At a time when global trade is increasingly marred by protectionism, China finds itself uniquely positioned to take the reins of globalization.

The United States’ previous trade war on China was the result of US President Donald Trump’s first-term bet on protectionism and bilateralism instead of free trade and multilateralism, which actually brought great prosperity to America, not to mention global influence.

Now in 2025, at the start of Trump’s second term, the situation does not seem better in that regard. Tariffs seem to be a threat repeatedly used by Trump not only against China but in general against the whole world, including against close allies such as Canada and the European Union. Therefore, the risks of a new and even more expanded trade war are higher than ever.

As a matter of fact, on Feb 1, Trump imposed an additional 10 percent tariff on Chinese goods, which the Chinese government responded to on Feb 4 by announcing a broad package of countermeasures. These included levying a 15 percent tax on certain types of coal and liquefied natural gas, and a 10 percent tariff on crude oil, agricultural machinery, large-displacement cars and pickup trucks, among other measures. This whole situation is unfortunately too similar to the previous trade war started by Trump in 2018.

Trump’s measures are unfortunately consistent with what he said via video at the recently held World Economic Forum in Davos in what was the first international speech of his second term, where he took a combative approach to international diplomacy, warning that there would be tariffs imposed on businesses that refuse to invest in this vision of US success.

A couple of months ago, Trump also targeted BRICS, threatening to impose a 100 percent tariff on BRICS countries if they were to create a rival currency to the US dollar.

Imposing tariffs seems a wrong approach since trade-related tensions will not only harm both China and the US but also third parties. New tariffs and a potential trade war create uncertainty for the world economy, which is anathema to all businesspeople and investors. If we take a look at past trade wars, the results were not encouraging at all.

However, every cloud has a silver lining. What may seem like a threat now, can actually be a blessing in disguise. To some extent, the rise of economic isolationism, epitomized by Trump’s trade wars, has left a leadership vacuum in global trade governance. Against this backdrop, China, with its vast manufacturing base, ambitious Belt and Road Initiative (BRI), and increasingly assertive role in multilateral institutions like the World Trade Organization, has an unprecedented opportunity to advocate for a more interconnected and inclusive global economy. Yet no global champion can act alone. In this endeavor, Hong Kong — long celebrated as Asia’s world city — stands as a vital bridge between the Chinese mainland and the rest of the world, blending its global expertise with the mainland’s strategic vision.

 However, the truth is that today, China is in a great position to lead globalization as opposed to Trump’s unilateralism, a new role which will open doors for China to collaborate more closely with other countries or blocs like the EU. We are moving toward a very different world. It comes with risks, of course, but it also offers opportunities, and China has the potential to leverage these opportunities

Through platforms such as the Regional Comprehensive Economic Partnership, China has demonstrated its commitment to fostering open trade in Asia. Similarly, the BRI has extended China’s influence far beyond Asia, connecting over 140 countries through investments in infrastructure, energy and logistics. This network offers an alternative model to the inward-looking policies seen in some Western nations. China’s increasing promotion of the renminbi in global trade further strengthens this position, reducing dependency on the dollar and providing emerging economies with an alternative currency for settlement.

China is also emerging as a tech leader. For example, back in 2017, China made AI a national priority, stating its ambition to become “the world’s premier artificial intelligence innovation center” by 2030. Recently, the media reported that a prominent adviser to Beijing said that China must strive to be an “open source” country in trade and technology to champion globalization, even as the US resorts to protectionism (or, in my opinion, precisely because of that).

Focusing on Hong Kong, the city is already the world’s largest offshore RMB hub, handling over 75 percent of global RMB payments and offering a robust ecosystem for RMB-denominated financial products. Through initiatives such as the Bond Connect and Stock Connect programs, the city has made it easier for international investors to access the Chinese mainland’s capital markets, helping integrate RMB into global investment portfolios. In recent years, Hong Kong has also facilitated RMB clearing worth trillions annually, reinforcing its role as a critical conduit between the mainland and the global economy. By promoting RMB trade settlement and encouraging its use in BRI projects, China can reduce dependency on the dollar while providing a stable currency option for developing countries. Furthermore, Hong Kong’s expertise in financial innovation — particularly in digital assets — could play a pivotal role in advancing China’s digital RMB, potentially transforming cross-border payments and trade.

Another silver lining is the fact that Trump’s trade policies could bring China closer to the EU. As a matter of fact, Trump has cited the need to rectify the EU’s trade imbalances with the US. “They treat us very, very badly. So they’re going to be in for tariffs,” Trump said of the EU.

While in recent years the EU has taken a tougher stance toward China (for example, the additional duties of as much as 35.3 percent on Chinese electric vehicles, approved in October), Trump’s policies could encourage the EU to work more closely with China, since, at the end of the day, the EU may need to look for alternatives to some extent.

In this sense, the president of the European Commission, Ursula von der Leyen, said in Davos that “The first trip of my new Commission will be to India. … We want to strengthen the strategic partnership with the country. I believe we should also strive for mutual benefits in our conversation with China.” They are messages with strong political content directed at Trump, whom von der Leyen almost challenges when she outlines the direction she intends to take. In other words, von der Leyen is now looking east, perhaps finally seeing China and India as alternatives.

While differences will remain between China and the EU, the truth is that there are more synergies than differences, and both parties should focus on these synergies and common interests to build an enhanced mutually constructive relationship. And the same idea applies of course to US-China relations.

To sum up: If the US insists on tariffs and trade wars, China must leverage the opportunity to become the new champion of globalization, which is to some extent unexpected given that this was a role played by the US for decades and that until 20-odd years ago, China was not even part of the WTO. However, the truth is that today, China is in a great position to lead globalization as opposed to Trump’s unilateralism, a new role which will open doors for China to collaborate more closely with other countries or blocs like the EU. We are moving toward a very different world. It comes with risks, of course, but it also offers opportunities, and China has the potential to leverage these opportunities.

The author is a fintech adviser, a researcher and a former business analyst for a Hong Kong publicly listed company.

The views do not necessarily reflect those of China Daily.