China sees an opening to turn US President Donald Trump’s tariffs to its advantage by reshaping global trade in ways that would insulate its US$19 trillion economy from US pressure far into the future.
Beijing is exploiting the uncertainty created by Trump to try to stitch China’s vast manufacturing base into the world’s biggest economic blocs, including the EU, Gulf states and a trans-Pacific trade pact, a Reuters examination found.
The push involves accelerating efforts to clinch about 20 trade deals, many years in the making, despite widespread concerns about China’s overproduction, uneven market access and soft domestic demand.
Illustration: Mountain People
A Reuters review of 100 Chinese-language articles by state-backed trade academics written since 2017 reveals a systematic push by China’s policy advisers to reverse-engineer US trade policy and neutralize Washington’s containment strategy. China is putting that blueprint into action. The deal reached with Ottawa during Canadian Prime Minister Mark Carney’s visit to Beijing last month — which slashes tariffs on Chinese electric vehicles — was the first of many aimed at breaking US leverage, according to interviews with 10 people, including Chinese officials and trade diplomats.
“Don’t interrupt your opponent when he is making a mistake,” one Chinese official said of Trump’s disruptive trade agenda.
The review, drawn from more than 2,000 trade-strategy papers endorsed by the Chinese Academy of Social Sciences (CASS) and Peking University, which advise top leaders, shows policy insiders broadly accept that painful structural change is a price worth paying for China’s long-term dominance of global commerce.
The papers’ contents are reported here for the first time.
If successful, Beijing could upend more than a decade of US trade policy by placing itself at the heart of a new, China-shaped multilateral order, two Western diplomats said.
“The Chinese have a golden opportunity now,” Bruegel senior fellow Alicia Garcia Herrero said.
The Chinese Ministry of Commerce did not respond to a request for comment about Beijing’s strategy.
Asked about China’s approach, a US official told Reuters it was no surprise that countries with large trade surpluses sought to maintain globalization.
“President Trump is fixing the problems globalization caused for the United States while other countries are trying to double down on globalization as free market access to the United States goes away,” the official said.
The shift in China’s tone reflects its calculations. A year ago, Beijing was invoking Mao Zedong (毛澤東) and its ability to fend off the West in the Korean War with martial propaganda.
As China prepares to welcome Trump in April, its diplomats are touring the world urging trading partners to join it in defending multilateralism and open trade. Last month, China dispatched its top diplomat to tiny Lesotho — which Trump initially hit with a 50 percent tariff — to pledge development cooperation.
Chinese state media on Feb. 14 said Beijing would implement zero tariffs on imports from 53 African countries. Meanwhile, China is pitching artificial intelligence (AI)-powered customs systems to neighbors and working to retool digital infrastructure that underpin commerce.
The moves underline a goal identified in the policy papers: To embed China so deeply in global trade that partners cannot afford to decouple under US pressure.
“In countering US strategic competition with China, ‘anti-decoupling’ should become China’s primary focus,” Ni Feng (倪峰), fellow at CASS’s Institute of American Studies, wrote in 2024.
Chinese officials are now working to fast-track stalled trade talks. Since 2017, China has been negotiating with countries including Honduras, Panama, Peru, South Korea and Switzerland.
“We are willing to negotiate bilateral and regional trade and investment agreements with interested countries and regions,” Chinese Ministry of Commerce spokeswoman He Yongqian (何永謙)told Reuters during Carney’s visit, without elaborating.
Chinese Minister of Foreign Affairs Wang Yi (王毅) surprised European negotiators in November last year by raising the prospect of a free-trade agreement with Brussels during talks with his Estonian counterpart. A month later, Wang pressed the Gulf Cooperation Council to conclude long-running talks on a free-trade agreement. Last month, British Prime Minister Keir Starmer agreed with Chinese President Xi Jinping (習近平) to launch a feasibility study into a trade-in-services agreement that could reduce barriers for British firms. German Chancellor Friedrich Merz has said he would seek “strategic partnerships” with China during a trip this week.
Chinese Minister of Commerce Wang Wentao (王文濤) has made joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) a priority. The pact has its roots in the US-backed Trans-Pacific Partnership, developed in part to counter China before Washington withdrew in 2017.
However, China’s huge trade surplus complicates the pitch. Some member countries worry Chinese manufacturers might use improved market access to funnel excess low-cost goods abroad, while China’s domestic demand remains sluggish.
Wendy Cutler, chief negotiator during the administration of former US president Barack Obama for the Trans-Pacific Partnership, acknowledged the window for Beijing to champion trade and multilateralism, but said China needed to go beyond talk.
“And with its huge trade imbalances, as well as some of the coercive measures it’s now taking against countries like Japan, it’s hard to see how they’re walking the walk,” Cutler said.
A senior European trade diplomat dismissed Beijing’s overtures as “pure Chinese propaganda,” saying Brussels had no plans for a trade deal.
Chinese advisers are undeterred. One said the EU and China had negotiated a landmark 2020 investment deal during Trump’s first term.
However, the deal was frozen in 2021 before it could take effect amid a dispute over human rights sanctions.
Some Chinese advisers contend in the papers that Beijing should study how Washington has “weaponized” global institutions to contain China, and exploit openings created by Trump’s willingness to abandon or sideline multilateral bodies such as the WTO.
Others argue Beijing should focus on influencing global standards in fields such as intellectual property through initiatives such as Xi’s Belt and Road Initiative and China’s membership of the Regional Comprehensive Economic Partnership, which covers about 30 percent of global GDP.
China is applying those insights. For example, its recently upgraded deal with Southeast Asian states focuses on AI-driven and digital trade, where China hopes to secure a first-mover advantage.
Indeed, Beijing’s vision for customs processing is evident at its “Friendship Port” on the Vietnamese border, where Chinese state media says home-grown AI solutions have slashed waiting times by 20 percent, enabling faster deliveries.
Reuters could not independently verify the claim.
However, the risks that China’s US$1.2 trillion trade surplus poses to trading partners’ manufacturing sectors are hard to overlook. Former WTO director-general and former European commissioner for trade Pascal Lamy said Chinese firms are sending more goods to Europe than the bloc can absorb.
“It’s a mystery how, given the nature of the regime, given the sort of collective cleverness, how is it that they have not succeeded in rebalancing their economic model?” he asked.
Not everyone sees closer ties with China as the easiest way to curb reliance on the US.
Stephen Nagy, China project lead at the Macdonald-Laurier Institute in Ottawa, said Carney’s tariff-cutting agreement with Xi appears designed to build leverage before talks over the US-Mexico-Canada (USMCA) trade deal.
“I think his bet is wrong,” he added, predicting that Trump would not be swayed.
Carney has said Canada respects its USMCA commitment not to pursue free-trade deals with non-market economies.
His office did not respond to a request for comment.
Mexico, for its part, is wary of endangering US market access by moving too close to China.
“We see no need for a free-trade agreement with China right now,” a Mexican trade official said. “We are already in the CPTPP and have 60 percent of world GDP covered.”
Beijing’s trade partners really need China to revive its consumption, said Fred Neumann, chief economist for Asia Pacific at HSBC.
Wang Wentao has said growing imports is a priority as Beijing prepares to launch its next five-year plan next month, in line with a commitment to raise consumption’s share of GDP.
However, rebalancing is a long-term project. Trump has three years left in office, and the next US administration could revert to building coalitions to contain China.
China must “study in depth the logic of US actions within international institutions and the possible next steps it may take to better respond to increasingly fierce strategic offensives in the future,” Zhao Pu, a researcher at CASS’s Institute of American Studies, wrote in 2023.
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