President Donald Trump unleashes a new wave of tariffs and touts his renewed focus on America’s military alliances in Asia, the expectation might be that China—America’s primary strategic competitor—is on the defensive. But behind closed doors in Beijing, the sentiment is far from anxious.
Instead, Trump’s return to his “Make America Great Again” (MAGA) agenda is inadvertently giving China a rare geopolitical and economic opening—one that President Xi Jinping appears both prepared for and eager to exploit.
Tariffs That Hurt—But Also Help
Trump’s latest executive action imposes a steep 34% tariff on Chinese imports, bringing the total burden to 65% when existing duties are included. The removal of exemptions for small packages adds to the sting. For an export-driven economy like China—where outbound trade still accounts for roughly 20% of GDP—this is a significant blow.
Yet in Beijing, officials view the pressure as a double-edged sword. Trump’s aggressive tactics are forcing overdue reforms: encouraging China to reorient toward domestic consumption, reduce overcapacity, and recalibrate its industrial policies. At the same time, U.S. protectionism is helping China cast itself as a more stable and cooperative partner—especially in the Global South.
Reform by Necessity
After years of economic missteps—including a housing market collapse, demographic decline, and state interference that stifled the private sector—Xi’s government has begun to recalibrate. A modest rebound in real estate, rising consumer spending, and bond-financed stimulus measures have brought a degree of momentum back to the economy.
More telling is China’s technological resilience. In sectors like electric vehicles, aerospace drones, and AI, Chinese firms are not just surviving—they are outpacing their Western peers. Companies like DeepSeek are seen as harbingers of a new wave of domestic innovation, designed to work around Western export controls.
Despite enduring U.S. sanctions, China has pushed forward on currency diversification, conducting more international transactions in yuan and reducing reliance on the U.S. dollar. With a 15% rise in the MSCI China Index this year, global investors are slowly regaining confidence.
America in Retreat
Trump’s combative posture toward allies, his skepticism of NATO, and wavering support for Ukraine have rattled traditional partnerships. In Asia, doubts are rising about America’s long-term commitment to defending Taiwan—especially if it no longer needs Taiwan’s semiconductor production.
Meanwhile, the administration’s anti-China rhetoric contrasts sharply with quiet overtures toward Beijing. Senator Steve Daines, a Trump ally, recently visited China to test the waters for potential negotiations—raising questions about whether Trump’s strategy is conflict or compromise.
Some Chinese analysts see this ambiguity as a gift. Trump’s isolationist and transactional foreign policy is creating a leadership vacuum—one that China may be uniquely positioned to fill, especially in climate diplomacy and technology investment.
Risks Remain
This is not without peril. An escalated trade war could tip the global economy into recession. Should talks between Washington and Beijing collapse, further sanctions or currency tensions could ignite. China, too, risks backlash if it floods global markets with excess production—a tactic that may undermine its reputation as a responsible global power.
Yet in the paradox of Trump’s nationalism lies Xi’s opportunity. America’s internal polarisation and retreat from global leadership have validated Beijing’s long-standing narrative: that the West is declining, and the future belongs to a more centralized, state-driven model.
The irony is stark. As Trump tries to make America great again, he may be accelerating China’s rise instead.
