Decoding Trump's Foreign Policy: Part II

What will Trump's foreign policy approach look like towards China, Taiwan, Iran, and Israel?

Donald Trump’s foreign policy approach will likely echo three key themes from his first term: unilateralism, transactionalism, and economic pressure. This report will be divided into two parts.

The first focused on Mexico, Ukraine-Russia, and NATO. This one will explore foreign policy approaches and implications for Israel, Iran and China. The report is designed to take a broad, macro-view approach to Trump’s foreign policy approach.

Entire books could be written on each facet of a multi-pronged strategy i.e. economic, geopolitical, financial, multilateral, military, etc, so for the sake of brevity, a 30,000 foot view approach will be employed.

See my previous publication: “What is China's Grand Strategy for Asia?”

China

Since 2016, U.S.-China relations have significantly deteriorated. What started off as a trade war under Trump resulted in export controls and targeted tariffs under Biden.

With a potential second Trump term, import taxes and economic confrontation will likely escalate, marking a continuation of this combative trajectory.

Trump’s strategy is rooted in economic decoupling, using tariffs and trade restrictions as tools to constrain Beijing’s growing influence and reduce U.S. reliance on Chinese goods. His proposal for 60% tariffs on Chinese imports reflects a willingness to intensify pressure even at the cost of global economic friction.

Beijing has responded by framing itself as a defender of global economic integration. President Xi Jinping has sought to court trade partners and criticize Washington’s actions as disruptive, casting China as a stabilizing force in contrast to what it portrays as U.S. isolationism.

This narrative allows China to undermine U.S. leadership in global trade while fostering economic ties that weaken the effectiveness of American sanctions or tariffs.

Meanwhile, geopolitical tensions in the South China Sea and Taiwan Strait exacerbate economic decoupling. The Pentagon’s latest report highlights a sharp increase in Chinese military activity, with over 180 incidents of Chinese aircraft intercepting U.S. planes between late 2021 and 2023—more than the entire previous decade combined.

These military encounters reflect deeper conflicts over international law, with Beijing asserting sovereignty over the South China Sea while Washington rejects these claims. A second Trump term would likely see more frequent confrontations, as his administration adopts a harder line on military deterrence.

China’s actions also appear shaped by its interpretation of U.S. resolve. Observing the dynamics of the Russia-Ukraine war, Beijing may view Washington’s willingness to negotiate as a signal of declining commitment to upholding international norms.

This perception could embolden China to take a more assertive approach in territorial disputes, particularly in Taiwan, where its geopolitical ambitions converge with its economic goals.

Taiwan’s strategic importance amplifies the stakes. Responsible for producing 70% of the world’s semiconductors, the island represents a critical node in the global technological supply chain.

For Trump, countering China’s influence in Taiwan is both an economic and a geopolitical imperative. An invasion or blockade of Taiwan would hand Beijing unprecedented leverage, a scenario Trump’s administration would likely seek to prevent through a combination of economic and military measures.

Trump’s foreign policy toward China is thus defined by confrontation across multiple dimensions: economic decoupling, military deterrence, and safeguarding strategic assets like Taiwan.

His approach reflects a belief in using transactional and unilateral tactics to contain Beijing’s rise, even as it risks further destabilizing an already fraught relationship.

Taiwan

Donald Trump’s “America First” ethos and transactional diplomacy raise questions about the reliability of U.S. support for Taiwan. His suggestion that Taipei pay for American military protection and his rhetoric accusing the self-governing island of "stealing America’s chip industry" add uncertainty to the U.S.-Taiwan dynamic.

Despite these signals, Taiwan remains central to Trump’s broader approach to countering China’s regional and global ambitions. Beijing, meanwhile, has escalated its pressure campaign.

Recent military drills, such as "Joint Sword-2024B," featured a simulated blockade around Taiwan—a strategic shift from earlier exercises focused on invasion scenarios.China frames these maneuvers as warnings against "separatist acts," signaling a preference for tightening control over Taiwan without triggering direct confrontation.

This incremental strategy reflects Beijing’s calculation that a full-scale invasion may be unnecessary if coercive tactics erode Taiwan’s autonomy and global support.

Washington’s long-standing policy of strategic ambiguity further complicates the picture. By keeping its response to a potential Chinese takeover deliberately vague, the U.S. has sought to deter aggression while avoiding explicit commitments that could provoke Beijing.

Trump has not openly called for altering this policy, but his rhetoric suggests a recalibration. In an October interview, he floated the idea of tariffs on Taiwanese semiconductor exports—an unusual move given Taiwan’s critical role in global technology supply chains.

Under Trump’s first term, the U.S. approved $21 billion in arms sales to Taiwan across 11 packages, a significant increase compared to the $7 billion under Biden. This pattern of strong military support reflects Trump’s recognition of Taiwan’s strategic importance, particularly as a global leader in semiconductor production.

Yet his calls for Taiwan to increase defense spending to 10% of its GDP—up from the current 3–5%—illustrate his transactional approach, emphasizing burden-sharing over unconditional support.

Taiwan’s importance to U.S. interests extends beyond military defense. As the source of 70% of the world’s semiconductors, Taiwan is a linchpin in the global tech economy and a key factor in the U.S.-China rivalry.

Control of Taiwan would give Beijing immense leverage in the global economy, positioning China as a dominant force in critical technologies. For Trump, ensuring Taiwan’s security is not just a matter of geopolitics but also an economic imperative to counter China’s ambitions.

Despite Trump’s unpredictable rhetoric, his recent appointments of pro-Taiwan figures like Marco Rubio as Secretary of State and Mike Waltz as National Security Advisor offer reassurance.

Waltz, a known China hawk and member of the Congressional Taiwan Caucus, is expected to push for stronger U.S.-Taiwan ties, while Rubio shares a similar foreign policy framework. These appointments suggest that Trump’s administration, while transactional, understands the strategic necessity of robust U.S. support for Taiwan in countering China.

Trump’s Taiwan policy is therefore characterized by a blend of pragmatism and unpredictability. On one hand, his arms sales and hawkish appointments reaffirm U.S. support for Taiwan as a cornerstone of its China strategy.

On the other, his demands for greater Taiwanese defense spending and economic concessions reflect a transactional approach that leaves room for ambiguity.

This balancing act underscores Trump’s broader foreign policy style: leveraging economic and military tools to deter adversaries while avoiding long-term commitments that constrain U.S. flexibility.

Iran

Donald Trump’s foreign policy toward Iran in a potential second term will likely intensify the “maximum pressure” approach, combining economic sanctions, military deterrence, and strengthened alliances to constrain Tehran’s ambitions.

His strategy would prioritize choking off Iran’s revenue streams, particularly through oil exports, while countering its growing regional influence through proxies like Hamas and Hezbollah.

The events of 2023 and 2024—including the October 7 Hamas attacks on Israel, the subsequent escalation with Hezbollah, and the death of Hamas leader Yahya Sinwar—underscore the increasingly volatile landscape shaping U.S. policy in the region.

A second Trump administration would almost certainly maintain a hardline stance on Iran’s nuclear program. With Tehran enriching uranium to levels nearing weapons-grade purity, Trump would likely reimpose or expand sanctions targeting Iran’s energy and banking sectors.

Naval deployments in the Gulf to enforce sanctions and disrupt clandestine oil shipments to China or other buyers could also feature prominently. The objective would be to tighten economic isolation and deny Iran the resources it uses to fund its regional proxies and weapons programs.

Military deterrence would complement economic measures. Drawing on the precedent of the 2020 assassination of Qassem Soleimani, Trump’s approach would favor decisive, targeted strikes over prolonged conflicts. These actions would aim to disrupt Iran’s regional operations without dragging the U.S. into another Middle Eastern quagmire.

The October 7 attacks by Hamas, believed to be supported and funded by Iran, illustrate the breadth of Tehran’s proxy network. Israel responded with extensive airstrikes across Gaza and carried out targeted operations to dismantle Hamas’s leadership structure, including a strike that killed Yahya Sinwar, one of the group’s key leaders.

The conflict also triggered escalations with Hezbollah, which launched missile barrages from southern Lebanon, further entrenching the region in violence.

The heightened activity of Iranian proxies, such as Hamas and Hezbollah, will likely reinforce Trump’s commitment to Israel’s security. His administration would expand military aid and intelligence sharing with Israel, supporting its campaign to degrade Iranian-backed groups.

The death of Sinwar, along with the broader decimation of Hamas’s operational capabilities, represents a short-term victory for Israel but underscores Iran’s ability to stir regional instability through its proxies.

Beyond military dimensions, Trump would likely use the current instability to strengthen alliances among Gulf Arab states. Expanding the Abraham Accords to include countries like Saudi Arabia would serve dual purposes: isolating Iran and consolidating a regional coalition capable of countering Tehran without heavy U.S. involvement.

His transactional approach to diplomacy would likely include pushing Gulf allies to increase defense spending and deepen coordination with Israel on missile defense and counterterrorism operations.

Restricting Iran’s oil exports remains central to the “maximum pressure” strategy. U.S. sanctions under Trump previously cut Iran’s crude exports to under 400,000 barrels per day by 2019, a precedent he would likely seek to replicate.

However, Iran has adapted, using shadow fleets and expanding economic ties with China and Russia to offset some of the sanctions’ effects. Trump would likely respond with increased enforcement, including naval interdictions or seizure of smuggling vessels, further escalating tensions in the region.

The energy implications extend beyond Iran. Instability driven by proxy wars and missile attacks on key Gulf infrastructure, such as Saudi Aramco facilities, risks disrupting global energy markets. Trump’s policies would aim to mitigate these risks by strengthening Gulf states’ defensive capabilities while keeping Iran under economic siege.

In a second term, Trump’s Iran policy would prioritize containment, leveraging economic pressure, military deterrence, and regional alliances to counter Tehran’s ambitions.

The recent escalation of violence—from Hamas’s attacks to Israel’s retaliation and Hezbollah’s provocations—provides a pretext for reinforcing U.S. commitments to its allies while isolating Iran.

Israel

Donald Trump’s second-term approach to Israel is likely to focus on deepening the U.S.-Israel strategic alliance, bolstering regional coalitions against Iranian influence, and providing unequivocal support for Israeli security.

This aligns with Trump’s long-standing prioritization of Israel as a central pillar of U.S. policy in the Middle East. Trump’s vision for U.S.-Israel relations is rooted in a transactional yet ideologically aligned framework.

His administration would likely provide robust military aid, including advanced missile defense systems like Iron Dome and David’s Sling, to ensure Israel’s qualitative military edge (QME) over regional adversaries.

Intelligence sharing would also remain a cornerstone of the relationship, particularly as Iran’s proxy activities escalate across Lebanon, Gaza, and Syria. Trump’s approach will likely leverage Israel’s strategic position to build coalitions among Arab states under the framework of the Abraham Accords.

Expanding these accords to include Saudi Arabia remains a key objective, with Trump viewing normalization as both a counterweight to Iranian influence and a platform for economic and military cooperation.

The October 7 Hamas attacks, which left over 1,400 Israelis dead and thousands injured, marked a turning point in Israel’s recent security calculus. In response, Israel launched Operation Swords of Iron, an extensive military campaign aimed at dismantling Hamas’s operational capabilities in Gaza.

Israel’s efforts have included ground incursions, airstrikes on critical infrastructure, and targeted killings of key leaders, including Yahya Sinwar.

The conflict has also drawn in Hezbollah, which has intensified its rocket attacks on northern Israel. These escalations have transformed what began as a localized conflict into a broader regional crisis.

A second Trump administration would likely respond by doubling down on military aid and deploying additional assets to the eastern Mediterranean to deter further Hezbollah or Iranian intervention.

Domestically, Trump is expected to continue supporting policies that align with the agenda of Israeli Prime Minister Benjamin Netanyahu’s government, including settlement expansion in the West Bank and East Jerusalem. This could heighten tensions with the Palestinians and further diminish prospects for a two-state solution.

Regionally, Trump’s unwavering support for Israel has emboldened its security posture, particularly in its shadow war against Iran. Israeli strikes on Iranian-linked targets in Syria and sabotage operations against Tehran’s nuclear infrastructure have escalated in recent years.

Trump’s alignment with Netanyahu suggests continued U.S. backing for such actions, reinforcing Israel’s role as the frontline state in containing Iran.

Economic cooperation between the U.S. and Israel is also likely to deepen under Trump. Joint research initiatives in defense technology, cybersecurity, and AI could receive increased funding. Moreover, Trump would likely advocate for enhanced U.S. military pre-positioning in Israel, ensuring rapid response capabilities in the event of a regional escalation.

The military dimension of Trump’s Israel policy extends beyond bilateral ties. By fostering trilateral security arrangements among the U.S., Israel, and Gulf states, Trump aims to consolidate a regional coalition capable of countering Iran while reducing America’s direct military footprint in the Middle East.

This approach reflects his broader philosophy of burden-sharing, encouraging allies to assume greater responsibility for regional security.

A second Trump term would further reinforce Israel’s position as the U.S.’ closest ally in the Middle East, with a focus on security guarantees, economic collaboration, and regional coalition-building.

The events of 2023 and 2024—Hamas’s October 7 attacks, Hezbollah’s provocations, and Israel’s military responses—provide a pretext for further strengthening the U.S.-Israel alliance.

While Trump’s policies will likely solidify Israel’s security and regional standing, they risk exacerbating tensions with the Palestinians and fueling broader instability.

Looking ahead, Iran-Israeli tensions may continue to rise as what appear to be coordinated messages of regime change from Netanyahu and the exiled crown prince Reza Pahlavi converge with Trump’s maximum pressure tactics.

Is regime change in Iran on the horizon? Subscribe to find out in next week’s Strategic Intelligence report.