The recent freeze on US foreign aid and escalating tariffs on Chinese imports, coupled with the targeting of Canada and Mexico for tariffs, send a clear signal about President Donald Trump’s “America first” agenda. This shift in policy has created economic and political opportunities for China to expand its global partnerships.

On Feb 27, President Trump announced additional 10 percent tariffs on imports from China, citing China’s role in the fentanyl trade as the rationale. This move, doubling the previous 10 percent tariffs imposed earlier in the month, is part of a broader strategy to pressure China. Trump also reinforced his threat to impose 25 percent tariffs on products from Canada and Mexico, criticizing these countries for not doing enough to curb drug smuggling. These tariffs took effect on March 4, despite earlier hints of potential delays.

Most economists assert that Trump’s tariffs will harm the US economy and its global standing. Despite opposition from mainstream economists and trade experts, tariffs are central to Trump’s economic playbook. They are intended to serve as a negotiation tactic to pressure firms into bringing production back to the US and addressing alleged unfair trade practices that have led to significant trade deficits.

However, without a comprehensive plan to support strategic businesses capable of competing globally, tariffs alone cannot rebuild the industrial ecosystem the US has lost since the 1980s. Instead, these unpredictable threats of tariffs disrupt American supply chains, leading to unintended consequences, such as a slowing economy and inflation because of higher consumer prices.

Across the Pacific, China has taken proactive measures to mitigate the impact of the escalating tariffs and capitalize on the opportunities created by the US policy shift.

Enhancing agricultural productivity

China is focusing on enhancing agricultural productivity to achieve self-sufficiency in feeding its population. With declining arable land and agricultural water resources, China is developing a new agrarian plan emphasizing artificial intelligence (AI), biotechnology, and advanced seeds to boost productivity. For example, DJI drones equipped with sophisticated imaging technologies and advanced spraying systems are helping farmers produce more using less land and water, making precision farming more efficient and sustainable. China’s agricultural strategy also includes diversifying crops to reduce dependency on imports.

Trump’s tariff plan has created both risks and opportunities for China. By effectively implementing these proactive measures and initiatives, China can capitalize on these opportunities to enhance its economic and political standing on the global stage

Advancing AI and technology

China is unleashing its recent success in affordable, accessible, and sustainable AI development. Companies like DeepSeek are leading the way in encouraging other private firms to develop advanced AI to improve productivity. For example, DeepSeek has developed algorithms that optimize supply chain logistics, reducing costs and improving efficiency for manufacturers.

Despite a declining population, China is leveraging AI, robotics, and autonomous driving advancements to boost productivity in various sectors, including education, healthcare, culture, and transportation. For instance, in the healthcare sector, AI-powered diagnostic tools improve patient outcomes and reduce the burden on healthcare professionals.

Strengthening domestic innovation

President Xi Jinping’s recent symposium with top entrepreneurial leaders from companies like Alibaba, BYD, and Xiaomi underscores the government’s commitment to fostering innovation and economic growth. For example, Alibaba is investing heavily in cloud computing and AI research to become a global leader.

BYD, a leading electric vehicle (EV) manufacturer, is expanding its production capabilities and investing in research and development to create more efficient and affordable EVs for the global market. Xiaomi, known for its smartphones, is diversifying its product portfolio to include smart home devices and wearables. It is leveraging its strong brand and technological expertise to capture new market segments.

Expanding global trade

Despite the US and EU imposing tariffs on Chinese goods, China is leveraging its port investments worldwide and its trade relationships with other BRICS countries to expand its trade with Southeast Asia, the Middle East, Africa, and Latin America. Since the trade war began in 2018, China’s agricultural imports from the US have declined, but trade with Latin America has increased significantly. China has boosted its imports of fruits, grains, meat, and other products from Latin America while exporting Huawei Technologies’ hardware and BYD’s electric vehicles.

China’s Belt and Road Initiative has been instrumental in expanding its trade network. China is enhancing connectivity and facilitating trade with partner countries by investing in infrastructure projects such as ports, railways, and highways. For example, developing the Mombasa-Nairobi Standard Gauge Railway in Kenya has improved transportation efficiency and boosted trade between China and East Africa.

Investing in Latin America

China is also investing heavily in Latin America to circumvent high tariffs imposed on direct imports from China. For example, BYD is building an industrial complex in Brazil to produce hybrid and fully electric vehicles. In Chile, Tsingshan Holding Group is setting up a plant to produce lithium iron phosphate batteries for EVs.

Beyond manufacturing, China’s investments in Latin America involved energy projects, such as the construction of hydroelectric dams and solar power plants, to support sustainable development in the region. Additionally, China provides financial assistance and technical expertise to improve infrastructure and enhance economic growth in Latin American countries.

Besides these proactive economic measures, China is stepping in to fill the void left by the US in diplomatic and humanitarian efforts. The dramatic cut in staffing for United States Agency for International Development projects worldwide has disrupted diplomatic and humanitarian efforts in developing countries, affecting those who rely on medical and food support. China can provide support as goodwill, allowing it to exert influence through soft power, which can pay dividends in the future.

For example, China has increased its contributions to international organizations such as the World Health Organization, positioning itself as a global leader in addressing health crises and promoting sustainable development. Also, China offers scholarships and educational exchange programs to students from developing countries, fostering goodwill and strengthening cultural ties.

Trump’s tariff plan has created both risks and opportunities for China. By effectively implementing these proactive measures and initiatives, China can capitalize on these opportunities to enhance its economic and political standing on the global stage.

The author is a distinguished professor at the UCLA Anderson School of Management.

The views do not necessarily reflect those of China Daily.