China ‘turning Trump’s tariffs to its advantage’ in bid to lead new world order

China sees a window of opportunity to turn the tariffs imposed by US President Donald Trump to its advantage, reshaping global trade in ways that will shield its $19 trillion economy from American pressure for years to come. Beijing is exploiting the uncertainty created by Trump to integrate its massive industrial base into the world's largest economic blocs, including the EU, the Gulf states, and a trans-pacific trade pact, according to a Reuters investigation. This effort involves accelerating negotiations for approximately 20 trade agreements in total, many of which have been pending for years despite widespread concerns about China's overproduction, uneven market access, and sluggish domestic demand. A Reuters review of 100 Chinese-language articles written by state-backed trade experts since 2017 reveals a systematic effort by China's policy advisors to "mechanically reverse" American trade policy and neutralize Washington's containment strategy.

Implementation of China's plan

China is now putting this plan into action. The agreement reached with Canada during Prime Minister Mark Carney's visit to Beijing in January—which drastically reduces tariffs on Chinese electric vehicles—was the first of many aimed at breaking American influence, according to interviews with 10 individuals, including Chinese officials and trade diplomats. "Do not interrupt your opponent when he is making a mistake," commented a Chinese official, referring to Trump's disruptive trade agenda. The review, based on more than 2,000 trade strategy studies approved by the Chinese Academy of Social Sciences and Peking University—institutions that advise the top leadership—shows that policymaking circles widely accept that painful structural changes are a price worth paying for China's long-term dominance in global trade. The content of these studies is being made public here for the first time. If the plan succeeds, Beijing could overturn more than a decade of American trade policy, positioning itself at the center of a new, China-shaped multilateral order, according to two Western diplomats. "The Chinese now have a golden opportunity," said Alicia Garcia Herrero, a senior researcher at the think tank Bruegel. The Chinese Ministry of Commerce did not respond to a request for comment regarding Beijing's strategy. Responding to a question about the Chinese approach, a US official told Reuters it is not surprising that countries with large trade surpluses seek to maintain globalization. "Trump is fixing the problems that globalization caused in the United States, while other countries are trying to intensify globalization as free access to the American market is restricted," he said.

Building blocs

The shift in China's tone reflects its calculations. A year ago, Beijing invoked Mao Zedong and his ability to fend off the West in the Korean War through bellicose rhetoric. Now, as China prepares to host Trump in April, its diplomats are touring the world, calling on trade partners to unite in defense of multilateralism and open trade. In January, China sent its top diplomat to Lesotho—on which Trump had initially imposed a 50% tariff—to promise developmental cooperation. On Saturday, state media reported that China will implement zero tariffs on imports from 53 African countries. Simultaneously, it is promoting AI-powered customs systems in neighboring countries and working to upgrade the digital infrastructure that underpins trade. These moves highlight a goal identified in policy documents: to integrate China so deeply into global trade that its partners cannot decouple under American pressure. "In addressing US strategic competition with China, 'anti-decoupling' must become China's main priority," wrote Ni Feng from the Institute of American Studies of the Chinese Academy of Social Sciences in 2024. Chinese officials are now working to accelerate frozen trade talks. Since 2017, China has been negotiating with countries such as Honduras, Panama, Peru, South Korea, and Switzerland. Foreign Minister Wang Yi surprised European negotiators in November by raising the possibility of a free trade agreement with Brussels. A month later, he pressed the Gulf Cooperation Council to finalize long-standing negotiations for a free trade deal. In January, British Prime Minister Keir Starmer agreed with Xi Jinping to launch a feasibility study for a services trade agreement, while German Chancellor Friedrich Merz stated he would seek "strategic partnerships" with China. Commerce Minister Wang Wentao has prioritized China's accession to the CPTPP, an agreement rooted in the American-inspired Trans-Pacific Partnership before Washington's withdrawal in 2017.

$1.2 trillion surplus

However, China's trade surplus, amounting to $1.2 trillion, complicates the outreach effort. Pascal Lamy, former Director-General of the World Trade Organization, stated that Chinese companies export more goods to Europe than the market can absorb. Stephen Nagy from the Macdonald-Laurier Institute estimated that the Carney-Xi agreement appears to aim at creating bargaining leverage ahead of talks for the USMCA (US-Mexico-Canada Agreement). Mexico, for its part, appears cautious about risking access to the American market through excessive proximity to China. Fred Neumann of HSBC argued that China's trade partners essentially need a revival of Chinese consumption. The restructuring, however, is a long-term undertaking. Trump still has three years left in his term, and the next US administration could return to the strategy of building alliances to contain China. As Zhao Pu from Renmin University and currently a researcher at the Institute of American Studies of the Chinese Academy of Social Sciences wrote in 2023, China must "study in depth the logic of American actions within international institutions and potential next steps, to better respond to increasingly intense strategic attacks in the future."

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