US and allied responses to China’s military rise through trade, tariffs, and alliances

The strategic competition between the United States, its allies, and China continues to intensify in 2026, with recent developments underscoring a deepening and more multifaceted U.S.-led response to China’s accelerating military modernization. Building on the comprehensive multi-domain approach established over recent years, Washington and its partners have taken significant steps to bolster deterrence, enhance alliance cohesion, and maintain technological superiority, particularly in the Indo-Pacific theater where China’s assertiveness around Taiwan remains a focal point of regional and global concern.

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China’s Expanded Military Modernization: Demonstrating Multi-Domain Power and Strategic Signaling

Throughout late 2025 and into early 2026, the People’s Liberation Army (PLA) has intensified its military readiness with a series of expanded joint live-fire exercises encircling Taiwan, which have showcased notable advancements:

• Deployment and testing of advanced precision strike platforms, including newly operational hypersonic glide vehicles and extended-range ballistic missiles, have enhanced China’s ability to conduct rapid, accurate strikes across the region, complicating U.S. and allied defense planning.

• Complex carrier strike group simulations combined with layered Anti-Access/Area Denial (A2/AD) tactics highlight the PLA Navy’s growing capacity for maritime blockade, power projection, and rapid reaction in contested waters.

• The exercises have featured sophisticated multi-domain integration, with air, naval, missile, cyber, and electronic warfare units operating under a unified command and control framework, reflecting a leap forward in joint operational coordination.

These drills serve a dual strategic purpose: they reinforce deterrence against external military intervention in a Taiwan contingency and progressively normalize PLA operations in previously restricted maritime zones, effectively shifting operational norms in the Indo-Pacific. Experts warn this evolution increases the strategic costs for U.S. and allied forces considering intervention and tests the resilience of surveillance and intelligence networks.

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U.S. and Allied Responses: Deepening Defense Cooperation and Collective Deterrence

In direct response to China’s military advancements, the U.S. and its partners have substantially expanded defense cooperation, focusing on capability enhancement, alliance strengthening, and joint readiness:

• Taiwan’s defensive posture has been significantly upgraded with the deployment of Patriot PAC-3 missile interceptors and advanced coastal surveillance radars, complemented by intensified U.S. military advisory support emphasizing asymmetric warfare tactics and rapid counterstrike capabilities.

• The U.S.-South Korea strategic dialogue has broadened to address highly sensitive issues such as the potential deployment of nuclear-powered submarines and fuel cycle management, signaling a willingness to pursue more ambitious security arrangements to counter both China’s maritime ambitions and North Korean provocations.

• Multilateral military exercises have increased in scale and complexity, involving the U.S., Japan, Australia, India, and Southeast Asian partners. These drills focus on maritime domain awareness, anti-submarine warfare, cyber defense, and rapid joint deployment, solidifying an increasingly cohesive Indo-Pacific security framework. India’s enhanced role expands the traditional U.S.-Japan-Australia trilateral into a strategic quadrilateral nexus, adding significant depth and regional legitimacy.

• Reflecting the global nature of the challenge, NATO has issued explicit declarations reaffirming support for the “rules-based international order” and condemning coercive tactics by authoritarian regimes. Recent NATO summits have prioritized closer ties with Indo-Pacific allies, effectively bridging Euro-Atlantic and Indo-Pacific security concerns.

• Further emphasizing allied capacity-building, the U.S. State Department approved several key Foreign Military Sales (FMS) in early 2026:

  • The sale of three P-8A Poseidon maritime patrol aircraft to Denmark enhances NATO’s maritime surveillance and anti-submarine warfare capabilities.
  • Expanded training and logistics support packages for Poland aim to strengthen transatlantic interoperability and readiness amid a deteriorating global security environment.

These efforts collectively reinforce a robust, interoperable deterrence posture that complicates China’s strategic calculus while signaling unwavering collective defense commitments.

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Economic and Legislative Measures: Tightening the Technological Chokehold

Economic tools and regulatory frameworks remain critical pillars of the U.S. and allied strategy to constrain China’s military modernization by restricting access to advanced technologies:

• Section 301 semiconductor export restrictions continue to be rigorously enforced and regularly updated to close loopholes, systematically blocking Chinese access to cutting-edge chip design and fabrication technologies essential for next-generation weapons systems.

• Steel tariffs remain in place to prevent subsidized Chinese steel from undermining U.S. and allied defense industrial bases, indirectly slowing China’s ability to expand its military-industrial complex.

• The December 2025 ITAR exemption final rulemaking introduced stricter enforcement provisions, including personal accountability for corporate officers violating export controls. This signals a tougher compliance environment across the defense industrial sector.

• Executive Order 14369, “Ensuring American Space Superiority,” continues to drive investments in space domain awareness, counterspace capabilities, and resilient satellite architectures, directly countering China’s rapid expansion of counterspace technologies.

• The Final AUKUS Rule—also finalized in December 2025—streamlines defense technology sharing among Australia, the United Kingdom, and the United States, facilitating rapid collaboration while maintaining stringent controls to prevent unauthorized technology transfers to China or other adversaries.

Together, these multilayered economic and legal measures form a critical barrier preserving U.S. and allied technological primacy in key military domains.

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Strategic Guidance and Force Posture: Embracing Innovation and Multi-Domain Operations

The 2025 National Security Strategy (NSS) and National Defense Strategy (NDS) continue to guide U.S. efforts with an adaptive, forward-looking blueprint to meet the challenges posed by China’s expanding military capabilities:

• A pronounced focus on multi-domain operations integrates land, sea, air, space, and cyber capabilities into seamless, synchronized deterrent postures designed to outmatch China’s operational sophistication.

• Ongoing defense acquisition reforms aim to accelerate the development and deployment of emerging technologies such as hypersonics, artificial intelligence (AI), and autonomous systems, ensuring a qualitative edge across the battlefield.

• Increased budget prioritization for space superiority and cyber resilience programs acknowledges these arenas as critical battlegrounds for future conflicts and influence.

• Initiatives to enhance industrial base resilience and secure supply chains address vulnerabilities revealed by global disruptions and China’s strategic control over rare earth elements and other critical materials.

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Emerging Technology Trends: The Drone “Wingman” Race and Force Structure Evolution

A defining feature of 2026 has been the accelerated integration of unmanned systems into frontline force structures:

• The U.S. Air Force, along with allied air services, has fast-tracked the development and testing of drone “wingman” systems—autonomous or semi-autonomous unmanned aircraft that fly alongside manned fighters, extending sensor coverage and firepower while reducing risk to pilots.

• This “wingman” race is reshaping force composition and deterrence calculations, offering unparalleled operational flexibility and complicating adversary targeting strategies.

• The proliferation of these systems exemplifies a broader shift toward automation and AI-enabled operations, which are vital for maintaining battlefield dominance in highly contested environments.

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Current Status and Outlook: Integrated Deterrence with a Focus on Stability

As of mid-2026, the United States and its allies continue to execute a comprehensive, integrated strategy designed to deter Chinese coercion while preventing escalation into direct conflict:

• Expanded defense cooperation mechanisms—including new arms sales, joint exercises, and strategic dialogues—strengthen interoperability and alliance cohesion.

• Dynamic export controls and economic restrictions are regularly refined to adapt to evolving threats and evasion tactics, balancing strategic pressure with protection of critical supply chains.

• Innovation in space, cyber, hypersonics, and autonomous systems remains central to maintaining technological and operational superiority.

• The overarching U.S.-led posture emphasizes freedom of navigation, respect for international norms, and calibrated deterrence aimed at preserving peace and stability in the Indo-Pacific region.

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Why This Matters: The Indo-Pacific as the Global Strategic Nexus

The Indo-Pacific remains the epicenter of global strategic competition and economic vitality:

• The region encompasses more than half the world’s population and the majority of global trade flows, making its stability essential for worldwide prosperity.

• China’s expansive territorial claims in the South China Sea and assertive military posturing near Taiwan directly challenge international law and freedom of navigation, threatening the existing regional security architecture.

• Control over cutting-edge technologies—semiconductors, space-based platforms, and AI-enabled military systems—will shape the future balance of power and influence.

• The expanding network of alliances and partnerships enhances strategic depth, raising the costs for Beijing of pursuing coercive or aggressive actions and reinforcing a collective commitment to uphold the rules-based international order.

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In conclusion, the evolving strategic landscape requires sustained vigilance, adaptability, and coordinated action. Through a comprehensive blend of military readiness, alliance strengthening, economic policy enforcement, and technological safeguarding, the United States and its partners aim not only to counter China’s military rise but also to foster a region characterized by stability, adherence to international norms, and shared prosperity. The coming years will be critical in determining whether this integrated deterrence approach can maintain peace and prevent conflict in one of the world’s most consequential theaters.