Amid the shock and awe of Donald Trump’s extraordinary first weeks in office, it has been a challenge for America’s partners around the world to distinguish the signal from the noise. Domestic actions such as dismantling parts of the federal state are real and consequential, even if they prove to be unlawful, but in foreign policy Trump has majored on threats and rhetoric.
Trump stepped back from imposing blanket tariffs on Canada and Mexico. Tariffs on steel and aluminium imports into the US are now due next month with other wider tariffs threatened. It remains to be seen how these pan out.
However, Trump has imposed a 10 per cent tariff on all imported goods from China. Beijing retaliated by announcing fresh tariffs on US oil, gas, coal and agricultural equipment and launched an antitrust investigation against Google. Beijing also imposed export controls on key minerals and added the company behind clothing brands Calvin Klein and Tommy Hilfiger to a national security watchlist.
The Chinese response was limited, targeting only 10 per cent of US imports and official rhetoric about the US tariffs has been relatively restrained. With domestic demand weak, a trade war with its biggest export market is the last thing China’s economy needs.
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Beijing stands to benefit in the longer term from Trump’s capricious behaviour and his disdain for a rules-based international order. As the US withdraws from multilateral bodies like the World Health Organisation and abandons the Paris climate agreement, China is ready to take on a bigger role in global governance and will present itself as the guarantor of the multilateral trading system. The cancellation of US development aid programmes offers it an opportunity to enhance its relationships across the Global South.
These geopolitical shifts present challenges for the European Union that will require a flexible approach to relations with China. Ursula von der Leyen has signalled a willingness to engage with Beijing, something both sides should act upon.
