their children — a characterization of China as a factory for toys and other cheap junk that is wildly out of date.
The United States needs to realize that neither tariffs nor other trade pressure will get China to abandon the state-driven economic playbook that has worked so well for it and suddenly adopt industrial and trade policies that Americans consider fair. If anything, Beijing is doubling down on its state-led approach, bringing a Manhattan Project-style focus to achieving dominance in high-tech industries.
China faces its own serious challenges. A prolonged real estate slump continues to drag on economic growth, though there are signs that the sector may be finally recovering. Longer-term challenges also loom, such as a shrinking work force and an aging population. But skeptics have been predicting China's peak and inevitable fall for years, only to be proved wrong each time. The enduring strength of a state-dominated Chinese system that can pivot, change policy and redirect resources at will in service of long-term national strength is now undeniable, regardless of whether free-market advocates like it.
Mr. Trump's blinkered obsession with short-term Band-Aids like tariffs, while actively undermining what makes America strong, will only hasten the onset of a Chinese-dominated world.
If each nation's current trajectory holds, China will likely end up completely dominating high-end manufacturing, from cars and chips to M.R.I. machines and commercial jets. The battle for A.I. supremacy will be fought not between the United States and China but between high-tech Chinese cities like Shenzhen and Hangzhou. Chinese factories around the world will reconfigure supply chains with China at the center, as the world's pre-eminent technological and economic superpower.
America, by contrast, may end up as a profoundly diminished nation. Sheltered behind tariff walls, its companies will sell almost exclusively to domestic consumers. The loss of international sales will degrade corporate earnings, leaving companies with less money to invest in their businesses. American consumers will be stuck with U.S.-made goods that are of middling quality but more expensive than global products, owing to higher U.S. manufacturing costs. Working families will face rising inflation and stagnant incomes. Traditional high-value industries such as car manufacturing and pharmaceuticals are already being lost to China; the important industries of the future will follow. Imagine Detroit or Cleveland on a national scale.
Avoiding that grim scenario means making policy choices — today — that should be obvious and already have bipartisan support: investing in research and development; supporting academic, scientific and corporate innovation; forging economic ties with countries around the world; and creating a welcoming and attractive climate for international talent and capital. Yet the Trump administration is doing the opposite in each of those areas.
Whether this century will be Chinese or American is up to us. But the time to change course is quickly running out.
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