The US-China trade war has morphed into a larger geopolitical contest—one that’s playing out not just in tariff charts and trade balances but also in diplomacy, alliances, and shifting supply chains. As Washington escalates with heavy-handed tariffs, Beijing is responding not just with retaliation but with charm.
Chinese President Xi Jinping is on a carefully choreographed three-nation tour—Vietnam, Malaysia, and Cambodia—with a clear message: China is the stable, long-term partner the region can count on.
In an era of economic volatility and political unpredictability, especially from the US, Xi is positioning China as a pillar of stability, certainty, and cooperation.
While the tour was likely planned before the most recent tariff hikes, its timing now couldn’t be more strategic. These three countries—each impacted by new US trade measures—have become critical players in the reconfiguration of global supply chains, and China is eager to keep them close.
On the three-nation trip, Xi is making the case for free trade and economic cooperation—an image that contrasts sharply with the United States’s tariff-heavy approach.
Stop 1: Vietnam – Rebuilding Communist Ties
Xi landed in Hanoi to a ceremonial welcome from President Luong Cuong. It marked his second visit in under 18 months—an unusual frequency in diplomatic terms.
China and Vietnam signed nearly 40 cooperation agreements, focusing on supply chain links and infrastructure, including a new joint railway project. Xi also promised increased access for Vietnamese agricultural exports to China, though the details remain sparse.
Beyond trade, the visit signals a strategic recalibration. Vietnam, long caught between Chinese influence and US opportunity, is now seen as a key pivot point in the region’s economic realignment.
China is already Vietnam’s largest trading partner, and there is huge potential for further growth.
Stop 2: Malaysia – Trade Talks & ASEAN Focus
In Kuala Lumpur, Xi is advocating for a free trade deal between China and the 10-member ASEAN bloc—a bold move that could eliminate tariffs across much of Southeast Asia.
Malaysia, which is chairing the Association of Southeast Asian Nations (ASEAN) this year, is central to that vision. Xi’s meetings with Prime Minister Anwar Ibrahim and King Sultan Ibrahim focus on tightening trade and investment ties.
According to ASEAN Secretary-General Kao Kim Hourn, the proposed deal would slash tariffs across the board: “We will bring more tariffs down to zero,” he said. Malaysia, a key Belt and Road Initiative partner, counts China as its top trading partner and leading source of foreign direct investment.
Stop 3: Cambodia – A Strategic Visit
Cambodia will be the final stop, and possibly the most symbolic. With 49% US tariffs looming, it faces one of the harshest hits in the current wave of trade penalties.
Xi’s visit gives Cambodia a chance to deepen its economic reliance on China, even as it tries to maintain strong export ties with the US, one of its top trading partners.
In 2024, China remained Cambodia’s top trading partner, with bilateral trade soaring 24% to over US$14 billion. Cambodian exports to China rose to US$1.6 billion, while imports hit US$12.15 billion.
Trump Targets China
The trade war between the US and China has reached a new and explosive phase. President Donald Trump recently slapped a staggering 245% tariff on Chinese imports—effectively triggering a full-scale economic confrontation. Beijing didn’t sit back. In a swift counterpunch, China raised its own tariffs on American goods to 125%.
Despite this aggressive tit-for-tat, Trump signaled he’s still open to negotiations. Following the tariff hike, the White House said the President was “waiting for a call from Beijing.” Yet, Xi Jinping has remained silent. The two leaders haven’t spoken since January, and Xi hasn’t engaged directly with Trump since the first round of tariff hikes in February.
Adding fuel to the fire, Trump announced a 10% blanket tariff on all US trading partners—but with one exception: China. In a strategic move, he granted 90-day tariff relief to all countries, except China.
Shifting Trade Patterns
China’s outreach in Southeast Asia is also about supply chains and influence. During Trump’s first term, many Chinese manufacturers rerouted operations to Vietnam and Malaysia to sidestep U.S. tariffs. That shift helped Vietnam emerge as a key regional manufacturing hub.
In Vietnam, bilateral trade with China reached US$260 billion in 2024, and China became the country’s second-largest investor in early 2025. Yet Vietnam’s main export destination remains the U.S., making its economic diplomacy a tightrope walk.
Malaysia is walking a fine line between two economic giants. In 2024, China-Malaysia trade reached US$206 billion, up 12.7% YoY, with exports to China hitting US$41 billion. The momentum continued into 2025, with nearly US$30 billion traded in the first two months.
At the same time, US-Malaysia trade stood at US$80.2 billion in 2024. US exports rose by 43.5% to US$27.7 billion, while imports to the US from Malaysia hit US$52.5 billion. Malaysia is balancing its key relationships with China, its largest investor, and the US, its primary export market.
Cambodia, meanwhile, is trying to play both sides. Its exports to the U.S. dominate its trade numbers, but Chinese investment and imports continue to rise sharply. The U.S.-Cambodia trade totaled US$13 billion. Cambodia exported $9.9 billion worth of goods to the U.S., while U.S. exports to Cambodia stood at just $321.6 million, leaving Washington with a $12.3 billion trade deficit.
The Bigger Picture
The message is clear from Beijing’s perspective: China wants to solidify its regional dominance, especially in Southeast Asia, a crucial trade partner. Xi’s current tour of Vietnam, Malaysia, and Cambodia—all hit by US tariff threats—offers a well-timed opportunity for China to project itself as a “responsible superpower” and a more stable alternative to Washington’s unpredictability.
But there’s a twist. Analysts warn that the shifting supply chains leave a “China vacuum” that others are eager to fill. Countries like India are now preparing to absorb investment and manufacturing that may move out of China amid rising costs and political risks.
This is no longer just about tariffs. It’s about influence, perception, and long-term alignment. While Trump fires tariff volleys from Washington, Xi is walking red carpets across Asia, meeting leaders, signing deals, and quietly building a regional consensus.
As the tariff war escalates and global supply chains scramble, the world isn’t just watching two giants clash—it’s quietly preparing for a realignment.
- Shubhangi Palve is a defense and aerospace journalist. Before joining the EurAsian Times, she worked for ET Prime. She has over 15 years of extensive experience in the media industry, spanning print, electronic, and online domains.
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