China Looks to Neighbors as Trump Tariffs Loom

Welcome to Foreign Policy’s China Brief.

The highlights this week: China seeks to shore up trade relations with Japan and South Korea as the United States’ reciprocal tariffs loom, Beijing hammers the Hong Kong conglomerate that agreed to a deal on ports in the Panama Canal, and the U.S. state of Florida fires a Chinese professor under a 2023 law on foreign influence.

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Will Beijing Work With Asian Powers on Free Trade?

Another round of U.S. tariffs looms on Wednesday, with President Donald Trump threatening so-called reciprocal tariffs that could amount to an estimated 20 percent imposition on most foreign goods. In anticipation, China is trying to shore up relations with some neighbors and position itself as a global leader of free trade.

But China is also using the strategic space created by the decline of the U.S.-led global order to threaten and bully other neighbors, such as Taiwan—which might frustrate its attempts to play nice with Japan and South Korea.

Last Friday, Chinese President Xi Jinping pitched his country as a guardian of free trade, speaking to a room of global business leaders in Beijing. The Chinese, Japanese, and South Korean trade ministers met on Sunday, agreeing to “cooperate closely” on a future free trade deal and promote both regional and global free trade, according to a joint statement released afterward.

Chinese state media said that the three countries would also cooperate on responding to Trump’s tariffs, prompting some understandable panic in Washington. But that readout from the Sunday meeting doesn’t seem to correspond with the Japanese and South Korean accounts, which focused on general free trade cooperation. A South Korean spokesperson said the Chinese report had “some exaggerated aspects.”

Though the meeting was the first economic discussion between the three regional powers since 2019—thanks to COVID-19 disruptions and political suspicion—they have all been talking bilaterally.

Japan in particular is attempting what analyst Tobias Harris calls a “double hedge”: an effort to get closer to both China and the United States. South Korea, meanwhile, is grappling with ongoing political chaos and thus unable to take any long-term strategic position.

There is one big test of whether the other Asian powers are ready to work with Beijing on free trade. China applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2021, but it has been blocked from joining by firm opposition from Tokyo and other members who are eager to avoid dealing with the issue of Taiwan, which applied at the same time. (Taiwan remains in the applicant stage, too.)

The CPTPP was borne out of the Trans-Pacific Partnership (TPP), a bloc that former U.S. President Barack Obama’s team worked for years to build—only for Trump to immediately pull the United States out of the deal in 2017, when he began his first term. The other parties to the free trade agreement resurrected it as the CPTPP, which came into force in 2018.

However, the purpose of the TPP was in part to maintain U.S. economic leadership in Asia and provide a united bloc against China’s aggressive and politicized trade policies. Now, the CPTPP’s main problem is Trump’s economic coercion, not Beijing’s—and that might mean eventually letting in the superpower that the group was formed to oppose.

China has criticized the United States for the “weaponization” of trade, even though it is an approach that Beijing has used on numerous occasions, such as to punish Norway for Chinese dissident Liu Xiaobo’s Nobel Peace Prize and South Korea for deploying a U.S. anti-missile system. Pragmatism, however, might make China look like an appealing ally if the United States pits itself against the rest of the world.

Yet China’s military actions could frustrate its own sales pitch. A sudden round of exercises around Taiwan today—which the Chinese People’s Liberation Army (PLA) called “a stern warning and forceful deterrence” against those seeking independence for the self-ruled island—is unlikely to reassure Tokyo or Seoul that Beijing is a force for stability in the region.

China has tested the limits at sea this year, including live-fire drills in the waters between Australia and New Zealand, both parties to the CPTPP.

The PLA’s assertiveness could be anticipatory, if China believes that Trump’s willingness to abandon long-term allies includes Taiwan—but it may also be simply reactive. Taiwan is such an red-line issue in domestic Chinese politics that the PLA must respond to any shift, such as Taiwan’s recently announced measures against Chinese espionage and influence.

Avoidance of taking a maximally aggressive position on Taiwan can easily be weaponized against any Chinese leader, whether a Chinese Communist Party (CCP) secretary or an admiral, by his rivals. Beijing might think that it can play hardball in the Taiwan Strait and softball with Tokyo—or, alternatively, the Chinese Ministry of Commerce and the PLA may be working with very different agendas.

What We’re Following

Panama ports deal showdown. China has been hammering Hong Kong conglomerate CK Hutchison after it agreed to a deal with a group led by U.S. firm BlackRock to sell ports overseas, including critical properties in the Panama Canal. CK Hutchison is controlled by Hong Kong billionaire Li Ka-shing, who is not in Beijing’s good books.

The deal is supposed to be signed on Wednesday, but China has announced anticipatory investigations that would spell serious trouble for Li’s enterprises. CK Hutchison may already be planning to pull out of the deal, according to a Reuters report.

The showdown is an indication that China sees the conflict with Trump—who threatened to “take back” the Panama Canal over concerns about Chinese influence—as an effort in which private firms, even those based in Hong Kong, need to follow the CCP’s lead.

Florida fires Chinese professor. A 2023 Florida law that dictates that state-funded universities cannot “accept any grant from or participate in any agreement with any college or university based in a foreign country of concern” has resulted in the firing of a Chinese dissident who sought refuge in the United States—on the grounds that he was a professor back in China.

Kevin Wang, an adjunct professor of Chinese language and culture at the New College of Florida, said he would leave Florida but remain in the United States. Florida and Texas have been at the forefront of legislation that seeks to target the CCP but is often instead used against members of the Chinese diaspora residing in the United States.

In a climate of fear and anticipatory compliance within U.S. universities, blunders like this are likely to become more common—with a chilling effect on Chinese talent.

FP’s Most Read This Week

Tech and Business

European trade deals. As the world braces for the next step in Trump’s trade wars, China is looking to grow closer to Europe, delaying its own anti-dumping investigations on French cognac and armagnac as well as meeting with European commissioners to discuss ensuring a “level playing field.” That contrasts with China’s approach to Canada, which remains on the outs with China.

A united front between China and Europe is unlikely, but even limited coordination could undercut U.S. coercion. A recent simulation carried out by the Center for a New American Security think tank found that the United States came out of a global trade war surprisingly well when China failed to peel off other governments.

But simulations are better as tools for understanding behavior than predicting it, and that outcome may assume an unrealistic level of rationality and ability to cooperate from Washington.

China looks to recruit U.S. scientists. As the Trump administration guts U.S. scientific research, Chinese cities are looking to recruit talent, offering a potentially more stable environment and generous funding. A Nature poll published last week found that 75 percent of U.S. scientists surveyed were already considering leaving the country.

China has always looked to scoop up foreign talent, which the United States tends to cast as an espionage effort. That is sometimes the case, but scientists in China also conduct world-leading research in many fields. However, there are barriers to moving to China for early- or mid-career scientists.

First, there are almost no routes to permanent residency for foreigners in China, let alone citizenship. Second, Chinese laboratories have persistent problems with research fraud, despite frequently announced government crackdowns. Finally, Chinese scientific culture is also politicized—especially under Xi.

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