China is bracing for what could be a volatile and highly unpredictable path ahead in its escalating great power rivalry with the United States, after Donald Trump made a historic political comeback to win the race to the White House.

His return could bring tariffs as high as 60% on Chinese goods – which could devastate economic growth in the world’s second largest economy and upend global supply chains – more technology controls and fiery rhetoric on Beijing, heightening tension in already rocky relations between the superpowers.

But Trump’s protectionist trade posture and transactional approach to foreign policy may also weaken US alliances and global leadership, presenting opportunities for Beijing to fill the void of America’s retreat and shape an alternative world order.

“Trump’s return to power will certainly bring greater opportunities and greater risks for China,” said Shen Dingli, a foreign policy analyst in Shanghai. “Whether it eventually leads to more risks or more opportunities depend on how the two sides interact with each other.”

Officially, China has sought to present a neutral stance on Trump’s win. Its Foreign Ministry said on Wednesday it “respected” America’s choice.

Chinese leader Xi Jinping congratulated Trump on Thursday. Known for his fondness for autocrats, Trump has regularly praised Xi and called the Chinese leader “a very good friend,” even as US-China relations nosedived under his watch.

Xi told the president-elect that China and America can “find the right way” to “get along in the new era,” according to a readout from the Chinese Foreign Ministry.

But beneath the calm surface, Beijing is likely bracing for impact – and uncertainties.

“Trump is a very mercurial person,” said Liu Dongshu, an assistant professor of international affairs at the City University of Hong Kong. “It remains to be seen whether he will implement, and to what extent, the policies he promised during the election campaign, and if he will stick to his first-term agenda.”

Sky-high tariffs

During Trump’s first term in office, the tough-talking populist who promised to make “America great again” launched a bruising trade war with China, backlisted Chinese telecom giant Huawei on national security grounds and blamed Beijing for the Covid-19 pandemic. By the end of his first term, bilateral relations had plunged to their lowest point in decades.

This time around, Trump has threatened on the campaign trail to slap 60% tariffs on all goods made in China and revoke its “permanent normal trade relations” status, which has given China the most favorable trade terms with the US for more than two decades.

This punitive measure, if carried through, could deliver a body blow to an economy already beset by a property crisis, flagging consumer demand, falling prices and mounting local government debts.

Investment bank Macquarie estimates that, at the sky-high 60% level, the tariffs are likely to cut the country’s growth by a full two percentage points, which would be just under half of China’s expected full-year economic expansion rate of 5%.

“Trade war 2.0 could end China’s ongoing growth model, in which exports and manufacturing have been the main growth driver,” Larry Hu, chief China economist at Macquarie, wrote in a Wednesday research note.

Investors appeared to predict this outcome as Trump’s lead over Vice President Kamala Harris widened on Wednesday, causing Chinese stocks and the yuan to fall sharply.

Tariffs act as a tax on imports, hurting consumers in the country imposing them, as well as businesses that rely on imported raw materials and intermediate goods to make finished products. A significant escalation of global trade tensions will likely inflict pain not just on China and the US, but also on other countries involved in global supply chains.

Unlike his Republican predecessors who hailed from the establishment, Trump wields an erratic and unconventional approach to policy making, adding to Beijing’s sense of uncertainty.

“Trump began his first term as an enthusiastic admirer of Xi Jinping, before levying tariffs and then vilifying Beijing during the pandemic,” said Daniel Russel, vice president of international security and diplomacy at the Asia Society Policy Institute.

“So, Beijing is likely to approach the President-elect with caution — probing to ascertain which Trump to expect and where there may be opportunities to exploit,” added Russel, who previously served as the top Asia advisor to former President Barack Obama.

Challenges and opportunities

But Trump’s “America First” agenda and transactional worldview may also play in Beijing’s favor, experts say.

“Although Beijing is deeply concerned about the unpredictability of Trump’s China policy, it reminds itself that challenges also bring opportunities,” said Tong Zhao, senior fellow at the Carnegie Endowment for International Peace.

“Despite fears of a renewed trade war, Beijing believes that Trump’s tough tariff policies would be deeply unpopular in Europe, creating an opening for China to strengthen economic ties with Europe and counter US efforts to intensify technology and supply chain decoupling between China and Western nations,” he said.

Trump’s longstanding distain for NATO (he said in February he would not defend NATO allies that fail to spend enough on defense from a future attack by Russia), as well as international alliances and institutions more broadly, also threatens to weaken American alliances that outgoing President Joe Biden has carefully cultivated to counter the threats of a rising China.

That would offer some timely relief to Beijing, which is increasingly irritated by what it sees as Washington’s strategy to encircle and contain China with an “Asian Nato.”

America’s potential inward turn under Trump will also be welcome news for Xi, who has ramped up efforts to claim leadership in the Global South and build a new world order no longer dominated by the West.

Taiwan and relations with Russia

Beijing may also be looking for ways to utilize Trump’s penchant for deal-making, including on the issue of Taiwan. China’s ruling Communist Party claims the island as its own, despite never having controlled it.

Under the previous Trump administration, which was staffed with China hawks, the US bolstered support for Taiwan through increased arms sales and diplomatic visits. But the former leader’s recent comments have fueled concerns about American commitment to the democratic island.

On the campaign trail, Trump accused Taiwan of “stealing” the chip industry from the US and said that the self-governing democracy should pay the US for protection.

Industry experts say Taiwan grew its own semiconductor industry organically through a combination of foresight, hard work and investment. And the island has purchased the vast majority of its weaponry from US arms manufacturers over recent decades. But Trump’s campaign rhetoric nonetheless hinted at a more transactional approach to Taiwan.

Asked by the Wall Street Journal in an interview if he would use military force against a blockade on Taiwan by China, Trump said it would not come to that because Xi respected him and knows he’s “crazy.” Instead, he said he would slap 150% to 200% tariffs on Beijing.

“With Trump’s relatively less strong interest in defending Taiwan, Beijing may seek greater concessions from Washington on the Taiwan issue, using both positive incentives and coercive leverage to push the United States to reduce its military and political support for Taiwan,” Zhao said.

Trump, who has touted his good relations with Russian President Vladimir Putin, has made comments that suggest the US could pressure Ukraine into an uneasy truce with Russia.

While ending the grinding war in Ukraine could remove a crucial sore point in China-Europe relations, it could also complicate Moscow’s alignment with Beijing, which has deepened since Russia’s invasion, said Liu at the City University of Hong Kong.

“If the US and Russia ease relations, it could create greater daylight between Russia and China, effectively driving a wedge between them.” Liu said.

“From everything he has said, it’s clear that Trump considers China, not Russia, as the main adversary.”

German Chancellor Olaf Scholz fired his finance minister on Wednesday, leaving the government teetering on the brink of collapse.

In a televised address, Scholz said he had dismissed Finance Minister Christian Lindner saying it “was necessary to prevent harm to our country.”

The firing came after days of political negotiation between the key members of Germany’s ruling “traffic light” coalition government – Scholz of the Social Democratic Party, Lindner of the Free Democratic Party, and Robert Habeck of the Green Party.

Following the announcement, which comes amid fears that an incoming Trump administration could spell bad news for an already ailing German economy, Lindner’s Free Democratic Party said it had left the coalition but Habeck said the Greens would remain.

Scholz said he would now call a confidence vote for January 15, which could allow elections to be held by the end of March next year. He said he would remain in office until January 15 and attempt to get the most important legislation done, suggesting he would talk to opposition leader Friedrich Merz’ of the Christian Democratic Union (CDU) to pass legislation relating to the economy and defense. “The economy cannot wait until after the elections,” Scholz said.

The so-called “traffic light crisis,” as it is known locally in reference to the the colors of the governing coalition, was triggered by competing views on the future of Germany’s economy among the three partners.

Prior to his firing, Lindner had triggered days of wrangling with the publication of an 18-page economic paper published last week, entitled “Germany’s economic turnaround.” It had been described in German media as the coalition’s divorce papers, as its tone and contents appear distinctly at odds with the positions of his government partners.

In the detailed document, which advocates for tax cuts, Lindner said “an economic turnaround with a partly fundamental revision of key political decisions is necessary in order to avert damage to Germany as a business location.”

Aside from the divides it reveals with his coalition partners, cynics are also suggesting that Lindner’s paper looks like a campaign manifesto. Before Wednesday’s developments, Germany’s next scheduled elections were due to take place in September 2025.

The last time Germany had snap elections was in 2005, when they were called by Chancellor Gerhard Schroder, who subsequently lost to Angela Merkel.

Scholz told the press conference Wednesday that “Lindner showed no willingness to implement any of our proposals” and, therefore, “there is no trust basis for any future cooperation” with the outgoing finance minister.

The Chancellor also accused the finance minister of being “not about serving the common good but about serving his own clientele and party.”

According to Scholz, Lindner will also be dismissed by the country’s President Frank-Walter Steinmeier.

Speaking to reporters later Wednesday, Lindner said he had “recommended early elections as a solution to the budget impasse” – a proposal he said Scholz rejected.

Lindner also accused Scholz of having asked him to pause the “debt brake” – a constitutional article that prevents the government from borrowing excessively and amassing debt – something Lindner said he was not willing to do.

“After the US elections we need to show we can be relied on,” Scholz said, adding that “great financial room for maneuver” is needed given the challenges that Germany faces.

The news has been welcomed by far-right Alternative for Germany (AfD) party.

“The end of the traffic light coalition is a liberation for our country. The end of the self-proclaimed ‘progressive coalition’ that took Germany to the brink of economic ruin was more than overdue,” its leader Alice Weidel posted on X.

This is a breaking news story. More to come.

Israeli Prime Minister Benjamin Netanyahu has fired Defense Minister Yoav Gallant after months of clashes over domestic politics and Israel’s war efforts.

In a recorded statement Tuesday evening, Netanyahu said that “trust between me and the minister of defense has cracked.”

Israel Katz, currently the foreign minister, will become defense minister. Gideon Sa’ar will replace Katz as foreign minister, the prime minister’s office said Tuesday. Neither has extensive military experience, though Katz has served in the cabinet throughout the war.

The move came as voters in the United States, Israel’s most important ally, voted for their next president. Gallant is a close interlocutor for the US administration, and has been said to have daily conversations with US Defense Secretary Lloyd Austin.

The reshuffle also comes as Israel awaits a potential retaliatory attack from Iran.

Gallant responded to the decision shortly after it was made public, posting on X that the “security of Israel has been and will always be my lifelong mission.”

Netanyahu said that he had “made many attempts” to bridge differences with Gallant, but that they “kept widening” and “came to the public’s knowledge in an unacceptable manner.” He continued: “Worse than that, they came to the knowledge of the enemy – our enemies enjoyed it and greatly benefited from it.”

Minutes after Netanyahu made the announcement, opposition leaders called for Israelis to take to the streets in protest. Protestors outside Netanyahu’s residence in Jerusalem shouted “shame!” In Tel Aviv, families of hostages held in Gaza chanted “Bibi is a traitor,” using the prime minister’s nickname. When Netanyahu first sought to fire Gallant last year, over his opposition to proposed judicial reforms, it led to mass nationwide demonstrations.

Israel’s political class has long speculated that Netanyahu would fire Gallant and replace him with a political ally to shore up his domestic power. Netanyahu has struggled to maintain a hold over his fragile governing coalition, a muddle of competing interests, whose collapse could spell the end of his leadership.

Clashes over the war and domestic politics

The relationship between both men was rarely cordial and often caustic. There was little love lost between them – over the state of negotiations with Hamas, Israel’s military strategy and Netanyahu’s bid to bring in a sweeping overhaul of the judiciary in 2023.

Netanyahu and Gallant have often disagreed over the war in Gaza. In August, Gallant told a closed-door Knesset committee that Netanyahu’s goal of “absolute victory” in Gaza was “nonsense,” according to Israeli media. Netanyahu then took the extraordinary step of releasing a press statement accusing Gallant of adopting an “anti-Israel narrative.”

Gallant was also highly critical of Netanyahu’s emphasis on controlling the Gaza-Egypt border, known as the Philadelphi Corridor. He said that prioritizing its control over a ceasefire and hostage deal was a “moral disgrace.” In the cabinet, he voted against continued occupation there. “If we want the hostages alive, we don’t have time,” he said.

But it may be domestic politics that ultimately played the biggest role.

Netanyahu on Tuesday was forced to withdraw draft legislation that would have allowed ultra-Orthodox Israelis to get government subsidies for daycare even if the father of the children does not serve in the Israel Defense Forces, as all other Jewish Israelis must do. Netanyahu relies on ultra-Orthodox parties to govern, and they have threatened to upend his coalition if they are forced to serve in the military en masse.

Gallant had been outspoken against the idea that ultra-Orthodox Israelis be exempt from service, saying that “the security system under my leadership will not submit it to legislation.”

Sa’ar, whom Netanyahu has tapped for foreign minister, is thought to be an influential interlocutor to the ultra-Orthodox parties. Netanyahu, in his statement, said that Sa’ar’s appointment “will enhance the stability of the coalition and the stability of the government, and these are very important at any time, but especially at wartime.”

Also on Tuesday, Israeli police announced that a criminal investigation had been opened “concerning events at the outset of the war,” without offering further details.

Gallant has repeatedly called for an official inquiry into Hamas’ October 7 attack. It is the second investigation this week that threatens to ensnare Netanyahu. On Sunday, a court revealed that police had arrested a top Netanyahu aide for allegedly leaking classified and faked intelligence to foreign media.

Netanyahu had faced pressure from far-right members of his cabinet to dismiss him, with National Security Minister Itamar Ben-Gvir saying in September that he had been demanding Gallant’s ouster for months “and the time has come to do so immediately.”

His relationship with Gallant deteriorated when the prime minister threatened to fire him in March 2023, after he criticized the government’s judicial overhaul legislation. The bill, which provoked widespread popular protests in Israel, would have granted the ruling coalition more sway in selecting judges.

Gallant was the first minister to oppose it, saying: “The deepening split is seeping into the military and security agencies – this is a clear, immediate and real danger to Israel’s security. I will not facilitate this.”

Netanyahu said he would fire the defense minister, but reversed his position following pressure. The rancor between the two men has persisted and grown since the Hamas attack last October.

This is a developing story and will be updated.

An American-Iranian journalist who once worked for a US-funded broadcaster is believed to have been detained in Iran, according to his former employer and multiple press freedom groups.

Reza Valizadeh was arrested in Tehran in September, a source close to his family told his former employer Radio Farda, the Iranian branch of the US-funded Radio Free Europe/Radio Liberty (RFE/RL).

Iran has not acknowledged detaining Valizadeh and the Iranian mission to the United Nations has declined to comment on his situation.

RFE/RL says it has had no official confirmation of the charges facing Valizadeh, who left Radio Farda in November 2022, but it is “profoundly concerned about the continued arrest, harassment and threats against media professionals by the Iranian regime.”

Reports of the journalist’s apparent detention come amid heightened tensions between the United States and Iran, whose Supreme Leader Ayatollah Ali Khamenei on Saturday promised a “teeth-breaking” response to Israel and the United States after Israeli strikes targeted Iranian military sites late last month.

Pressured to return

In a post on his X account on February 20, 2024, Valizadeh suggested Iranian authorities had pressured his family to convince him to return to the country.

In a later post, on August 13, the journalist said he had arrived back in the Iranian capital on March 6, 2024.

“Before that, I had half-finished negotiations with the (Islamic Revolutionary Guard Corps) Intelligence Organization. Finally, I returned to my country after 14 years, on my own responsibility and without a letter of amnesty, even verbally,” the post read.

RFE/RL said it was not clear under what circumstances Valizadeh had written the post.

Citing one of Valizadeh’s former colleagues, who spoke on condition of anonymity due to fears of reprisal, the New York-based Committee to Protect Journalists (CPJ) reported in October that Valizadeh was being held without access to a lawyer in Iran’s Evin prison, which is notorious for housing critics of the Iranian regime.

The US-based Human Rights Activists News Agency, which focuses on Iran, also believes Valizadeh is being held in Evin.

“Iranian authorities must immediately release journalist Reza Valizadeh and drop any charges levied against him,” said Yeganeh Rezaian, CPJ’s interim Middle East and North Africa program coordinator.

“I cannot say clearly enough to my fellow Americans what already appears on the Department of State’s website: ‘Do not travel to Iran, due to the risk of kidnapping and the arbitrary arrest and detention of US citizens.’ Simply put: Do not go to Iran,” the State Department spokesperson said.

Iran has a long history of using dual nationals as bargaining chips in its troubled relationship with the West. In 2023, it released five Americans designated by the US as wrongfully detained as part of a wider deal that included the US unfreezing $6 billion in Iranian funds.

It is currently marking the 25th anniversary of the 1979 Iran hostage crisis, in which 52 US citizens were held captive for 444 days.