Trump's America First risks ceding more ground to China in Pacific
Originally published on Nikkei Asia
Donald Trump's reelection and the return of his America First approach will inject new uncertainty into U.S. foreign policy. While his hardline stance on China will likely persist, the U.S. is already losing ground in the Pacific, where Beijing is regaining influence through its development projects as U.S. engagement falters.
The Pacific is strategically important for the U.S., to prevent any regional power from threatening its interests and allies, and to maintain open access to essential trade and transit routes to Asia. For China, the stakes are just as high. The Pacific is a key link in its "Air Silk Road" to the Americas, and a battleground for Taiwan's diplomatic future. Both powers see foreign aid as a key tool to strengthen influence in a region facing immense development challenges.
China has dominated Pacific aid for the past decade, pouring billions into infrastructure and emerging as the second-largest bilateral donor after Australia, according to the Lowy Institute Pacific Aid Map. By contrast, U.S. aid remains narrowly focused on its Freely Associated States -- Micronesia, the Marshall Islands, and Palau, leveraging ties through the Compacts of Free Association (COFA).
The COVID pandemic disrupted these dynamics. China's reliance on large-scale infrastructure projects was curtailed by border closures and debt concerns. Beijing signed no new loan deals in 2020 for the first time in over a decade. Meanwhile, U.S. aid surged, with Washington doubling down on COFA states and ramping up health care and financial assistance during the pandemic. This aligned with Washington's broader push to reengage with the Pacific, highlighted by a landmark Pacific leaders' summit at the White House, whirlwind visits from senior U.S. officials and the opening of new embassies in the Solomon Islands, Tonga and Vanuatu.
Yet Washington's momentum fizzled as promises stalled in Congress. By 2022, U.S. aid to the region had dropped 19%, revealing a persistent gap between rhetoric and action.
Meanwhile, China adapted to the post-pandemic fragility of Pacific economies. Under Chinese President Xi Jinping's "Small and Beautiful" strategy, Beijing pivoted to smaller, targeted grants addressing local priorities and debt concerns. The shift saw China’s annual Pacific project volume triple compared to a decade ago, with average project sizes shrinking from $8 million to $2 million. Grants now comprise nearly two-thirds of Chinese aid, helping Beijing reclaim its position as the region's second-largest donor, overtaking the U.S.
What Trump's Pacific policy might look like remains unclear. His Agenda47 platform ignores climate change -- the region's top concern -- and his administration's emphasis on aligning aid with national security goals could deepen U.S. focus on countering China, but risks overlooking broader Pacific priorities.
To regain influence, Washington must expand its support beyond the COFA states, as promised under Biden's 2022 U.S.-Pacific Partnership. But boosting aid alone won't suffice. Close collaboration with Australia is important. Canberra has a deep understanding of Pacific priorities, diplomatic posts across all Pacific Island states and the largest aid footprint in the region. As a trusted partner wary of China's growing influence, Australia can amplify U.S. efforts in both development and geopolitics.
While U.S. officials insist Pacific relations are bipartisan, sustaining meaningful engagement requires more than promises. Without consistent follow-through and strategic coordination with allies like Australia, Washington risks ceding more ground to Beijing. The Pacific isn't just a backdrop for superpower competition, it's the front line. Right now, China is pulling ahead.
