Bu Lu Ke, Vision Times
According to reporting by “The Diplomat,” the latest U.S. National Security Strategy offers a sobering and pragmatic assessment of current U.S.–China relations. While the report continues to define China as Washington’s main strategic competitor, its overall tone sends a clear signal: After years of high-intensity confrontation, Washington is reassessing the costs, pace, and sustainability of long-term rivalry.
Against this backdrop, since U.S. President Donald Trump’s return to office, Sino-US competition has not fundamentally reversed course. However, following repeated cycles of escalation and recalibration, both sides appear to have settled into a pattern centered on risk control. Core disagreements remain unresolved, but the resumption of high-level engagement and working-level communication has restored a minimum degree of stability to the relationship.
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Looking ahead to 2026, “The Diplomat” assesses that U.S.–China relations are more likely to maintain a state of “low-intensity, structural competition” rather than experience sharp upheaval. That said, rare earths, Taiwan, and critical technologies remain key friction points requiring careful management.
Economic strain
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For China’s economy, 2025 marked a concentrated test of external pressure. U.S.–China trade frictions peaked in April, when Washington imposed steep tariffs on selected Chinese products and Beijing responded with countermeasures. As a result, bilateral goods trade declined sharply year-on-year during the first nine months of 2025.
Yet this contraction coincided with a broader restructuring of China’s external trade. Despite reduced exports to the U.S., China’s overall export volume continued to grow, and its trade surplus expanded to historic highs. This suggests that trade flows were reallocated rather than eliminated.
“The Diplomat” also notes that this outcome does not mean external pressure has “failed,” but rather that its impact has shifted — manifesting more in structural adjustment and cost redistribution than in systemic economic instability.
US policy language more pragmatic
Public attitudes in the United States toward China have also shown subtle shifts. A 2025 Pew Research Center survey found that a larger share of Americans view China as a “long-term competitor” rather than an outright “enemy,” with the latter category declining across both political parties.
This nuance is reflected in policy discourse. The latest National Security Strategy relies less on ideological framing and places greater emphasis on industrial, technological, and economic competition. President Trump has recently revived the concept of a “G2,” which — while lacking a clear institutional pathway — is widely interpreted as signaling a more transactional and negotiable approach.
By late 2025, the two sides had restored some communication channels and extended elements of the trade truce. Whether through bilateral talks or potential engagement at multilateral forums such as the G20 and APEC, the primary purpose remains setting boundaries and avoiding miscalculation, not resolving core disputes.
Taiwan remains the greatest uncertainty
Compared with trade disputes, military dynamics carry longer-term consequences, according to “TradingView.” U.S. officials have repeatedly pointed to China’s continued buildup of military capabilities around Taiwan, including expanded air and naval forces and missile deployments. While these developments do not make conflict inevitable, they significantly increase strategic complexity.
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Taiwan’s importance extends beyond security concerns to global supply chains, particularly in semiconductors. Though the U.S., Japan, and Europe are working to diversify production, Taiwan’s role remains difficult to replace in the near term.
Meanwhile, China’s rapid advances in artificial intelligence (AI) and advanced manufacturing continue to draw close scrutiny in Washington and Europe. Melanie Hart, director of the Global China Hub at the Atlantic Council, notes that in some application areas, the technological gap between China and the U.S. is narrowing, making competition more enduring. China views Taiwan as a breakaway province and has vowed to reclaim the self-ruling island by any means necessary, even if that means using military force.
The U.S. also faces challenges of its own. Elizabeth Economy, a senior fellow at the Hoover Institution, warns that Washington still lacks systematic integration across emerging technology domains; without long-term strategic coordination, U.S. competitiveness could erode.
Competition normalized
Overall, U.S.–China relations have not moved toward détente but have entered a phase of normalized competition with controlled confrontation. Both sides increasingly recognize that large-scale escalation offers limited strategic benefit while rapidly amplifying risk.
This does not mean danger has disappeared. Taiwan, rare earths, and critical technologies remain low-probability but high-impact flashpoints. Any loss of control in these areas would reverberate far beyond bilateral ties, affecting global supply chains and financial systems.
For this reason, both “The Diplomat” and “TradingView” conclude that 2026 is more likely to be a year of cautious stability. Competition will persist, but the overriding objective on both sides is to prevent the relationship from sliding into an uncontrollable crisis.
U.S.–China relations are now characterized by managed risk and deferred decision-making. Differences remain profound, yet in the near term, stability represents the minimum consensus neither side is willing to abandon.
