This is actually a good example of why I always thought Trump might prove to be more effective at international relations than what many people would think.
No one, maybe not even Trump himself, can actually tell if he meant to poke China in the eye, or if he honestly didn't realise what he was doing.
I know that traditionally you have minders micromanaging everything, but Trump is known as a control freak, so it is entirely possible he insisted on being kept in on the loop on things most conventional politicians would leave to their handlers to handle, and made the decision himself, and no one on his team had the balls and/or pull to walk him back off the ledge.
That is a theme we had seen time and again during his election campaign, and it has usually worked out for him, so it's only natural to assume he will continue with that habit.
The astute amongst you will see a whole host of problems and dangers with running foreign policy like that, but as the election results shows, it is not without its advantages. The chief of which is that opponents never really know how to best react.
If you over-react, you risk pushing Trump into a corner where his ego makes him feel he has to double down even if he knows he is wrong.
But Trump is also a classic bully. He only respects strength, that is why he is so 'soft' on Putin's Russia.
Problem is that bullies also have an instinctive need to find victims to pick on to reaffirm their 'superiority' to those watching, but mostly himself, and don't know when to back off. If you give them an inch, they will want a yard next time. So if you under-react, you risk making Trump think you are an easy target and try to fleece you for all you have got.
I think Trump will be surprisingly effective with his brand of pure bonkers unpredictability and sheer thuggish shamelessness at bullying small and medium power countries into give unfair concessions.
However, it is when he tries his luck with major league powers like China and Russia that the flip side of his side really stand starkly out.
If he picks on say Mexico, there is a lot of injustice, but little risk, as Mexico simply have no chance to stand up against America. If America under Trump is prepared to throw their self respect and values out the window and go full thug, Mexico will have little choice but to pony up whatever Trump demands.
Problem with trying that stunt with China or Russia is that both can and will stand up for themselves if they are pushed far enough.
So far, China has chosen to give Trump the benefit of the doubt, and lay the full blame for this at the door of Taiwan.
I would expect America to suffer little blow back from this, but I would expect China to make Taiwan pay a price for this, as much to show Trump China is no easy target as to punish Taiwan for orchestrating this stunt.
I would expect China to follow the timeless Chinese strategy of 'killing the chicken to scare the monkey' in response to this.
The aim would be to show Trump that it's unwise to mess with China without risking upsetting his ego, which might make him dig his heels in.
Whether that would be a good strategy, only time will tell.