China is a far bigger trading partner than the US for most countries. That limits what Trump can demand, experts say.
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Why China has warned countries against ‘appeasing’ Trump in trade deals
How dependent is the world on Chinese exports?
In a report published in January by the Lowy Institute, a Sydney-based think tank, analysts found that in 2023, about 70 percent of countries imported more from China than they did from the US.
China’s rapid ascent as a trading superpower can be traced back to 2001, the year it joined the World Trade Organization (WTO) and when it started to dominate global manufacturing after years of successful protectionist industrial policies.
During the 2000s, China benefitted from the relocation of international supply chains, turbocharged by substantial inflows of foreign investment, large pools of low-cost labour and an undervalued currency exchange rate.
By 2023, China had become the largest trading partner for at least 60 countries, almost twice as many as for the US, which remained the largest trading partner for 33 economies.
The gap between them is also widening in many countries: The Lowy Institute analysis found that in 2023, 112 economies traded more than twice as much with China as they did with the US, up from 92 in 2018 during
Trump’s first trade war.
“The critical dependence China has developed around the world, especially in Asia, means that lots [of trading partners] cannot do without China,” said Alicia Garcia-Herrero, an economist at the investment bank Natixis. “From critical minerals to silicon chips, Chinese exports are almost irreplaceable.”
Can countries afford to alienate China on trade?
According to Garcia-Herrero, a few countries such as Mexico that have particularly deep trade links with the US, probably will “say no to Chinese imports”.
However, she highlighted that “China’s presence in supply chains is so massive for most of America’s other trade partners, decoupling is virtually impossible.”
Indeed, around the world, China has become an invaluable source of imports. The European Union, for instance, had a trade deficit with China worth 396 billion euros ($432bn) in 2022, up from 145 billion euros ($165bn) in 2016.
China accounts for 20 percent of EU goods imports. The equivalent figure in Great Britain is 10 percent. Last week, Treasury Secretary Rachel Reeves said it would be “very foolish” for the UK to engage in less trade with China.
Across the developing world, China’s trade role is just as crucial. Roughly a quarter of Bangladesh’s and Cambodia’s total imports are from China. Nearly a fifth of Nigeria’s and Saudi Arabia’s goods imports come from China.
“Trump’s trade policy is shortsighted,” Garcia-Herrero said. “Trying to pry trade away with China may work in countries where the US has military bases. … They may have to accept the US’s concerns.”
“But for most countries, particularly those in the Global South, the more that Trump threatens, the more that countries will go on China’s side.”
