China’s rising influence shows the fragility of Trump’s trade policy

After taking office for a second term, US President Donald Trump shook the world with his aggressive tariff policies. When he imposed tariffs — particularly on rival China — the world witnessed a flurry of intense negotiations. 

However, those days of careful diplomacy now appear to be ending, as other global and regional powers are regrouping and exploring alternatives to counter the long standing hegemony of the US.

Trump's rapport with Modi has pushed the Indian leader to pursue a different path in addressing long-standing issues with China, especially border disputes. 

Meanwhile, Russian President Vladimir Putin and North Korean President Kim Jong-un have grown closer, exchanging warm gestures and projecting a more strong grouping.

On 3 September 2025, China marked the 80th anniversary of the end of World War II with a large-scale military parade in Beijing. Jets flew overhead, soldiers, tanks and artillery marched in order, and missiles were shown openly. 

The event drew global attention not only for its scale but also for the message it conveyed: that China is projecting itself as a more confident and capable global power. Moreover, in this event, President Xi was not alone; he was joined by Putin and Kim as well.

At the same time, Trump faced mounting challenges at home and abroad. While China projected unity and forward-looking ambition, Trump's trade policies were under legal and political scrutiny. On social media, he criticised Beijing for downplaying the US's role in World War II, but the underlying concern was China's growing influence and global image. 

The contrast was evident; China was using international events to reinforce a narrative of stability and competence, while Trump struggled to defend his economic approach.

Earlier in 2025, he imposed a 145% tariff on Chinese imports. Consequently, Beijing responded with 125% tariffs on US goods, affecting mostly manufacturers and tech companies. Trump defended the policy as a measure to protect US jobs, but higher prices for consumers and disruptions to supply chains became widespread. 

Adding to the challenge, a US federal appeals court ruled on 29 August 2025 that most of Trump's tariffs were unlawful, arguing that the president had exceeded his authority under emergency powers. While the tariffs remain in effect until 14 October pending a Supreme Court review, the ruling highlights the fragility of a central element of Trump's economic strategy and raises questions about executive power in trade policy.

While the US dealt with these domestic complications, China also focused on strengthening its regional influence through diplomacy. Just days before the parade, Xi hosted the Shanghai Cooperation Organisation summit in Tianjin from 31 August to 1 September. 

Leaders from Russia, India, Pakistan, Iran, Turkey, and Central Asian countries attended, marking the largest SCO meeting in the bloc's history. At the summit, Xi announced a dedicated budget for the SCO and proposed the creation of a development bank and announced development projects across member states.

While Trump's trade war was designed to preserve US dominance, it now faces legal uncertainty and growing scepticism from global partners. Eurasian countries and others further afield are recalibrating their strategies, carefully diversifying and adjusting alignments to hedge against volatility in US policy.

These steps reinforced China's role at the centre of regional economic initiatives and demonstrated its ability to coordinate diverse partners, including countries that maintain ties with the US.

The summit also highlighted China's broader strategic ambitions. By fostering economic initiatives, supporting infrastructure development, and promoting regional cooperation, Beijing is positioning itself as a credible and reliable partner for decades to come in South and Southeast Asia. China announced grants and $1.4 billion in loans for SCO members to boost infrastructure financing across the region.

Even Indian Prime Minister Narendra Modi — generally aligned with the US-led Quad — took part, despite India's imposition of a 50% tariff. His participation underlined how countries in the region are increasingly hedging their positions rather than taking a firm side.

Moreover, China's Belt and Road Initiative (BRI) continues to extend its influence, particularly in the developing world. Massive projects — ranging from ports and railways to energy pipelines and digital networks — have tied many countries more closely to Beijing, starting in Asia and expanding worldwide. 

These projects not only deliver much-needed development but also deepen economic dependence on China, giving Beijing greater leverage in global negotiations and reinforcing its role as a central partner for emerging economies seeking alternatives to Western-led financing.

Despite these gains, China faces serious economic headwinds. Export growth slowed to 5% year-on-year in August, down from 7.2% earlier in the year. Domestically, property market instability and rising youth unemployment continue to weigh on policymakers. 

Initiatives such as the proposed SCO development bank and budget are intended to mitigate these challenges, though their effectiveness remains uncertain.

Still, in global politics, perception often matters as much as reality. The military parade and summit together projected an image of competence and forward planning — especially when contrasted with US domestic disputes and legal battles.

The juxtaposition of China's coordinated international strategy with Trump's domestic struggles and the risk of losing a close ally like India underscores a broader shift in global power dynamics. Beijing currently enjoys greater narrative control: it can project both internal cohesion and international influence, while the Trump administration is distracted by legal vulnerabilities and divided attention.

Together, the parade and summit formed part of a coordinated effort by US rivals to strengthen their global position and shape perceptions of leadership in the wake of Trump's disruptive trade policies. 

While Trump's trade war was designed to preserve US dominance, it now faces legal uncertainty and growing scepticism from global partners. Eurasian countries and others further afield are recalibrating their strategies, carefully diversifying and adjusting alignments to hedge against volatility in US policy.

China's mix of military display, diplomatic outreach, and economic planning demonstrates that international perception can be just as important as hard power. In contrast, Trump's unilateral trade approach highlights the risks of acting without sufficient legal or diplomatic backing.

How the US responds in the coming months will be crucial in shaping both global power dynamics and its own credibility. The decisions made now could determine who sets the terms of global leadership for years to come, as countries weigh stability, trust, and strategic opportunity in a rapidly shifting global order.