Congress
4 ways China-US relations could fracture in 2026
The message from Capitol Hill on both sides of the aisle is clear: Get ready for U.S. relations with China to spiral all over again in the new year.
The one-year trade truce brokered in October between President Donald Trump and Chinese leader Xi Jinping is already looking shaky. And lawmakers are preparing to reup clashes over trade, Taiwan and cyber-intrusions when they return in January.
“It’s like a heavyweight fight, and we’re in that short time period in-between rounds, but both sides need to be preparing for what is next after the truce,” Rep. Greg Stanton (D-Ariz.), a member of the House Select Committee on China, said in an interview.
Blue Light News talked to more than 25 lawmakers, including those on the House Select Committee on China, the House Foreign Affairs Committee’s East Asia subcommittee and the Congressional Executive Commission on China, for their views on the durability of the trade treaty. Both Republicans and Democrats warned of turbulence ahead.
More than 20 of the lawmakers said they doubt Xi will deliver on key pledges the White House said he made in October, including reducing the flow of precursor chemicals to Mexico that cartels process into fentanyl and buying agreed volumes of U.S. agricultural goods.
“China can never be trusted. They’re always looking for an angle,” Sen. Thom Tillis (R-N.C.) said.
That pessimism comes despite an easing in U.S.-China tensions since the Trump-Xi meeting in South Korea. The bruising cycle of tit-for-tat tariffs that briefly hit triple digits earlier this year is currently on pause. Both countries have relaxed export restrictions on essential items (rare earths for the U.S, chip design software for China), while Beijing has committed to “expanding agricultural product trade” in an apparent reference to the suspension of imports of U.S. agricultural products it imposed earlier this year.
This trend may continue, given that Trump is likely to want stability in the U.S.-China relationship ahead of a summit with Xi planned for April in Beijing. “We’re starting to see some movement now on some of their tariff issues and the fentanyl precursor issue,” Sen. Steve Daines (R-Mont.) said.
But a series of issues have been brushed aside in negotiations or left in limbo — a status quo the Trump administration can only maintain for so long. The U.S.-China trade deal on rare earths that Bessent said the two countries would finalize by Thanksgiving remains unsettled. And the White House hasn’t confirmed reporting from earlier this month that Beijing-based ByteDance has finalized the sale of the TikTok social media app ahead of the Jan. 23 deadline for that agreement.
“The idea that we’re in a period of stability with Beijing is simply not accurate,” said Sen. Jeanne Shaheen (D-N.H.), ranking member of the Senate Foreign Relations Committee.
Shaheen has been sounding the alarm on China’s national security threats since she entered the Senate in 2009. But even some lawmakers who have been more open to engagement with Beijing — such as California Democratic Reps. Ro Khanna and Ami Bera — said that they don’t expect the armistice to last.
The White House is more upbeat about the prospects for U.S.-China trade ties.
“President Trump’s close relationship with President Xi is helping ensure that both countries are able to continue building on progress and continue resolving outstanding issues,” the White House said in a statement, adding that the administration “continues to monitor China’s compliance with our trade agreement.” It declined to comment on the TikTok deal.
Still, the lawmakers Blue Light News spoke with described four issues that could derail U.S.-China ties in the New Year:
A soybean spoiler
U.S. soybean farmers’ reliance on the Chinese market gives Beijing a powerful non-tariff trade weapon — and China doesn’t appear to be following through on promises to renew purchases.
The standoff over soybeans started in May, when China halted those purchases, raising the prospect of financial ruin across farming states including Illinois, Iowa, Minnesota, Nebraska and Indiana — key political constituencies for the GOP in the congressional midterm elections next year.
The White House said last month that Xi committed to buying 12 million metric tons of U.S. soybeans in November and December. But so far, Beijing has only purchased a fraction of that agreed total, NBC reported this month.
“What agitates Trump and causes him to react quickly are things that are more domestic and closer to home,” Rep. Jill Tokuda (D-Hawaii) said. China’s foot-dragging on soybean purchases “is the most triggering because it’s hurting American farmers and consumers, so that’s where we could see the most volatility in the relationship,” she said.
That trigger could come on Feb. 28 — the new deadline for that 12 million metric ton purchase, which Treasury Secretary Scott Bessent announced earlier this month.
The Chinese embassy in Washington declined to comment on whether Beijing plans to meet this deadline.
The White House said one of the aspects of the trade deal it is monitoring is soybean purchases through this growing season.
The Taiwan tinderbox
Beijing’s threats to invade Taiwan are another near-term potential flashpoint, even though the U.S. hasn’t prioritized the issue in its national security strategy or talks between Xi and Trump.
China has increased its preparations for a Taiwan invasion this year. In October, the Chinese military debuted a new military barge system that addresses some of the challenges of landing on the island’s beaches by deploying a bridge for cargo ships to unload tanks or trucks directly onto the shore.
“China is tightening the noose around the island,” said Rep. Ro Khanna (D-Calif.), who joined a bipartisan congressional delegation to China in September and returned calling for better communications between the U.S. and Chinese militaries.
Some of the tension around Taiwan is playing out in the wider region, as Beijing pushes to expand its military reach and its influence. Chinese fighter jets locked radar — a prelude to opening fire — on Japanese aircraft earlier this month in the East China Sea.
“There is a real chance that Xi overplays his hand on antagonizing our allies, particularly Australia and Japan,” Rep. Seth Moulton (D-Mass.) said. “There is still a line [China] cannot cross without making this truce impossible to sustain.”
The U.S. has a decades-long policy of “strategic ambiguity” under which it refuses to spell out how the U.S. would respond to Chinese aggression against Taiwan. Trump has also adhered to that policy. “You’ll find out if it happens,” Trump said in an interview with 60 Minutes in November.
More export restrictions on the way
Beijing has eased its export restrictions on rare earths — metallic elements essential to both civilian and military applications — but could reimpose those blocks at any time.
Ten of the 25 lawmakers who spoke to Blue Light News said they suspect Beijing will reimpose those export curbs as a convenient pressure point in the coming months.
“At the center of the crack in the truce is China’s ability to levy export restrictions, especially its chokehold on the global supply of rare earths and other critical minerals,” Rep. André Carson (D-Ind.) said.
Others are worried China will choose to expand its export controls to another product category for which it has market dominance — pharmaceuticals. Beijing supplies 80 percent of the U.S. supply of active pharmaceutical ingredients — the foundations of common drugs to treat everything from high blood pressure to type 2 diabetes.
“Overnight, China could turn off the spigot and many basic pharmaceuticals, including things like aspirin, go away from the supply chain in the United States,” Rep. Nathaniel Moran (R-Texas) said.
China restarted exports of rare earths earlier this month, and its Commerce Ministry pledged “timely approval” of such exports under a new licensing system, state media reported. Beijing has not indicated its intent to restrict the export of pharmaceuticals or their components as a trade weapon. But the U.S.-China Economic and Security Review Commission urged the Food and Drug Administration to reduce U.S. reliance on Chinese sources of pharmaceuticals in its annual report last month.
The Chinese embassy in Washington didn’t respond to a request for comment.
Growing Chinese military muscle
China’s drive to develop a world-class military that can challenge traditional U.S. dominion of the Indo-Pacific could also derail relations between Washington and Beijing in 2026.
China’s expanding navy— which, at more than 200 warships, is now the world’s largest — is helping Beijing show off its power across the region.
The centerpiece of that effort in 2025 has been the addition of a third aircraft carrier, the Fujian, which entered into service last month. The Fujian is two-thirds the size of the USS Gerald R. Ford carrier. But like the Ford, it boasts state-of-the-art electromagnetic catapults to launch J-35 and J-15T fighter jets.
The Trump administration sees that as a threat.
The U.S. aims to insulate allies and partners in the Indo-Pacific from possible Chinese “sustained successful military aggression” powered by Beijing’s “historic military buildup,” Defense Secretary Pete Hegseth said earlier this month at the Reagan National Defense Forum.
Five lawmakers said they see China’s increasingly aggressive regional military footprint as incompatible with U.S. efforts to maintain a stable relationship with Beijing in the months ahead.
“We know the long-term goal of China is really economic and diplomatic and military domination around the world, and they see the United States as an adversary,” Moran said.
Daniel Desrochers contributed to this report.
Congress
GOP, Democrats blast Vought for holding back cash: ‘You don’t have the authority to impound’
Senators from both parties chided the Trump administration Thursday for continuing to withhold funding Congress has approved, more than a year after the White House first froze billions of dollars for temporary “review.”
During White House budget director Russ Vought’s testimony before the Senate Budget Committee, Sen. Chuck Grassley (R-Iowa) scolded the OMB chief for not sending hundreds of millions of dollars the Trump administration is supposed to give states throughout the year to support community services aimed at reducing poverty.
“Congress has appropriated money, and you don’t have the authority to impound it,” Grassley said about the more than $810 million Congress appropriated this year for the Community Services Block Grant program.
That program helps states fund anti-poverty services such as transportation, education and nutrition assistance that serve more than 9 million people each year.
Grassley told Vought that lawmakers “are not getting any answers” as to why the Trump administration hasn’t sent states their quarterly funding from the program. “I want those quarterly allotments released,” Grassley said.
While Vought did not directly address Grassley’s comments, he said at a different point during the hearing that “we have not impounded a single thing.”
Other senators, including Sen. Mark Warner (D-Va.), lamented federal dollars being withheld for the fund that provides capital to small banks and credit unions in underserved areas. For months lawmakers from both parties have pushed back against Trump’s plans to eliminate that program, the Treasury Department’s Community Development Financial Institutions Fund.
Congress
FISA extension vote delayed
House GOP leaders are pushing back the planned 3:15 p.m. procedural vote related to the bill extending a key spy power due to expire in four days.
Leaders are continuing to negotiate with hard-liners to come up with a deal that can pass the chamber.
No new time has been set for the rule vote.
Congress
Senate Republicans ‘syncing’ immigration funding plan with House GOP
Senate Majority Leader John Thune said Thursday that GOP leaders want to make sure Republicans in both chambers are aligned as they move ahead with a party-line plan for immigration enforcement funding.
The South Dakota Republican told reporters he hopes the Senate will adopt a budget framework “by middle-to-the-end of next week,” the first step to unlocking the filibuster-skirting power to clear a package of up to $75 billion for ICE and Border Patrol.
Then ideally the House would adopt the Senate budget measure without changes, Thune said, allowing Republicans to move on to passage votes on a final bill to fund the immigration enforcement agencies.
“We’re communicating as much as we can, making sure that we’re syncing this up and doing it in the way that meets the requirements that both bodies have,” Thune said Thursday, following a meeting Wednesday with Speaker Mike Johnson for a routine check-in.
The attempt at GOP unity comes after House Republicans hotly rejected the Senate’s proposal last month to fund most of the Department of Homeland Security, where funding lapsed more than two months ago. Now several House GOP lawmakers are also insisting Republicans fund all of the department through the party-line budget reconciliation process — not just the immigration agencies Democrats won’t support without new rules on the Trump administration’s immigration enforcement tactics.
Senate Budget Chair Lindsey Graham (R-S.C.) told reporters Thursday afternoon that he hopes to release text of the budget framework in short order.
“We’re working on all that. Hopefully we’ll find consensus here soon. But I think we’re getting close,” he said.
“I hope we can get moving on it as early as next week,” Graham added.
Senate Republicans have started talking to their chamber’s parliamentarian as they seek to enact the party-line package — one piece of their two-part plan to end the DHS shutdown that began in mid-February.
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