China rushes to placate neighbours as Trump's tariffs bite

As a full-blown trade war erupts between US and China, the world’s second-largest economy is increasingly turning to its neighbours to soften the economic blow.

For example, this week the ruling communist party hosted a conference dedicated to neighbourhood diplomacy for the first time since 2013. Addressing the conference, China’s Xi Jinping urged to break “new ground” in China’s relations with neighbouring countries, reported South China Morning post, citing state media.

Interestingly, as US President Donald Trump announced a staggering 145 per cent tariffs on Beijing, Xi Jinping laid the ground for a reinforced outreach to its neighbours, some of whom are also its top trading partners.

Moreover, Xi is expected to travel to Southeast Asian nations the next week. He will visit Vietnam, Malaysia and Cambodia to deepen economic ties and to seek support and co-operation against Trump’s sweeping tariff war.

The SCMP quoted Zhiqun Zhu, a professor of international relations at Bucknell University in Pennsylvania, as saying that Trump’s tariffs have triggered a “sense of urgency” in Beijing about mending its ties with its neighbours.

The outreach would “demonstrate to the Trump administration that the US is not China’s only export market, and not an indispensable market either” Zhu added.

According to a press release issued after the communist party’s conference on neighbourhood diplomacy, China has identified Southeast Asia as “a priority area in managing overall diplomacy, and a crucial link in promoting the building of a community with a shared future for mankind”.

Benoit Hardy-Chartrand, an international affairs specialist at Temple University Japan in Tokyo, meanwhile said China was seeking to deepen ties with ASEAN nations due to their proximity to the world’s important trade corridors.

“Southeast Asia has long been an area of priority for Beijing, given its highly strategic location at the confluence of the Indian and Pacific oceans, its proximity to some of the world’s most important trade routes, and its growing market.”

However, the expert added that Beijing’s outreach faces steep challenges. Nations like the Philippines and Vietnam were wary of China, who maintain that economic ties won’t realise their full potential until bilateral security issues are sorted out.

Beijing appeasing India too

At the same time, China is believed to have signalled its intention to address India’s concerns about a growing trade deficit, which swelled to a record $100 billion in Financial Year 2025.

Hindustan Times reported that Beijing was looking to increase imports from India by removing tariff and non-tariff barriers on several goods.

India nearly froze Chinese investments and banned a bunch of Chinese apps after the military standoff at the Line of Actual Control (LAC) began in April-May 2020. Both sides had around 60,000 troops facing off, dragging India-China relations to their worst point since the 1962 war.

But things have started to shift. After both sides agreed last October to pull troops back and re-activate some high-level talks, China has been nudging India to relax trade restrictions. They’re asking for more business visas, direct flights, and an overall friendlier environment for Chinese businesses again.