China sees an opportunity to turn President Donald Trump's tariffs to its advantage by reshaping global trade in a way that would insulate its $19 trillion economy from U.S. pressure for the distant future, Reuters reports.
Beijing is using the uncertainty created by Trump to try to weave China's vast manufacturing base into the world's largest economic blocs, such as the European Union, the Gulf states and the Trans-Pacific Partnership. This includes accelerating efforts to conclude a total of about 20 trade deals that have been in the works for many years, despite concerns about China’s overproduction, uneven market access and weak domestic demand.
A Reuters review of 100 Chinese-language articles by state-backed trade scholars written since 2017 reveals systematic pressure from China’s policy advisers to reverse U.S. trade policy and neutralize Washington’s containment strategy.
China is now putting this plan into practice. The deal reached with Canada during Prime Minister Mark Carney’s visit to Beijing in January, which reduced tariffs on Chinese electric vehicles, was the first of many aimed at chipping away at U.S. influence, according to interviews with 10 people, including Chinese officials and trade diplomats.
“Don’t interrupt your opponent when he makes a mistake,” one Chinese official said of Trump’s disruptive trade agenda.
The review, based on more than 2,000 trade strategy documents approved by the Chinese Academy of Social Sciences (CASS) and Peking University, which advise top leaders, shows that policy experts generally agree that painful structural change is a price worth paying for China’s long-term dominance in global trade.
If successful, Beijing could overturn more than a decade of U.S. trade policy by placing itself at the center of a new multilateral order shaped by China. two Western diplomats said.
"The Chinese now have a golden opportunity," said Alicia Garcia Herrero, a senior fellow at the Bruegel think tank.
When asked about China's approach, a U.S. official said it was no surprise that countries with large trade surpluses were seeking to maintain globalization.
"President Trump is addressing the problems caused by U.S. globalization, while other countries are trying to redouble their efforts on globalization as free access to the U.S. market is disappearing," the official said.
Building alliances
China's shift in tone reflects its calculations. A year ago, Beijing invoked Mao Zedong and his ability to fend off the West in the Korean War with war propaganda.
Now, as China prepares to welcome Trump in April, its diplomats are touring the world, urging trading partners to join him in defending multilateralism and open trade.
In January, China sent its top diplomat to Lesotho — a country on which Trump initially imposed a 50% tariff — to pledge development cooperation. On Saturday, state media reported that China would impose zero tariffs on imports from 53 African countries. Meanwhile, Beijing is offering its neighbors AI-powered customs systems and working to retool the digital infrastructure that underpins trade.
These moves underscore a goal set out in policy documents: to embed China so deeply in global trade that partners cannot afford to disengage from it under pressure from the United States.
"In countering the United States' strategic competition with China, "anti-separation" should become China's main focus," Ni Feng, a fellow at the Institute for American Studies at CASS, wrote in 2024.
Chinese authorities are working to accelerate stalled trade talks. Since 2017, China has been negotiating with several countries, including Honduras, Panama, Peru, South Korea and Switzerland.
"We are ready to negotiate bilateral and regional trade and investment agreements with interested countries and regions," said Commerce Ministry spokesman He Yongqiang during Carney's visit, without giving further details.
In November, Chinese Foreign Minister Wang Yi surprised European negotiators by raising the issue of a free trade agreement with Brussels during talks with his Estonian counterpart.
A month later, Wang urged the Gulf Cooperation Council to conclude long-running negotiations for a free trade agreement. In January, British Prime Minister Keir Starmer agreed with Chinese leader Xi Jinping to launch a feasibility study on a trade agreement in services that could lower barriers for British companies. German Chancellor Friedrich Merz said he would seek "strategic partnerships" with China during a visit next week.
Chinese Commerce Minister Wang Wentao has made joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) a priority. The pact is a successor to the US-backed Trans-Pacific Partnership, which was designed in part to counter China before Washington withdrew in 2017.
China's huge trade surplus complicates the situation, however. Some member states worry that Chinese producers could use improved market access to divert excess cheap goods abroad while domestic demand in China remains weak.
Wendy Cutler, the Obama administration's chief negotiator for the Trans-Pacific Partnership, acknowledged the potential for Beijing to advocate for trade and multilateralism but said China must go beyond talks.
"With their huge trade imbalances, as well as some of the coercive measures they are now taking against countries like Japan, it's hard to see how they are dealing with the situation," Cutler said.
A senior European trade diplomat dismissed Beijing's proposals as "pure Chinese propaganda" and stressed that Brussels has no plans for a trade deal.
Chinese advisers are not discouraged. One noted that the EU and China had negotiated a landmark investment deal for 2020 during Trump’s first term. However, the deal was frozen in 2021 before it could take effect amid a dispute over human rights sanctions.
Lessons Learned
Some Chinese advisers argue in the documents that Beijing should examine how Washington has "weaponized" global institutions to contain China, and seize the opportunities created by Trump’s willingness to abandon or dismantle multilateral organizations like the World Trade Organization.
Others argue that Beijing should focus on influencing global standards in areas such as intellectual property through initiatives like the "Belt and Road" Xi Jinping and China's membership in the Regional Comprehensive Economic Partnership, which accounts for about 30% of global GDP.
China is now implementing these insights.
Its recently renewed deal with Southeast Asian countries, for example, focuses on artificial intelligence-based trade and digital commerce, where China hopes to gain an advantage. Indeed, the Asian country's vision for customs processing is evident in its "Port of Friendship" on the Vietnamese border, where state media claims that local AI solutions have reduced waiting times by 20%, enabling faster deliveries.
A trillion-dollar surplus
However, the risks that China’s $1.2 trillion trade surplus poses to the manufacturing sectors of its trading partners are hard to ignore.
Pascal Lamy, a former WTO director-general and EU trade commissioner, said Chinese companies were shipping more goods to Europe than the bloc could handle.
"It is a mystery how, given the nature of the regime, given their collective ingenuity, how they have failed to rebalance their economic model?", he asked.
Not everyone sees closer ties with China as the easiest way to reduce dependence on United States.
Stephen Nagy, director of the China Project at the Macdonald-Laurier Institute in Ottawa, said Carney's tariff reduction deal with Xi appeared to be designed to build financial leverage ahead of negotiations on the United States-Mexico-Canada Agreement (USMCA).
"I think his bet is wrong," he added, predicting that Trump will not be swayed.
Carney said Canada is honoring its commitment under the United States-Mexico-Canada Agreement (USMCA) not to pursue free trade agreements with non-market economies.
Mexico, for its part, is concerned about jeopardizing U.S. market access by getting too close to China.
"We don't see a need for a free trade agreement with China right now," a Mexican trade official said. "We are already in the CPTPP and cover 60% of global GDP".
Beijing’s trading partners really need China to revive its consumption, said Fred Neumann, chief economist for Asia-Pacific at HSBC. China’s commerce minister said growing imports was a priority as Beijing prepares to launch its next five-year plan in March, in line with a pledge to increase the share of consumption in GDP.
But rebalancing is a long-term project. Trump has three more years in office, and the next administration could return to building coalitions to contain China.
China needs to "deeply examine the logic of U.S. actions within international institutions and possible next steps it can take to better respond to increasingly fierce strategic offensives in the future," Zhao Pu, then at Renmin University and now a fellow at the Institute for American Studies at CASS, wrote in 2023.