How U.S. Tariffs Are Driving Countries Toward China
14 April, 2025
As the United States shocked the world on April 2nd with its universal “reciprocal” tariffs, only to place them under a 90-day pause just days later, the future of global trade has never been more uncertain. Whether the US’s proposed tariffs are reinstated or not, global trust in the United States as a trading partner has been significantly shaken. From renewed regional diplomacy in the Pacific to expanded infrastructure collaboration in Southeast Asia and loosening trade restrictions with the European Union, many governments across the world are now turning to China for a more reliable customer base. American tariffs have inadvertently cemented Beijing’s status as an indispensable player in global trade.
Just days before Trump’s tariff announcements, trade ministers from China, Japan, and South Korea met in Seoul to address “emerging challenges” in global trade, their first trilateral economic dialogue in five years. South Korean trade minister Ahn Duk-geun stated “Today’s economic and trade environment is marked by increasing fragmentation of the global economy,” while China’s Wang Liping expressed concerns that “unilateralism and protectionism are spreading,” both alluding to the United States’ increasingly unpredictable trade policies. In a joint statement issued after the meeting, the ministers stated they hope to accelerate negotiations for a “free, fair, comprehensive, and mutually beneficial” trilateral free trade agreement. Although the United States was not mentioned explicitly, the statement continues, “we support the rules-based, open, inclusive, transparent, non-discriminatory multilateral trading system”. The significance of this announcement is clear: Japan and South Korea, both historic American allies, are skeptical of the US as a trading partner and are “hedging their bets” with the possibility of a Chinese free trade agreement.
Further South, some ASEAN member states are also feeling the need to strengthen their Chinese ties, which Beijing appears more than willing to accommodate. In the coming week, President Xi Jinping is set to visit Vietnam, Malaysia and Cambodia, three of the countries that have been worst hit by Trump’s proposed tariffs. Vietnam’s exports to the United States account for approximately 30% of its GDP. But now, despite their historic tensions, Vietnam seems eager to bolster its relationship with China to diversify its trading alliances. Earlier this year, Vietnam’s National Assembly approved the utilization of $8.3 billion in Chinese loans for a new railway project aimed at improving the country’s transport connections with China. Furthermore, according to Vietnamese officials, China and Vietnam are expected to sign over 40 agreements on Monday, largely focusing on their trade relationship. Similarly, according to an invitation from Cambodia’s monarch, Xi’s visit to the country is set to address “international issues of common interest” and “strengthening bilateral ties.” ASEAN nations with export-oriented economies have been rattled by the United States’ recent actions and have no choice but to explore how to mitigate lost exports to the United States via increased trade with other countries.
Likewise, the European Union appears increasingly interested in a more open trade relationship with the PRC. On April 8th, China’s Commerce Minister Wang Wentao met with his European counterpart, Maros Sefcovic, to discuss the loosening of their trade restrictions. Interestingly, the EU now seems more open to importing Chinese electric vehicles, an industry which has long been a point of contention in the EU-China trade relationship. In October 2024, Chinese EV manufacturers like BYD, Geely, and SAIC faced European tariffs of up to 45%. However, in the aftermath of Trump’s “liberation day”, Sefcovic has expressed openness to lifting such tariffs entirely in exchange for minimum price commitments. In response, China appears optimistic about its strengthening relations with Europe. On a call with European Commission President Ursula von der Leyen, the Chinese Premier argued that China has ample policy tools to “fully offset” any impacts felt by Europe following American tariff threats, further stating, “Protectionism leads nowhere – openness and cooperation are the right path for all.”
While Washington’s tariff threats may have aimed to reassert America’s grip on global trade, they will likely have the opposite effect. As of the writing of this article, the US has implemented universal tariffs of ten percent on all its trading partners – except China, which now faces duties of up to 145 percent. But, rather than isolating China, these measures are prompting countries worldwide to recalibrate their economic strategies and pursue closer trading relationships with Beijing.
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