Are Trump’s tariffs a gift to China?

Donald Trump has returned to the White House with a renewed commitment to economic confrontation, but his aggressive tariff policies risk backfiring, handing strategic advantages to Beijing.

His sweeping trade measures include a 25% tariff on imports from Mexico and Canada, a 10% duty on Canadian energy exports, and an expanded set of restrictions on Chinese goods.

Now, with new threats aimed at the European Union, global markets are rattled. While Trump sees these moves as a demonstration of economic strength, they could instead accelerate China’s influence.

Take Colombia, for example. President Gustavo Petro recently criticised Washington’s handling of deported migrants, and within days, the Trump administration retaliated with fresh tariffs on Colombian goods, banking sanctions, and travel bans on government officials. This abrupt punishment raises concerns about America’s reliability as a trade partner.

If even traditionally aligned nations can be hit with sudden economic penalties, others will take precautions. Countries that have historically depended on US trade may now look to hedge their bets, and China is waiting in the wings.

Belt and Road

Beijing has spent years positioning itself as an alternative to Washington’s economic dominance, expanding its Belt and Road Initiative across Latin America, Africa, and Southeast Asia. By offering large-scale infrastructure investments with fewer political strings attached, China has cultivated partnerships that Trump’s tariff escalations may only deepen.

This shift extends beyond trade. Historically, the US has been seen as a predictable and stable partner, even when presidential administrations changed. Now, with Trump doubling down on unilateral economic moves, that perception is fading. Countries that once relied on America’s commitment to long-term agreements may start exploring alternatives.

Denmark and Panama provide striking examples. Trump’s renewed focus on Greenland and growing concern over the Panama Canal suggest an increased willingness to use economic muscle for geopolitical leverage.

Meanwhile, China, which has already forged economic relationships in both countries, may find fresh opportunities if tensions with Washington rise.

Even America’s closest trading partners, Mexico and Canada, are under strain. Trump’s aggressive tariffs undermine decades of economic integration established under NAFTA and its successor, the USMCA.

This uncertainty could make China an increasingly attractive alternative for businesses looking for reliable, long-term trading relationships.

That said, China is not a universally trusted player. Many nations remain cautious about Beijing’s economic influence, particularly those that have struggled with debt burdens tied to its investment projects.

But in comparison to Washington’s erratic trade policy, China offers something valuable: consistency. Unlike Trump’s sudden tariff escalations, China’s trade strategy is largely predictable. For nations seeking stability, that reliability is appealing.

For the US, the risks are clear. Latin American economies, among others, already see China as an indispensable trade partner.

Should Trump’s trade war policies push them further into Beijing’s sphere of influence, America’s economic and diplomatic standing in the region could suffer long-term consequences. The more volatile US policy becomes, the more other nations will seek alternatives.

China doesn’t need to take aggressive action to win from Trump’s tariff war. It only needs to appear steady and willing to engage. If Trump’s administration continues on this path, his policies may not reinforce America’s economic power—they may hand China an even greater role in global trade.

Nigel Green, is the group CEO and founder of deVere Group, an independent global financial consultancy.