The G-2 Reality
America and China Cannot Dominate or Exclude Each Other
Zheng Wang
May 26, 2026
Soldiers holding up U.S. and Chinese flags before the presidential summit in Beijing, May 2026
Evan Vucci / Reuters
ZHENG WANG is Professor of Diplomacy and International Relations and Director of the Center for Peace and Conflict Studies at Seton Hall University. He is the author of Never Forget National Humiliation: Historical Memory in Chinese Politics and Foreign Relations.
President Donald Trump’s visit to China in mid-May was filled with carefully choreographed photo ops, diplomatic pageantry, and announcements of blockbuster commercial deals. The deeper significance of the summit, however, is that Washington and Beijing are beginning to accept that neither side can force the other into submission. After years of trade wars, technology controls, and military competition, the two countries are discovering the limits of coercion.
This does not mean the two superpowers will reconcile or that they will turn back the clock to policies based on engagement. It means the beginning of a new G-2 world—a world in which the United States and China can restrict, punish, and disrupt each other, but they cannot dominate or exclude each other. The United States remains the world’s military powerhouse, but China can now push back on Washington’s power projection in the western Pacific. And Washington and Beijing can cause substantial damage to each other’s economies, yet neither can prevent the other from being a major economic and technological player.
The summit in Beijing confirms that the idea of a G-2, which Trump casually floated last year in South Korea, is becoming a reality. In this new G-2 world, the United States and China are not jointly governing the globe, but they are structurally bound by competitive coexistence—a relationship in which neither side can triumph on its own terms nor afford to be drawn into sustained conflict. After failed attempts by both sides to “win,” the conditions are in place for a more stable and productive rivalry between Washington and Beijing.
BEYOND MUTUAL DESTRUCTION
During the Cold War, the relative stability between the United States and the Soviet Union rested on mutually assured destruction. Each side had the capacity to destroy the other with nuclear weapons, and each understood that a full-scale war would leave no real winner and cause irreparable harm. Mutually assured destruction did not end the ideological rivalry or geopolitical competition between the two superpowers, but it forced them to recognize the limits of coercion. It helped preserve an uneasy cold peace.
The U.S.-Chinese relationship today is not a replay of the Cold War. The two countries are not separated into rival economic and political blocs, as the United States and the Soviet Union were. Despite ongoing efforts to decouple and reduce interdependence, Washington and Beijing remain embedded in the same global economy, technology ecosystem, financial networks, and supply chains. Those connections are producing a type of competition unlike that of the U.S.-Soviet contest, but which could promote stability in different ways.
For the past decade, many policymakers in Washington believed that the United States could outcompete China or at least constrain its rise. Presidents of both parties worked to maintain a technological and economic edge over China. They imposed tariffs, export controls, and investment restrictions, and they sought to coordinate with allies in Europe and the Indo-Pacific as they realigned critical supply chains away from China.
Each side can hurt the other but cannot reduce it to strategic irrelevance.
In Beijing, meanwhile, confidence has been growing that time is on its side. In official speeches, state media reports, and policy commentary, the idea that “the East is rising and the West is declining” has gained influence. Some Chinese strategists believe that the United States’ political polarization, institutional dysfunction, and internal chaos are signs that American decline is no longer a prediction but a process already underway.
Recent developments have proved that both positions were unrealistic. China has made major advances in artificial intelligence, robotics, advanced manufacturing, and military technology. The launch of DeepSeek, the large language model created in China that performs comparably to American equivalents at a fraction of the price and computing power, was a powerful reminder that U.S. restrictions have not stopped China from rapid technological development. And although China’s domestic AI chips still lag behind those made in the United States, Chinese firms are advancing in the sectors Washington has tried hardest to control.
At the same time, no matter how acute its dysfunction, the United States is not fading away. It still commands unmatched strengths in finance, technology, higher education, capital markets, and corporate power. By mid-May, the U.S. company Nvidia had reached a market value of roughly $5.7 trillion, larger than the projected GDP of Germany, the world’s third-largest economy. And despite Washington’s aggressive behavior and dismissive rhetoric toward its partners, allies have continued to work with the United States on technology controls, including efforts to reduce dependence on Chinese supply chains.
DOMINANCE DENIED
China is not easily locked down, and the United States is not easily displaced. The result is not mutually assured destruction in the Cold War sense but two newer forms of mutual denial that make coexistence necessary.
The first is mutual denial of dominance. In the western Pacific, especially around Taiwan and along the first island chain that stretches from Japan through the Philippines to the South China Sea, the United States still possesses powerful naval and air forces, a strong alliance network, and nuclear deterrents. But as China has increased its missile, naval, air, and surveillance capabilities, the United States can no longer assume that it can operate in the region uncontested. If China were to blockade Taiwan or attempt an amphibious landing on its shores, the question would no longer be whether the United States would choose to come to the island’s defense but whether it could do so at an acceptable cost.
China does not need to surpass the United States globally to complicate Washington’s power projection in the region. Beijing needs only to make intervention costly, uncertain, and dangerous. According to a recent study by the political scientists Nicholas Anderson and Daryl Press, if conflict were to break out over Taiwan, the United States would be highly vulnerable because China could strike the bases from which U.S. aircraft would have to operate and limit Washington’s ability to sustain air operations.
But China cannot dominate the western Pacific, either. It does not have the military capability to drive the U.S. Navy and Air Force out of the region, nor can it erase the role of American alliances and global military networks, submarines, and long-range strike capabilities. The region is not shifting from U.S. dominance to Chinese dominance; instead, each side is strong enough only to deny the other’s ability to exert control. Each superpower can contest the other’s freedom of action and make any attempt to claim a decisive advantage dangerous.
EXCLUSION DELUSION
A similar logic applies in the economic and technological domains, where Washington and Beijing are settling into another more stable pattern: mutual denial of exclusion. The United States can impose costs on China by restricting market access for Chinese firms, screening Chinese investments in the United States, and coordinating with allies on these actions. The Biden administration’s “small yard, high fence” approach, in which Washington tried to strictly control Beijing’s access to a small number of critical technologies, reflects the United States’ advantage in certain advanced sectors. But China’s technological successes have also shown the limits of these policies. The United States can slow China’s access to certain cutting-edge technologies, but it cannot fully exclude China from the global economy or stop it from developing alternative capabilities.
China, for its part, has powerful tools it can wield against the United States. It can restrict exports of rare earths and critical minerals, which the United States needs for producing semiconductors, aerospace systems, advanced weapons, and other high-tech products. China’s outsize manufacturing capacity and huge domestic market give it bargaining power over foreign companies that depend on Chinese factories and consumers. But Beijing cannot exclude the United States from the Asian economic order and China’s own market without imposing major costs on itself. China still needs to be able to sell its products overseas, obtain technology and capital from the United States, and maintain access to global consumers.
Two cases show the power and limits of each side’s ability to brandish its economic weapons. The United States’ sweeping semiconductor controls on China, which Washington introduced in 2022, slowed China’s access to advanced computing chips and the equipment needed to manufacture them. But they also pushed Chinese firms to accelerate domestic alternatives, which have developed quickly. Beijing’s restrictions on rare-earth exports after Trump imposed tariffs on China in 2025 created a similar dynamic: they imposed short-term pressure on U.S. supply chains but provided Washington and its allies with stronger incentives to find different suppliers in the long term.
In both chips and rare earths, each side has leverage, but neither can use it decisively. Some analysts have described this condition as “mutually assured disruption.” But it goes deeper. It is a shared inability to fully exclude the other side from global economic and technological systems. Each side can hurt the other but cannot reduce it to strategic irrelevance. That is why the United States and China are not moving toward either decoupling or renewed interdependence. The dynamic between them is a more coercive, more fragile, and more constrained form of coexistence.
THE TAIWAN TEST
Taiwan is the hardest test of this emerging coexistence. It is not just a geopolitical dispute over a strategically located island. Beijing sees unification with Taiwan as a core element of its sovereignty, historical narrative, national identity, and political legitimacy. Washington sees Taiwan as a test of American credibility as a regional security guarantor and of the strength of its alliance commitments, and as a critical factor in the regional balance of power. For many people in Taiwan, meanwhile, the central issue is the preservation of a democratic identity strengthened through decades of political development.
As a central node in the global semiconductor supply chain, Taiwan is also deeply embedded in the technological order that both Washington and Beijing are trying to shape. A crisis over Taiwan would threaten global markets, advanced technology production, supply chains, and confidence in the international economy. Taiwan is where the military and economic logics of the U.S.-Chinese rivalry converge.
Taiwan’s highly polarized and fiercely competitive politics add another layer of uncertainty. Political leaders have pursued different approaches to cross-strait relations. In March 2025, Taiwanese President Lai Ching-te described China as a “foreign hostile force” and announced new measures against Chinese infiltration, enraging Beijing. In April 2026, by contrast, Cheng Li-wun, chair of the Kuomintang, Taiwan’s largest opposition party, met with Chinese leader Xi Jinping in Beijing and said that people on both sides of the strait are “all Chinese and one family”—a position that Beijing embraces but that is unpopular with many people in Taiwan. The island is not merely an object of great-power competition; its domestic politics often determine the timing and intensity of cross-strait tensions, complicating the G-2 relationship.
To keep this combustible situation under control, the United States and China must offer strategic reassurance by providing credible signals that exercising restraint will not endanger either side’s core interests or long-term aspirations. For Washington, this could include reaffirming that it does not support Taiwan’s independence. For Beijing, it could mean reducing military pressure on Taiwan and reiterating that it is committed to peaceful solutions. The goal is not to manufacture trust or solve the question of Taiwan’s status through a single political deal. It is, more simply, to avoid war. The United States and China need to treat Taiwan as a shared long-term challenge that requires sustained conflict management. If it is mishandled, it could turn competitive coexistence into great-power war.
TOWARD COMPETITIVE COEXISTENCE
Trump did not create the current G-2 reality. But his visit to Beijing gave it a political and diplomatic expression that many traditional politicians might have found difficult to achieve. At the summit, Trump treated Xi as the leader of a peer power, handled questions about Taiwan with unusual caution, and framed the relationship around bargaining and stability rather than ideological confrontation. In doing so, he displayed three elements of a successful program of competitive coexistence: respect, restraint, and reciprocity.
In American politics, any move to lower tensions and create a more stable relationship with China is often attacked as weakness, appeasement, or surrender. Trump’s willingness to buck tradition and his disregard for the typical constraints of alliance politics or the language of great-power competition seem to have afforded him the room to make a pragmatic adjustment toward reconciliation with Beijing.
Taiwan is the hardest test of this emerging coexistence.
This does not make Trump a stabilizing figure. His unpredictability can also generate new crises. But it makes him unusually suited to a moment in which both countries are bargaining over the terms of coexistence rather than debating whether coexistence is necessary. It is not engagement, which is a relic of an era in which the United States was far more powerful than China. Instead, what Trump did in Beijing—such as agreeing to create boards of trade and investment, which would place economic disputes within a framework of sustained negotiation and joint management—can be interpreted as an attempt to bargain within the new structure of mutual denial.
The new G-2 will not be comfortable, nor will it be built on friendship, shared values, or deep trust. It will be marked by competition, suspicion, bargaining, and periodic crises. The summit in Beijing did not resolve the U.S.-Chinese rivalry, but it made clear that the relationship has entered a new phase. The official readouts from both sides after the visit even coined a term for it: a constructive relationship of strategic stability. Stripped of diplomatic jargon, this is coexistence.
The United States and China should not confuse competition with domination or exclusion. Believing that China can be held back or that the United States can be waited out will lead both sides toward costly miscalculations. What policymakers need to do instead is to make this emerging coexistence more disciplined, more stable, and less vulnerable to crises. That will require restraint, conflict management, and strategic reassurance, especially around Taiwan. For Washington and Beijing, the first step toward a more stable relationship is to take the G-2 world seriously—not because it is desirable but because it is already here.
Topics & Regions: United States China Diplomacy Geopolitics U.S. Foreign Policy U.S.-Chinese Relations
