China win in first round of economic war with US a blessing and curse

For almost a decade, since Donald Trump was first elected US president in 2016, China has tried to keep its world spinning a certain way. However, the decisions across multiple administrations in the United States, from outbound investment restrictions to technology trade rules, have disturbed the fragile ground China has stood on to develop and grow.

Officials in Beijing have been searching for opportunities to turn the tide in their favour. Strangely, China’s salvation arrived in the form of Trump’s “Liberation Day” and the US-China economic war that is under way.

As China matched US tariffs and throttled rare earth exports, doors that were closed have started to reopen. The US is restarting the supply of chip design software and jet engines to China, Australia and the European Union are seeking to reset economic ties with Beijing and South Korea reportedly refused to comment on China and Taiwan at a recent trilateral summit with Japan and the US. All the while strategic Western projects such as the Aukus grouping appear to be up in the air.

By meeting the US head-on, China has changed the geopolitical climate. Parts of the old China-friendly environment are returning, splits are forming between the US and its closest partners and Beijing has suddenly emerged as the guardian of the world order that Washington built but is now exiting.