Washington is now where it wanted to be at the beginning of President Trump’s first term of office on January 20, 2016.

Watching Obama administration’s futile “pivot to Asia” in November 2011 to contain China, and the violent government change in Ukraine in February 2014, followed by the failure of Minsk Agreement of September 2014, Trump must have realized that a collision course with nuclear-armed adversaries was a blind alley leading to the end of humanity.

Such a thought transpired in Trump’s first inaugural address, when he said: “We do not seek to impose our way of life on anyone, but rather to let it shine as an example for everyone to follow.”

And once he got into the Oval Office, Trump repeatedly talked about peaceful and productive ties with Russia and China.

Sadly, Trump’s entire first term was consumed in fighting unproved allegations that Russia was involved in his election. That effectively prevented any thawing of virtually frozen U.S.-Russia ties by extremely hostile Obama policies. And after 458 sanctions against Russia introduced by Obama, Trump added 273 of his own anti Russia punitive actions.

China fared better on sanctions, but relations with Beijing were marred by an ineffective wave of trade tariffs and allegations of China’s large-scale theft of American intellectual property. All that, however, did not prevent China from pocketing $1.5 trillion in net trade income on U.S. trades on Trump’s watch, partly owing to massive offshoring of American manufacturing to China and excessive dependence of American supply chains on Chinese products.

Reciprocal trade with China

Those problems are still there. America’s merchandise trade deficit last year ($295.4 billion) was only 15% below the trade gap Tramp inherited from Obama in 2017. And U.S. exports to China are now barely one-third of what U.S. buys from China.

Trump wants to correct that serious trade imbalance with (1) a 10% tariff on imports from China, (2) threats of trade restrictions on China’s maritime, logistics and shipbuilding sectors and (3) curbs on Chinese direct investments in strategic areas of the U.S. economy, such as technology, critical infrastructure, healthcare, agriculture, energy and raw materials.

Trump’s memorandum of February 21, 2025, on America First Investment Policy also wants to restrict U.S. investments in China’s semiconductors, artificial intelligence, quantum, biotechnology, hypersonics, aerospace, advanced manufacturing, directed energy, and other areas implicated in Chinese dual use technologies.

The sweeping trade and investment restrictions motivated by national security considerations are understandable, but that still leaves a huge imbalance in the area of consumer products.

Trade problems with Russia are much smaller and simpler. Last year, the U.S. trade deficit with Russia was nearly halved to $2.5 billion on U.S. exports to Russia of $0.5 billion and a 35% decline of U.S. imports from Russia to $3.0 billion.

Reset relations with Russia

The outlook for a new trade deal with Russia depends on the outcome of ongoing negotiations to completely reset the countries’ bilateral relations, badly damaged by deep-seated hostilities, a huge and complex web of debilitating sanctions and the proxy war in Ukraine.

Washington and Moscow apparently believe that they made an encouraging progress toward peace and mutual understanding in the last two weeks. In spite of that, it seems that a long process of high-level diplomacy will be needed to remove the key points of friction and the conditions that have led to the conflict in Ukraine.

The scope for a revival of bilateral trade is considerable. Moscow is now reporting a growing interest of foreign companies to restore their presence in Russian markets. According to some estimates, more than 1000 companies left or curtailed their operations in Russia after the fighting in Ukraine started in February 2022.

Washington is interested in Russia’s large rare earth mineral deposits, as well as in joint venture deals covering oil, gas and aluminum.

The U.S. would also like to negotiate with Russia substantial cuts – reportedly up to 50% -- in defense spending. Moscow seems interested and sees those negotiations in the context of possible arms control renewals.

China is expected to participate in arms control and defense spending negotiations, but, as things now stand, Beijing does not seem eager to join those discussions.

How far, and how fast, the U.S. can move to revive trade with Russia and to balance trade accounts with China depends on the peace in Ukraine and a mutually acceptable reciprocal trade regime with China.

The outlook for the peace deal with Russia looks good. Trump wants to quickly get that out of the way and put all the blame on Biden administration’s proxy war with Russia.

China, however, presents a more complicated case of trade diplomacy. Apart from that, Trump would make a serious error by trying to push China beyond its red lines into a dangerous stalemate. That sort of tension with a strong nuclear-armed adversary would not be in the interest of America First and MAGA agenda.