Following Donald Trump’s imposition of punitive tariffs on America’s largest trading partners, Mexico and Canada, which sent the stock market spiraling and instilled fear among allies of potential repercussions, he redirected his focus to his long-time adversary: China.
However, relative to the 25% tariffs placed on goods from his North American neighbors—currently paused for a month—the 10% tariffs on Chinese imports seemed almost moderate.
Analysts have suggested there might be an Elon Musk influence at play. The world’s wealthiest individual and self-proclaimed “first buddy” of Donald Trump has substantial business interests in China.
Or perhaps, this is simply the initial strike.
If history serves as a guide—insofar as it can under the current administration—Trump’s first term provides some clues.
Containers in Nanjing Port, China
During Trump’s previous presidency, while I was reporting from Beijing, the US-China trade war escalated, inflicting economic hardship on consumers and businesses in both nations.
This week, China expressed its desire to avoid another trade war but made it clear it was ready for one, as Beijing quickly rolled out a series of countermeasures aimed at American businesses.
While it may be naive to claim to understand the true sentiments of China’s secretive leadership towards Mr. Trump, there’s reason to suspect they view his assertive foreign policy as a potential opportunity.
Since the end of World War II, the United States has led what is referred to as the “rules-based international order,” where nations adhere to established norms and treaties concerning trade and territorial integrity.
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Nonetheless, Donald Trump has spent much of the last fortnight disregarding the rulebook, potentially granting Beijing an opportunity to reshape it to its advantage. China, for instance, has long aimed to shift the focus from liberal universal values centered on individual freedoms to alternative rights emphasizing development and economic prosperity.
This is undoubtedly a prime moment for Beijing to project calm amidst chaos, appearing, as one diplomat noted, as “the adult in the room”.
Indeed, as China assumed the presidency of the UN Security Council this week, its envoy positioned the nation as a stable presence in turbulent times.
China’s Ambassador to the United Nations Fu Cong
“The world is entering a very turbulent period,” stated China’s UN envoy, Fu Cong, as he took the gavel on Monday, advocating for cooperation between the two largest countries on crucial global issues such as climate change and artificial intelligence.
“There’s no winner in a trade war,” he remarked.
But could China ultimately emerge victorious?
Beyond trade, the abrupt closure of USAID (United States Agency for International Development) by the US government presents China with a prime opportunity to bolster its global development image.
Ambassador Fu affirmed that China would persist with efforts through its Belt and Road Initiative—a global infrastructure investment strategy—to foster “better development” in the Global South, even as Panama announced its withdrawal from the Belt and Road agreement, following pressure from Washington.
“We have scored an own goal,” remarked Prof. Chris Barrett, an economist at Cornell University, in an interview with RTÉ News.
He noted that the issue extends beyond tariffs; it encompasses the cessation of aid, withdrawal from the World Health Organization, and departing from the Paris Climate Agreement.
“The negative impact on goodwill towards the United States resulting from these actions cannot be overstated,” he stated. “We are already engaged in fierce competition with China, and to a lesser extent, Russia, across much of the Global South.”
Barrett predicted that governments, particularly in sub-Saharan Africa, rich in rare minerals essential to the tech sector, would favor agreements with China over the United States.
Protest against the closure of USAID in Washington DC
“Our reputation as a trusted partner has evaporated,” he noted. “We now compete on terms equal to those of China.”
In a similar vein, the US President’s flirtation with territorial expansion—consider Greenland, Panama, Canada, and now seemingly Gaza—could benefit China.
This scenario provides convenient justification for Beijing as it clandestinely establishes settlements within the borders of Bhutan, fortifies its position in disputed territories of the South China Sea, and contemplates the annexation of self-governing Taiwan.
“Trump’s trade posturing and territorial rhetoric will expedite China’s efforts to reshape and bifurcate the global order,” asserted Velina Tchakarova of the FACE geopolitical risk consultancy in Vienna, in her comments to RTÉ News.
This approach is likely to enhance alternative trade agreements like BRICS+, which lie outside US influence, she added.
BRICS+ comprises non-western nations including Brazil, Russia, India, China, and South Africa, established largely as a counterbalance to what its members perceive as excessive American and European dominance in global institutions such as the World Bank and the UN Security Council.
Additionally, this grouping aims to diminish reliance on the US dollar in global markets—something that a US-led trade war is likely to exacerbate.
“[Trump’s] aggressive economic confrontations with the Global South will push more nations toward ‘dedollarisation’,” Ms. Tchakarova stated.
Though the US dollar remains the preeminent global currency, it has seen a reduction in market share in recent years in favor of other national currencies, including the Chinese yuan.
Nevertheless, countries observing Trump’s more aggressive foreign policy should be careful not to mistakenly believe that China represents a more stable alternative, cautioned Isaac Stone Fish, CEO and founder of Strategy Risks, a business intelligence firm.
“A common error that governments and investors make is interpreting Beijing’s statements at face value,” he noted.
“There exists a substantial gap between Chinese propaganda and Beijing’s genuine strategic maneuvers,” he added.
“While Beijing appreciates other nations promoting its interests,” he explained, Beijing evaluates foreign policy through the lens of “what benefits Beijing.”
Donald Trump expressed indifference towards Chinese countermeasures on tariffs.
Like the US under Trump, China has a history of employing aggressive economic coercion, particularly when trading partners refuse to adhere to the Communist Party’s directives.
When, in 2020, then-Australian Prime Minister Scott Morrison called for an independent investigation into the origins of the COVID-19 pandemic—first detected in Wuhan, China, which claimed approximately seven million lives worldwide—the Chinese regime reacted vehemently.
Chinese state media denounced Australia as “gum stuck to the bottom of China’s shoe”.
Substantial tariffs on Australian exports to China—including timber, barley, beef, cotton, wine, and lobster—swiftly followed, prompting Australia to file a complaint with the World Trade Organization, similar to China’s recent actions against Trump’s tariffs.
Years prior, after Liu Xiaobo, a Chinese democracy activist, was awarded the Nobel Peace Prize, China retaliated by freezing economic and diplomatic relations with Norway. Shipments of Norwegian salmon sat rotting in Chinese warehouses as import contracts were canceled.
Restoring those trading relationships required years of diplomatic reconciliation with Beijing.
As Trump’s America seemingly distanced itself from the “rules-based international order”—credited with maintaining global stability over the past eighty years—traditional allies in Europe were left in bewilderment, pondering Washington’s intentions.
“Europe faces a stark choice: either align more closely with the US through deeper economic integration and defense commitments,” Ms. Tchakarova remarked, “or pursue limited geopolitical gains with China, such as reviving the CAI.”
CAI refers to the “comprehensive EU-China investment agreement” initially drafted in 2020 but shelved after China imposed sanctions on Members of the European Parliament—prompted by their criticisms of China’s human rights violations in Xinjiang and Hong Kong.
EU Commission President Ursula von der Leyen has softened her stance towards China.
Beijing has sought to create a diplomatic divide between Brussels and Washington, especially regarding criticisms of China—such as those related to human rights.
With Trump reemerging in power across the ocean, might this be China’s opportunity to mend relations with Europe following a period of estrangement?
“If I were in Brussels, I would keep in mind that there is a way to collaborate with the Trump administration, but this will only last four years,” stated Mr. Stone Fish.
“The ‘muscular authoritarianism’ stemming from the Chinese Communist Party is set to endure far beyond that,” he asserted.
Moreover, China’s ongoing support for Russia in its military campaign against Ukraine will not be easily forgotten by European nations.
Nevertheless, it became evident this week that certain EU leaders have already begun to adopt a more conciliatory tone.
“I believe we can discover agreements that could even enhance our trade and investment relations,” remarked Ursula von der Leyen, President of the European Commission, during a meeting with EU ambassadors.
“It is a delicate balance we must navigate, but it could lead to a fairer and more equitable relationship with one of the world’s economic powerhouses,” she added, “which would benefit Europe.”
This would surely resonate well with Beijing, marking another victory for China just three weeks into Trump’s presidency.
