How China plans to dominate global trade long after Trump
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- February 18, 2026
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China sees an opening to turn President Donald Trump’s tariffs to its advantage by reshaping global trade in ways that would insulate its $19tn 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 European Union, Gulf States and a trans-Pacific trade pact, a Reuters examination found. The push involves accelerating efforts to clinch some 20 trade deals in total, many years in the making, despite widespread concerns about China’s overproduction, uneven market access and soft domestic demand. A Reuters review of 100 Chinese-language articles by state-backed trade scholars 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 now putting that blueprint into action. The deal reached with Canada during Prime Minister Mark Carney’s January visit to Beijing — 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,” said one Chinese official of Trump’s disruptive trade agenda. The review, drawn from over 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,” said Alicia Garcia Herrero, senior fellow at the Bruegel think tank. China’s commerce ministry didn’t 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 globalisation caused for the United States while other countries are trying to double down on globalisation as free market access to the United States goes away,” the official said. BUILDING BLOCSThe shift in China’s tone reflects its calculations. A year ago, Beijing was invoking Mao Zedong and its ability to fend off the West in the Korean War with martial propaganda. Now, 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. In January, China dispatched its top diplomat to tiny Lesotho — which Trump initially hit with a 50% tariff — to pledge development co-operation. On Saturday, state media said China would implement zero tariffs on imports from 53 African countries. Meanwhile, China is pitching AI-powered customs systems to neighbours 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 can’t afford to decouple under US pressure. “In countering US strategic competition with China, ‘anti-decoupling’ should become China’s primary focus,” wrote Ni Feng, fellow at CASS’s Institute of American Studies, 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,” commerce ministry spokesperson He Yongqian told Reuters during Carney’s visit, without elaborating. China’s foreign minister Wang Yi surprised European negotiators in November 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. In January, British Prime Minister Keir Starmer agreed with Chinese leader Xi Jinping 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 will seek “strategic partnerships” with China during a trip next week. China’s commerce minister Wang Wentao 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. But China’s huge trade surplus complicates the pitch. Some member countries worry Chinese manufacturers may use improved market access to funnel excess low-cost goods abroad, while China’s domestic demand remains sluggish. Wendy Cutler, chief negotiator during the Obama administration 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 told Reuters. 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. Speaking to Reuters, one noted the EU and China had negotiated a landmark 2020 investment deal during Trump’s first term. The deal, however, was frozen in 2021 before it could take effect amid a dispute over human-rights sanctions. LESSONS LEARNEDSome 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 World Trade Organization. Others argue Beijing should focus on influencing global standards in fields such as intellectual property through initiatives like Xi’s Belt and Road program and China’s membership of the Regional Comprehensive Economic Partnership, which covers about 30% of global GDP. China is now applying those insights. Its recently upgraded deal with Southeast Asian states, for example, focuses on AI-driven and digital trade, where China hopes to secure a first-mover advantage. Indeed, China’s vision for customs processing is evident at its “Friendship Port” on the Vietnamese border, where state media says home-grown AI solutions have slashed waiting times by 20%, enabling faster deliveries. Reuters couldn’t independently verify the claim. TRILLION-DOLLAR SURPLUSThe risks that China’s $1.2tn trade surplus poses to trading partners’ manufacturing sectors are hard to overlook, however. Pascal Lamy, former WTO director-general and EU trade commissioner, 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 said. 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 wouldn’t be swayed. Carney has said Canada respects its USMCA commitment not to pursue free-trade deals with non-market economies. His office didn’t 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,” said a Mexican trade official. “We are already in the CPTPP and have 60% 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, China’s commerce minister, has said growing imports is a priority as Beijing prepares to launch its next five-year plan in March, in line with a commitment to raise consumption’s share of GDP. But rebalancing is a long-term project. Trump has three years left in office, and the next 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, then at Renmin University and now a researcher at CASS’s Institute of American Studies, wrote in 2023.
