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Trump has kick-started America’s downfall – and handed the world to China.
Beijing will suffer in a trade war, but it can benefit from Washington’s acts of self-harm.
Donald Trump’s tariff spree hands China an opportunity to challenge the US for global leadership, analysts believe, with Beijing’s retaliatory measures already posing a threat to America’s military supremacy.
Beijing followed up its pledge to “fight to the end” against Trump’s economic warfare by matching a 50 per cent rise in tariffs yesterday, and blacklisting several American companies – before the US President increased the rate to 125 per cent against China while announcing a 90-day pause on higher-rate tariffs against other countries last night.
China has combined a tough stance against Washington with moves to forge partnerships with other countries, including the European Union, which paused move for retaliatory tariffs after Trump’s announcement yesterday.
President Xi Jinping has said “China’s door will only open wider” in response to the tariffs, while Beijing has positioned itself as an upholder of global trade norms, railing against what it called US “unilateralism, protectionism, and economic bullying”.
Beijing is playing the long game
China will suffer in a showdown against the US, but it will reap the benefits from the damage Washington inflicts upon its own international standing, suggests Dr Steve Tsang, head of the China Institute at The School of Oriental and African Studies.
“China will pay a heavy economic price, potentially at least as damaging as the US,” he said. “But on balance, the Chinese will come out the winner.”
Many projections that China would imminently overtake the US as the world’s top economy have been revised due to weak growth in China, Dr Tsang notes. The picture could change again due to tariffs that are wreaking havoc in the US, Chinese, and global economies, he believes.
But Beijing’s primary ambition is political rather than economic, to transform the existing US-led international order “into something that is Sino-centric”, said Dr Tsang. “Now that Donald Trump is attacking the liberal international order and alienating his allies it is making it easier for the Chinese to push their case.”
The Chinese regime envisages itself supplanting Western democracies as head of a new order leading the countries of the so-called Global South through trade deals and developmental assistance – such as its “Belt and Road” initiative that covers more than 100 countries – with partners offering support for Beijing at the UN, says Dr Tsang.
Defending the global economic order
Dr Rex Li, a specialist in Chinese foreign policy at King’s College London, believes China is using the upheaval of Trump’s tariffs to position itself as a “status quo power…like the benign hegemon the US presented itself as”, seeking to change Western perceptions it is intent on revolution.
Beijing is now “defending the liberal economic order, free trade, and global economic stability”, said Dr Li, and presenting itself as a victim of US trade policies along with every other country hit by tariffs.
China has raised multiple complaints with the World Trade Organisation accusing the US of violating trade rules and risking destabilisation of the world economy.
Xi’s administration is fighting back strongly partly in the hope that other countries will follow its example, Dr Li added – although such hopes could be undercut by the easing of tariffs on other countries.
Beijing’s criticisms of the US are intended for a broad global audience, suggests Yun Sun, director of the China programme at the Stimson Centre think-tank.
“China sees this as a good opportunity to rally global public opinions and national policies of different states in a direction away from US- dominated global order,” she said. “China engages countries whose interests were damaged by the US tariff to amplify the collective opposition to Washington and isolate the US.”
Beijing’s moment to target Europe
But it is particularly aimed at Europe, she added, where faith in US leadership could have been eroded by successive shocks under the Trump administration even before the tariffs, from cutting US aid to Ukraine to openly criticising and insulting European governments.
Such efforts may be paying dividends, with the Spanish government reportedly among advocates for the EU to forge a new relationship with China independent of the US. Beijing is targeting the bloc as an alternative market for its manufacturing exports.
China has measures to protect itself from the fallout of a potentially devastating trade war, analysts say, although its economy could suffer from greater reliance on imports than the US.
The ruling Communist Party can offer subsidies to protect affected industries and consumers, and it will not have to face elections or media criticism that could undermine Trump’s agenda in the US.
America is undermining its own military power
Beijing has also revealed some of the tools at its disposal to inflict harm on its rival, as with export controls on rare minerals that play a key role in US defence and communication industries.
According to William Matthews, senior research fellow at the Chatham House Asia-Pacific programme: “The rare earth restrictions carry real potential for China to damage Washington’s wider ambitions of maintaining a technological and military lead over Beijing. China dominates rare earth supply chains and has a monopoly on processing. These elements are crucial for technology supply chains, including those for advanced US weapon systems, as well as the production of essential components such as magnets.
“By restricting their flow to the US, China could severely hamper other objectives of the Trump administration, including enhanced focus on deterring China militarily in the Pacific, reshoring supply chains for critical technologies, and rebuilding domestic manufacturing. This will be exacerbated by the Trump administration increasingly alienating the partners it needs to succeed in long-term competition with China.”
The US could also be sacrificing a military edge by weakening its alliances, suggests Dr Tsang, which could encourage Chinese to make aggressive moves such as acting on its long-standing ambition to seize the island of Taiwan.
US deterrence relies on the willingness of countries that are major trading partners of China – such as Japan, South Korea, Australia, and the EU – to cut ties in the event of an invasion, he said.
“But with Trump 2.0 and the trade war, the US is in no position to mobilise a coalition of the willing – there is not a half a chance in hell for that to happen,” said Dr Tsang. “And most importantly, the Chinese will not believe such an alliance can be forged.”
China has also been steadily closing the gap in air power, military analysts believe, having launched surprise test flights of its new “sixth generation” warplanes in January, before Trump announced a contract with Boeing last month for what he called the “most advanced, most capable, most lethal aircraft ever built”.