Donald Trump’s second term is off to a combative start, and the first casualty may be America’s own influence.
His sweeping tariff escalation, including 25% duties on imports from Mexico and Canada, a 10% levy on Canadian energy and new tariffs on Chinese goods, underscores a US shift towards aggressive economic nationalism.
He has also signaled forthcoming tariffs against the EU, further rattling global markets. While Trump asserts economic leverage, China appears well-positioned to benefit.
The response to Colombia is a case in point. Gustavo Petro, the country’s president, last week publicly challenged the United States over the treatment of deported migrants.
Soon after, Trump imposed tariffs on Colombian exports, introduced banking sanctions and restricted government officials from US travel. The move was a hard power shift in Washington’s approach, one that could have broader implications for international partnerships.
But if the White House views this as a needed firm stance, its effects remain to be seen.
The episode highlights the unpredictability of America’s global relationships under Trump. If a country historically aligned with Washington can face sudden economic punishment, others may seek to diversify their alliances.
And Beijing, with its growing economic engagement in Latin America, is watching closely.
For years, China has positioned itself as an alternative to US economic leadership. Its Belt and Road Initiative has brought significant investment into Latin America, Africa and Southeast Asia, offering infrastructure funding with fewer political conditions attached than Western loans and aid.
In Latin America alone, Beijing’s trade and financial ties have expanded considerably. Now, as Trump reintroduces tariff threats and economic pressure, China’s role as a steady trading partner becomes more appealing.
This shift isn’t purely economic. Washington has long relied on its reputation for consistency and adherence to international agreements.
Even when Trump disrupted global trade during his first term, institutions such as the WTO provided a measure of stability. Now, with a renewed focus on unilateral economic measures, some countries may reevaluate their dependency on US trade.
Denmark and Panama, two nations currently drawing Trump’s interest, offer further insight into these dynamics. Trump’s desire to buy and threat to take Greenland and concerns over the Panama Canal illustrate how economic leverage is increasingly being used as a geopolitical tool.
Beijing, which has already built economic partnerships in both nations, could benefit if tensions with Washington escalate. Panama vowed free passage for US warships through the Panama Canal and said it would not renew its participation in China’s Belt and Road Initiative after US Secretary of State Marco Rubio blasted the government during his visit on Sunday.
Then there’s Mexico and Canada, America’s closest trading partners. With Trump following through on steep 25% tariffs, the effects will extend beyond North America. It would challenge decades of economic integration under NAFTA and its successor, the USMCA.
China, actively expanding its trade relationships worldwide, could become a more attractive partner for manufacturers and governments seeking long-term stability.
To be sure, none of this guarantees a wholesale shift away from the US and toward China. Many countries remain cautious about Beijing’s investment strategies, particularly those that have faced difficulties with debt and influence concerns.
But Trump’s approach may make China appear more predictable by comparison. Unlike Washington, Beijing tends to avoid placing political conditions on trade or frequent tariff escalations. For nations wary of policy uncertainty, that predictability carries weight.
For the US, the risks of this approach are significant. A growing number of Latin American nations already view China as a key economic partner.
If Trump’s policies push them further toward Beijing, Washington could face not only trade setbacks but a weakening of its regional influence. The more America’s allies feel uncertain about their standing, the more likely they are to explore alternative partnerships.
China doesn’t need to take aggressive steps to benefit; it may simply need to provide a stable alternative.
As Trump continues asserting his economic vision, the broader question remains: will these policies strengthen America’s position, or will they create openings for competitors like China to gain ground?
