The South China Sea dispute has been structured into a grand geostrategic rivalry between the major powers and as a result almost dominated China–US bilateral relations in recent years, apart from economic and trade disputes. This seems likely to continue under the Trump administration which has taken, from the beginning, a strong stand against Chinese claims in the South China Sea disputes. The tension between the two countries may rapidly escalate if their naval vessels confront each other when US warships continue to sail within 12 nautical miles of the Chinese-held islands and features. The focus of the SCS disputes is no longer the interaction among the various Asian claimants. The SCS issue has been increasingly utilized by powers as a mechanism to exploit one of China’s most serious strategic and diplomatic vulnerabilities. In this context the shape of Sino–US relations will determine the future direction of South China Sea dispute management.