As Donald Trump and Australian Prime Minister Anthony Albanese addressed reporters in the White House cabinet room on Tuesday morning, the presence of another world leader loomed large. Chinese President Xi Jinping, though absent, was a focal point of discussion. Trump’s remarks on the AUKUS nuclear-powered submarine pact and his interaction with Kevin Rudd were significant in Australia, yet it was his comments on Xi and Taiwan that captured global attention. When asked if AUKUS aimed to deter China, Trump affirmed, “Yes.”
This straightforward response was characteristically Trumpian. While China’s military expansion is a primary reason for Australia’s pursuit of advanced military technology, leaders have typically avoided such explicit statements. Trump, however, expressed confidence that Xi would not attempt to seize Taiwan during his presidency. “I think we’ll be just fine with China. China doesn’t want to do that,” he stated, adding, “As it pertains to Taiwan, and that doesn’t mean it’s not the apple of his eye because probably it is, but I don’t see anything happening.”
Explaining his relaxed stance on the potential for conflict, Trump asserted, “First of all, the United States is the strongest military power in the world by far. It’s not even close. We have the best equipment. We have the best of everything, and nobody’s going to mess with that. And I don’t see that at all with President Xi.”
Trump’s Foreign Policy Shift
The timing of Trump’s comments is critical. As noted by Politico, this marked only the second time Trump had addressed Taiwan since reassuming office in January. His remarks came as he prepared for a meeting with Xi, expressing optimism about future relations. “I think we’re going to get along very well,” he said of Xi.
Trump’s initial months in office have been dominated by European and Middle Eastern affairs, including a fragile ceasefire in Gaza and ongoing tensions in Ukraine. Now, his focus shifts to the Asia-Pacific region. Next week, Trump will attend the ASEAN meeting in Kuala Lumpur, followed by a visit to Tokyo to meet Japan’s new Prime Minister Sanae Takaichi, and then to the APEC summit in South Korea.
Implications for Australia
For Australia, balancing economic ties with China and security alliances with the US is crucial. Albanese has stabilized relations with Beijing and lifted trade barriers while countering China’s influence in the Pacific through a defense treaty with Papua New Guinea. A recent incident involving a Chinese military aircraft and an Australian plane over the South China Sea highlighted the risks of escalation. Australian officials are wary of US provocations but also cautious of underestimating Xi’s strategic ambitions.
Trump, known for his bold declarations, told reporters, “We’ll make a deal on, I think, everything.” He mentioned potential agreements on soybeans, nuclear issues, and de-escalation talks with Russian President Vladimir Putin, suggesting China could be included in these discussions.
The Taiwan Dilemma
Trump’s approach to Taiwan is under scrutiny. Supporters fear he might trade US support for Taiwan for a comprehensive trade deal with Xi. The upcoming Trump-Xi meeting will test this theory. The outcome depends on ongoing trade talks between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, which began in Malaysia and continue through the weekend.
Australian officials view engaging Trump in the Indo-Pacific as vital. His promise of a “deal on everything” has significant implications for global trade, regional power dynamics, and Taiwan’s status. Defense expert Sam Roggeveen, observing from Canberra, expressed concern over Trump’s casual rhetoric regarding Taiwan. US officials believe Xi has instructed the Chinese military to prepare for a potential conflict over Taiwan by 2027, though no deadline is set. In September, Xi showcased China’s military prowess in a Beijing parade, featuring advanced missiles and technologies relevant to a Taiwan conflict.
“Miscalculation is a danger on both sides,” says Roggeveen. “The Chinese feel confident, and the US system seems in decline. They feel the winds of history behind them.”
Roggeveen argues that Trump’s belief in US military deterrence is misplaced. While the US has the most powerful military on paper, the dynamics in the Taiwan Strait have shifted. China boasts the world’s largest navy and missile force, with a geographic advantage. Taiwan holds greater significance for China than the US, giving Beijing more motivation to prevail in a conflict.
Complexities of a Chinese Invasion
The likelihood of a Chinese invasion of Taiwan is debated. The Stimson Centre, a Washington think tank, described such an invasion as “among the most complex and dangerous military operations in history” in a September paper. They argue that the risks of nuclear escalation, political upheaval, and economic catastrophe make an invasion unlikely.
Naval expert Jennifer Parker believes Trump’s comments on Taiwan are typical of his bravado. “It’s the type of bravado you expect from Trump,” she says. Despite Trump’s confident rhetoric, those around him are less relaxed about potential conflict.
“Let me be clear: any attempt by communist China to conquer Taiwan by force would result in devastating consequences for the Indo-Pacific and the world,” stated Defense Secretary Pete Hegseth in a major speech in Singapore.
Under Trump, the US has deepened military cooperation with Taiwan, including stationing US Army Special Forces at Taiwanese command centers. This strategic positioning underscores the US’s concern about a potential Chinese invasion and the need for Taiwan to prepare.
Trade Tensions and Rare Earths
While Trump touts potential trade deals, US Treasury Secretary Scott Bessent has criticized China’s trade practices. Bessent warned of global decoupling if China remains an unreliable partner, particularly regarding its control over rare earths and magnets essential for high-tech products.
China’s recent export controls on rare earths have escalated tensions, affecting global supply chains. In response, Albanese secured a $13 billion deal with the US to develop rare earths projects in Australia, aiming to reduce China’s monopoly. Beijing’s muted reaction suggests it does not see an immediate threat to its dominance.
“This deal between the US and Australia is at a very preliminary stage. It takes years, if not decades to build a similar supply chain,” says Chucheng Feng, founder of Hutong Research.
Wendy Cutler, vice president of the Asia Society, believes China’s rare earths strategy was disproportionate and pre-planned. “Beijing just overplayed its hand here,” she says, noting the international pushback. While the deal may not be a game-changer for the Trump-Xi meeting, it strengthens the US’s negotiating position by showcasing efforts to diversify supply sources.
Analysts agree that a substantive deal between Washington and Beijing remains distant. They are caught in a cycle of escalating and de-escalating tensions without addressing core issues. “There’s no grand bargain to be had at APEC,” says Richard McGregor of the Lowy Institute. “This is a generational struggle.”
Cutler suggests deals on soybeans and fentanyl are possible, but major concessions on export controls or tariffs are unlikely. Inside China, experts argue that Beijing will maintain its rare earths restrictions unless the US eases its technology export curbs.
“What China wants to tell the US is that enough is enough. Don’t keep pushing,” says Wu Xinbo, dean of international studies at Fudan University.
As Trump prepares for his meeting with Xi, the world watches closely to see whether his bold rhetoric translates into substantive agreements or remains mere bravado.
