In a pivotal moment that reshaped global power dynamics, China has emerged as an economic and strategic peer to the United States, a transformation catalyzed by actions taken during President Donald Trump's administration in 2025. According to Rush Doshi, a former national security official and leading China expert, President Trump's aggressive tariff strategy against China, intended to curb unfair trade practices, inadvertently compelled Beijing to deploy its own economic leverage, ultimately demonstrating its parity with the U.S.
Doshi, who served on the National Security Council during the Biden administration and has extensive experience in U.S.-China policy formulation and negotiation, detailed this pivotal moment in a recent interview. He argues that the "sky-high tariffs" imposed by Trump on Chinese goods, some reaching as high as 140%, were a strategic miscalculation. Rather than capitulating, China responded by threatening to restrict access to rare-earth minerals and magnets, critical components essential for global manufacturing across numerous sectors.
This strategic countermove by China, Doshi explained, forced the Trump administration to reconsider its approach. Faced with warnings from major industries, including the automotive sector, about potential production shutdowns due to a lack of these vital materials, the administration opted to significantly reduce tariffs. This de-escalation, Doshi contends, signaled China's growing capability to exert influence on U.S. economic policy and solidified its position as America's peer.
"There are moments, quite frankly, in world history where you feel the tectonic plates shifting beneath you," Doshi stated, characterizing the events of 2025. He elaborated that President Trump's imposition of unprecedented tariffs pushed Beijing into a corner. Chinese President Xi Jinping's response was to leverage China's near-monopoly on rare-earth minerals and magnets, a critical choke point for international production.
When China threatened to control the supply of these vital materials, impacting global manufacturing sectors, the Trump administration faced a difficult choice. The potential for widespread production disruptions led to significant pressure from domestic industries. Consequently, Trump decided to reduce tariffs substantially, by approximately 100 percentage points, and subsequently pursued a policy of "detente" with China. This approach, Doshi noted, prioritized avoiding further escalation and market instability over aggressively protecting certain American economic interests.
Doshi further explained that the Trump administration had considered more aggressive actions, such as imposing financial sanctions on Chinese banks or restricting the export of advanced AI chips and the U.S. technology that China relies on for manufacturing less advanced chips. However, these options were ultimately set aside, partly due to concerns about market reactions and the lingering threat posed by China's rare-earth mineral leverage.
The Chinese action in 2025 was particularly striking and unprecedented. Beijing declared that any product globally with even 0.1% of its value derived from Chinese rare-earth minerals or magnets would require a license from China to be sold. Doshi likened this strategy to the U.S. financial sanctions, where access to dollars can be restricted. "Just as you say nobody can use your dollars if you say so, we're saying nobody can use our rare earths if we say so," he explained, highlighting the profound shift in leverage and China's assertion of its own economic power.
This episode, Doshi believes, marked a turning point where China demonstrated its ability to use its own unique economic tools to influence U.S. markets and policy, a "game changer" that solidified its position as America's geopolitical equal. He noted that while the Trump administration identified China's unfair trade practices, such as dumping subsidized goods, the Biden administration continued this recognition, understanding China's strategic goal of increasing its self-reliance and reducing global dependence on other supply chains, a policy known as "dual circulation."
China's ambition extends beyond economic self-sufficiency. Doshi highlighted China's pursuit of leadership in what he termed the "Fourth Industrial Revolution," encompassing advancements in artificial intelligence, robotics, and quantum computing. He drew parallels to historical industrial revolutions, where dominant powers like Great Britain (steam power) and the U.S. (electrification, mass manufacturing) emerged as global leaders. China aims to win this next technological race not only for economic prosperity but also for geopolitical power.
"And China thinks that AI and robotics and quantum and all of this will comprise the next industrial revolution, and they want to win it, not just for the sake of wealth, but also for the sake of power," Doshi stated. He concluded that both the Trump and Biden administrations recognized that China's economic strategies, including the export of cheap, subsidized, and increasingly high-quality goods underwritten by state banks, were detrimental to American industries.
This strategic competition has fundamentally altered the U.S.-China relationship. The events of 2025, where China successfully countered U.S. economic pressure with its own leverage, have established a new equilibrium. The ongoing summit between President Trump and Chinese leader Xi Jinping, occurring on May 14, 2026, takes place against this backdrop of a recognized peer-to-peer rivalry, where both nations navigate complex economic and geopolitical challenges.
While the first day of the summit yielded no major agreements, the differing statements from the U.S. and China underscored their divergent priorities. The U.S. expressed hope for productive trade relations, whereas China issued a stark warning regarding Taiwan, indicating that mishandling the issue could lead to an "extremely dangerous situation" for the U.S.-China relationship. This highlights the persistent geopolitical tensions that continue to shape discussions between the two global powers.
Doshi's analysis, rooted in his experience drafting U.S. China strategy and negotiating with Chinese counterparts, provides a critical perspective on the evolution of this relationship. His book, "The Long Game: China's Grand Strategy To Displace American Order," further explores these themes, offering insights into China's long-term objectives and its challenge to the existing global order.
The narrative of China's rise as a peer power is not solely attributed to its economic might but also to its strategic maneuvering in response to external pressures. The 2025 trade dispute serves as a case study, illustrating how China, when cornered, can deploy unique economic tools to assert its influence and reshape the global economic landscape.
This dynamic has significant implications for international trade, supply chains, and technological development. As China continues to pursue its goals in the Fourth Industrial Revolution, its partnership with or competition against the U.S. will be a defining feature of the global economy in the coming years.
The ongoing dialogue between leaders like Trump and Xi, therefore, is not merely about bilateral trade but about the fundamental architecture of global power and the future of international relations in an era of multipolarity.
As the summit progresses, the world watches to see how these two major powers will navigate their peer-to-peer relationship, balancing competition with the necessity of cooperation on global issues.
The expert's assessment suggests that the era of unquestioned U.S. economic and geopolitical dominance has waned, replaced by a more complex and contested international order where China stands as a formidable peer.
