How Nineteen Months Shifted Power to Beijing
When Xi Jinping arrives in Washington on Sept. 24, the pageantry will obscure a harder fact: over the past nineteen months, the balance of power has shifted measurably toward Beijing.
The Iran conflict of President Donald Trump’s second term exposed the limits of American power, isolated the United States internationally, and added inflationary pressure to the world economy. But the development historians may ultimately deem far more consequential lies elsewhere: the failure of Trump’s China policy.
The Failure That Went Unnoticed
Over the administration’s first year and a half, the United States let its most formidable geopolitical rival gain ground on nearly every front: the economy, the military balance, science, technology, and geopolitical influence. Nineteen months is a short time for a war and a long time for a strategy. The damage never arrived as a single night of television. It accumulated.
Measuring that requires precision about what Beijing wants. China has little interest in building a “Chinese world order” modeled on the postwar Pax Americana — the arrangement of alliances, institutions, and open markets through which Washington organized the West after 1945. Its aims are narrower and more achievable. Constrain American power. Push the United States out of its dominant position in Asia. Blunt its financial leverage. Weaken Western-oriented international institutions. Discredit its democratic system. Beijing seeks, in other words, to accelerate the historical trend Xi Jinping has described as the rise of the East and the decline of the West. In under two years, the White House has moved that outcome closer.
The larger picture is how far and how fast the balance of power has shifted in Beijing’s favor. China has weathered the trade war. It has narrowed the technology gap. It has tightened its leverage over critical supply chains — the supplier networks, materials, and components on which a modern economy runs. It has increased pressure on Taiwan. It has deepened ties with Russia and much of the global south — shorthand for developing countries, mostly in Asia, Africa and Latin America. By every one of these measures it is better positioned relative to the United States than it was when Trump returned to office.
What the Tariff War Bought
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China failure has gone unrecognized for two reasons. First, the White House never set out a stable hierarchy of goals toward China, so there is no yardstick against which to measure the record. The administration’s 2025 National Security Strategy did not identify China as America’s paramount geopolitical competitor. [1] It framed the challenge mainly in economic terms, even as other parts of the administration went on treating Beijing as a major military, technological, and security threat. Second, the damage is long-term. Unlike Iran — one highly visible crisis — a failed China policy arrives as a slow subtraction, and slow subtractions are easy to miss.
Some costs, though, are already visible. The trade deficit is the place to start — the gap between what a country buys from abroad and what it sells, which Trump has long treated as the scoreboard of American trade. It has hardly improved. The administration may fairly claim that China is no longer the trading partner with which the United States has its largest deficit. But the tariff war rerouted Chinese exports through third countries, chiefly Vietnam, Taiwan, and Mexico. A tariff is a tax collected at the border on imported goods. Weighed against the substantial costs that tariff volatility — tariffs that rise, fall, and threaten to rise again — imposed on American manufacturers and consumers, the policy has been a net negative for the U.S. economy.
More critical, and far less visible, is the failure to reduce the economy’s supply-chain dependence on China. Rare earths and magnets are the clearest case — rare earths are a group of metallic elements used in magnets, electronics, and weapons, while magnets are components that sit inside motors, electronics, and weapons systems, and Beijing holds a commanding position in both. These were the chokepoints — narrow points in a supply chain where a single supplier controls the flow — that the administration inexplicably failed to anticipate Beijing would use as leverage against Washington’s punitive tariffs. The exposure runs well beyond minerals. Vast swaths of industrial inputs critical to U.S. manufacturing are still sourced from China. When the White House threatened to raise tariffs further, it was quickly reminded that U.S. farmers’ revenues were to a large extent hostage to Chinese purchases of soy and animal products. Beijing retaliated. Trump was forced to reach a truce.
The October 2025 Busan agreement, struck when Trump and Xi met on the sidelines of the Asia-Pacific Economic Cooperation meeting, made the arithmetic public. [2] Trump abandoned his threat of an additional 100 percent tariff on Chinese imports. [1] In return he got a fragile truce covering rare earths, soybeans, fentanyl, and export controls — the rules that determine which technologies may be sold abroad, and to whom. The rest of the world took note. Iran, by blocking the Strait of Hormuz — the narrow sea passage between the Persian Gulf and the Gulf of Oman, through which much of the world’s oil moves — discovered that its leverage over the United States was stronger than it had imagined before the war. China has now shown something similar: it can withstand, route around, and retaliate against even Washington’s most aggressive trade measures. American economic leverage has limits, and the limits have been documented.
The Lead That Keeps Narrowing
Most damaging over the long term is what happened to America’s once-sizable advantage in artificial intelligence. The United States still leads. But China has gained ground in both innovation and adoption — adoption meaning the spread of the technology through factories, offices, and public services. Its large language models now rival, and in some functions exceed, U.S. models at a fraction of the cost. Those models are trained on huge volumes of text to generate and analyze language. The popularity of China’s open-weight models, which can be downloaded and modified rather than rented from a company, combined with its manufacturing strength and its lead in industrial robot deployment, gives Beijing significant strengths in spreading AI at home and abroad. It is also making steady progress on its key weakness: limited computing power.
Trump keeps claiming the United States is “leading China by a lot.” [1] The lead is narrowing, and not only because of Chinese policy and ingenuity. The administration ignored the requirements of its own strategy and applied the tools it inherited incoherently. It failed to sustain the Biden-era controls on advanced semiconductors and moved too slowly against predictable workarounds. Chinese firms trained models on banned chips obtained directly or through third countries. Export controls can buy time, but their usefulness depends on anticipating how a rival will adapt. The administration kept busy blacklisting companies; its approach stayed disorderly and reactive. China worked methodically, combining basic and applied research, process innovation, and the quiet exploitation of the advances and capabilities of U.S. AI companies.
The overall balance sheet still favors Washington. The U.S. economy is powering ahead. Markets are at record highs. American firms are more richly capitalized than ever. China, meanwhile, struggles with a property-debt hangover — the debt left behind by a building boom — adverse demographic trends, and deadening political control. All of that is true. But a snapshot is not a trend, and this snapshot misses the longer-term dynamic. Nineteen months is a short window for a rivalry measured in decades. It was long enough.
Sources
1. White House