Trump’s tariffs open doors for Xi to strengthen global alliances

Donald Trump’s decision to impose higher tariffs on nearly every nation has the potential to harm China’s economy.

However, it also provides Xi Jinping with a rare opportunity to forge stronger ties with countries, including key US allies across Asia and beyond, Caliber.Az reports per Bloomberg.

In response to Trump’s announcement on April 3, Chinese officials swiftly sought alignment with other nations after the US imposed its steepest tariffs in a century. Trump accused foreign nations of exploiting the US, claiming it had been “looted, pillaged, raped, and plundered by nations near and far, both friend and foe alike.” This new wave of tariffs, which includes tariffs as high as 24%, affects China as well as long-standing American allies such as Japan, Australia, and the United Kingdom.

During a speech at the London Stock Exchange, Vice Finance Minister Liao Min, one of Xi’s key trade negotiators, championed China’s commitment to deeper market integration, especially with the UK. “Protectionism doesn’t work — it’s not a solution,” Liao said, stressing the mutual understanding between China and the UK of the benefits of globalization, founded on solid cooperation.

Trump’s bold tariff moves could not only spark a global market selloff but also risk alienating the US from the international trade system it helped shape post-World War II. Many countries in Asia have already seen China surpass the US as their largest trading partner, and these tariffs could deepen their reliance on Beijing.

“This represents a golden opportunity for China to outplay the US at its own game,” said Frank Tsai, an adjunct professor at Emlyon Business School in Shanghai.

The situation marks a dramatic shift from the past few years, during which President Joe Biden’s administration worked to isolate China through export controls and security concerns. Trump’s recent actions, coupled with his friendlier stance towards Russia, have left European allies questioning their stance on China.

Prime Minister Shigeru Ishiba of Japan voiced disappointment over the tariffs, while the European Union threatened retaliation, with France warning it might target US tech firms. The Chinese government’s Commerce Ministry expressed concern over the new measures, adding that “many trading partners have expressed strong dissatisfaction.”

Despite the mounting pressure, Xi has exercised caution in his response, wary of escalating tensions further. While Beijing is likely to retaliate, the nature of its response remains uncertain. Retaliatory actions could include targeting major American companies like Apple or limiting the export of critical minerals to the US.

While Xi’s strategy allows China to potentially enhance its international relations, his government must tread carefully as some countries, particularly in Europe and emerging markets, remain sceptical due to China’s territorial ambitions and economic policies.

Ultimately, Trump’s tariffs are set to unite many of China’s trading partners, potentially shifting the global economic balance away from the US.

By Aghakazim Guliyev