US Allies Pivot Toward China Trade Despite Washington’s Concerns

As U.S. allies across the globe reopen trade and diplomatic channels with Beijing, policy experts warn that these moves for short-term economic relief may come at a strategic cost—giving China deeper leverage in Western economies and undermining Washington’s efforts to maintain a unified approach toward a key rival.

From Canada to Europe and across Asia, a growing number of countries are recalibrating their economic ties with China as trade tensions with the United States intensify. While governments present these engagements as pragmatic and limited in scope, critics argue they risk providing Beijing expanded access to critical Western industries and technologies.

Canada’s recent shift has emerged as the most prominent example of this dilemma. After years of strained relations with Beijing, Prime Minister Mark Carney announced steps last week to reinvigorate trade channels with China, including easing restrictions on Chinese electric vehicles in exchange for relief on Canadian agricultural exports.

The move quickly drew sharp criticism from Washington. President Donald Trump threatened 100% tariffs on Canadian goods if Canada “makes a deal” with China, escalating tensions that have included provocative suggestions that Canada could become America’s “51st state.”

“We don’t know whether Mark Carney signed up that trade agreement because he genuinely believes Canada should align with China, or he’s trying to create some leverage in discussions with President Trump,” noted Gordon Chang, a China analyst. “But in either case, it’s not good for us.”

The trend extends well beyond North America. In Britain, Prime Minister Keir Starmer is making the first visit by a UK leader to Beijing in eight years, seeking to stabilize economic relations after a period of tensions over Hong Kong, espionage concerns, and Chinese investments in critical infrastructure. While British officials characterize the trip as purely economic, critics see it as a troubling willingness to separate security concerns from commercial interests.

“Like it or not, China matters for the UK,” Starmer remarked during his visit, adding it had been “far too long” since a British prime minister traveled to Beijing.

Across continental Europe, similar recalibrations are underway. Germany’s new chancellor, Friedrich Merz, plans to visit China in February, while Finland’s prime minister has already met with Chinese officials in Beijing. Even President Trump himself is expected to travel to China in April.

Asian allies are making similar calculations. South Korea’s President Lee Jae-myung recently called for a “full-scale restoration” of ties with China, highlighting Seoul’s economic dependence on Chinese trade despite deepening security cooperation with the United States and Japan.

Trade analysts suggest these moves reflect economic necessity rather than geopolitical realignment. Chad Bown of the Peterson Institute for International Economics noted that smaller and medium-sized economies facing trade barriers with the United States must find alternative markets.

“If they’re no longer allowed to sell to the U.S. market, they have to sell somewhere else,” Bown explained. “And the other major large economy out there is China.”

Adam Irwin, managing partner at financial investment firm Heligan Group, characterized the situation as strategic hedging: “Allies are clearly deepening commercial ties with Beijing—but this isn’t choosing China over America. It’s hedging, keeping options open while Washington proves unpredictable.”

However, he cautioned about the long-term implications: “When allies diversify trade toward Beijing, their willingness to absorb economic pain in a future crisis diminishes—and that weakens America’s ability to coordinate on issues like export controls, sanctions, and Taiwan.”

Critics argue that renewed engagement with Beijing overlooks the Chinese Communist Party’s extensive control over nominally private companies and the difficulty of reducing economic exposure once established.

Nazak Nikakhtar, a former Trump administration official and China policy expert, warned that Western governments consistently underestimate Beijing’s control over Chinese firms. “What business leaders and government leaders fail to fully acknowledge is that they assume Chinese companies are acting autonomously—and that’s just not the case,” she said.

She described a familiar pattern where Chinese entities target commodity sectors and lower-value industries first, generating revenue that funds moves up the value chain to undercut foreign competitors. Nikakhtar also cited cases where Chinese firms acquired Western companies not to grow them but to extract technology and eliminate competition.

Beyond economic concerns, others warn that allies’ outreach to China has broader implications for global perceptions of U.S. leadership at a moment when Beijing actively promotes narratives of Western decline.

“The images and pictures of all these Western leaders bowing down to Xi Jinping doesn’t help us,” Chang noted, arguing that China increasingly uses trade and diplomacy as tools of information warfare.

As uncertainty around U.S. trade policy continues, Chang concluded, Beijing finds it easier to present itself as a predictable alternative—despite its own restrictive import practices—further complicating Washington’s ability to maintain a united front among allies.