The trade policies of the United States under the new Trump administration have been characterized by aggressive tariff measures and a confrontational approach toward not only China, but also key trading partners, including Canada, Mexico, and EU. While Canada, Mexico, and EU have been deeply unsettled by Trump’s tariff threats, China has demonstrated a more composed and resolute stance, adopting a low-profile yet firm position in the face of escalating trade tensions. With the latest round of 20 percent additional tariffs, the average Chinese exports to the United States is up to 33 percent, in comparison to around 3 percent in 2017 before President Trump launched its trade war in his first term. China’s confidence stems from its experience during the first round of the U.S.-China trade war, its successful diversification of foreign trade, and its strategic preparedness for prolonged economic conflicts. In contrast to other affected nations, China is well positioned for a new round of trade war with the U.S.
Unlike Canada and Mexico, China has adopted a calculated and robust approach in response to the U.S. tariff threats. When the Trump administration imposed additional tariffs on Chinese goods recently, Beijing swiftly implemented countermeasures, signalling its refusal to back down. For instance, during the first round of the trade war, China retaliated with tariffs on U.S. agricultural products, targeting politically sensitive sectors and regions. This approach not only demonstrated China’s resolve but also highlighted its ability to inflict precise economic pain on the U.S.
China’s firm stance is also reflected in its rhetoric. In response to Trump’s latest tariff escalations, Chinese officials have emphasized their readiness for a prolonged conflict. A recent statement from Beijing encapsulates this attitude: “If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.” This defiant statement underscores China’s confidence in its economic resilience and strategic preparedness.
China’s confidence in facing a new round of trade war is rooted in its experience during Trump’s first term. The initial trade war, which began in 2018, saw both countries imposing tens of billions of dollars in tariffs on each other’s goods. While the U.S. aimed to reduce its trade deficit and pressure China into making structural economic reforms, China responded with a combination of retaliatory tariffs, domestic stimulus measures, and efforts to diversify its trade relationships.
China’s strategic responses during the first round of the trade war were carefully calibrated to minimize economic disruption while maximizing political and economic leverage. China’s retaliatory tariffs were targeted at politically sensitive U.S. sectors, such as agriculture, which disproportionately affected states that were key to Trump’s electoral base. This approach not only demonstrated China’s ability to inflict economic pain on the U.S. but also highlighted its strategic use of tariffs as a tool for political pressure.
Despite of lacking experience in dealing with a unpredictable Trump administration, Beijing was able to quickly adapt to the challenges posed by the trade war. For instance, during the height of the trade tensions in 2019, China implemented a series of domestic stimulus measures, including tax cuts and increased infrastructure spending, to offset the impact of U.S. tariffs on its economy. These measures helped stabilize China’s economic growth and demonstrated its capacity to withstand external economic pressures.
One of the key lessons China learned from the first round of the trade war was the importance of reducing its reliance on the U.S. market. In fact, the Biden administration not only did not abolish any first term Trump tariffs on Chinese goods but expanded the trade war to the sphere of technology war. This led to China’s determination to actively pursued trade diversification since 2018, strengthening economic ties with countries in Asia, Europe, and Africa. For example, China’s Belt and Road Initiative (BRI) has expanded infrastructure and trade links with over 140 countries. For the first time in 2024, countries participating in the BRI accounted for more than 50 percent of China’s total foreign trade value, with the figure reaching 50.3 percent. China has created alternative markets and supply chains, further reducing its vulnerability to U.S. economic pressure. Additionally, China has deepened its integration with regional trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP), further solidifying its position in the global economy.
China’s success in diversifying its foreign trade has been a critical factor in its preparedness for a new round of trade war. By reducing its dependence on the U.S. market, China has effectively mitigated the potential impact of U.S. tariffs. According to 2024 data from China’s General Administration of Customs, trade with the U.S. accounted for 10.8 percent of China’s total trade, down from 14.2 percent in 2017. Meanwhile, China’s trade with ASEAN countries has grown significantly, making ASEAN China’s largest trading partner, accounting for 16.2 percent of China’s total trade in 2024, up from 12.5 percent in 2017.
China’s trade diversification is also evident in its overall trade shares. In 2024, China’s total trade volume reached $6.8 trillion, with exports accounting for $3.9 trillion and imports for $2.9 trillion. The U.S. remains an important trading partner, but its relative share has declined as China has expanded trade with other regions. For instance, China’s trade with the European Union (EU) reached $890 billion in 2024, making the EU China’s second-largest trading partner. Similarly, China’s trade with Africa grew steadily, reaching $280 billion in 2024, reflecting a 10% year-on-year increase.
Another critical indicator of China’s trade resilience is the role of foreign trade in its GDP. In 2024, China’s total trade (exports plus imports) accounted for approximately 37 percent of its GDP, down from 65 percent in the early 2000s. This decline reflects China’s shift toward a more domestically driven economic model, reducing its vulnerability to external shocks. By comparison, the U.S. trade-to-GDP ratio was 25 percent in 2024, highlighting China’s relatively higher integration into global trade networks despite its efforts to diversify.
China has also strategically targeted sectors where it holds a competitive advantage, such as electronics, machinery, and rare earth minerals. By leveraging its dominance in these sectors, China has been able to effectively counter U.S. tariffs. For instance, China’s control over rare earth minerals, which are critical for high-tech industries, gives it significant leverage in trade negotiations. In 2024, China accounted for 70 percent of global rare earth production and 90 percent of global rare earth processing capacity, making it a key player in the global supply chain.
Additionally, China has bolstered its domestic industries through policies like “Made in China 2025,” which aims to achieve self-sufficiency in high-tech sectors. This strategy has reduced China’s reliance on U.S. technology and positioned it as a global leader in industries such as 5G, artificial intelligence, and renewable energy. China’s investment in research and development (R&D) has surged, with the country now accounting for over 25 percent of global R&D spending. This emphasis on innovation has enabled China to reduce its reliance on foreign technology and enhance its competitiveness in key sectors such as semiconductors, artificial intelligence, and green energy. As a result, many Chinese academics and policy makers are now claiming to be able to stand against additional 40 to 60 percent of U.S. tariffs on its exports.
In stark contrast to China’s diversified trade portfolio, Canada and Mexico remain heavily reliant on the U.S. market, making them far more vulnerable to Trump’s tariff threats. Trade accounts for about 70 percent of both Canada’s and Mexico’s GDP, compared to 37 percent for China. This overwhelming dependence on trade, particularly with the U.S., leaves their economies highly susceptible to U.S. economic policies.
Mexico’s dependence on the U.S. is particularly pronounced. More than 80 percent of Mexico’s exports—including cars, machinery, fruits, vegetables, and medical equipment—are destined for the U.S., accounting for 15 percent of total U.S. imports. This dependence is especially acute in Mexico’s northern border states, such as Chihuahua, Coahuila, Nuevo León, and Baja California, which account for nearly half of Mexico’s exports to the U.S. These states export over $200 billion worth of computers, electronics, transportation equipment, and other products annually.
A unilateral 25 percent tariff on these goods could slash Mexico’s GDP by 16 percent, according to Bloomberg Economics. The automotive industry, which sends 80 percent of its production (2.5 million vehicles annually) to the U.S., would bear the brunt of the impact. Additionally, Mexico’s energy sector would suffer, as the U.S. receives 60 percent of Mexico’s petroleum exports, mostly crude oil bound for U.S. refineries. At the same time, Mexico is the top destination for U.S. refined oil exports, meeting over 70 percent of domestic demand. Tariffs would likely raise fuel prices, straining Mexico’s broader economy.
Canada faces a similar challenge. The U.S. purchases more than 70 percent of Canada’s exports, which account for 14 percent of total U.S. imports. Under new tariffs, Canada’s energy sector would take the biggest hit, as 80 percent of its oil exports go to the U.S. This asymmetry in trade dependence gives the U.S. significant leverage over its North American partners in negotiations.
The impact of Trump’s trade wars has been significant for all parties involved, but the outcomes vary depending on their economic resilience and strategic preparedness. According to 2024 analysis by the Council on Foreign Relations, the U.S.-China trade war led to a 0.5% percent reduction in U.S. GDP and a 0.8 percent reduction in China’s GDP by 2024. However, China’s ability to diversify its trade and stimulate domestic consumption has mitigated some of these losses, while the U.S. has faced higher costs for consumers and businesses due to tariffs. China’s focus on expanding trade with emerging markets and investing in high-tech sectors has provided a buffer against U.S. tariffs. For example, China’s trade with RCEP member countries grew by 12 percent in 2024, offsetting some of the losses from reduced trade with the U.S.
For Canada and Mexico, the impact of Trump’s trade policies has been more severe. A March 2025 report by CNN highlights that Trump’s tariffs on Canadian and Mexican goods have pushed both economies toward recessionary conditions. In 2024, Canada’s GDP growth slowed to 1.2 percent, down from 2.3 percent in 2023, while Mexico’s GDP growth fell to 1.5 percent, down from 2.8 percent in 2023. The tariffs have also disrupted supply chains, particularly in the automotive and manufacturing sectors, which are critical to both economies.
The outcomes of Trump’s trade wars are likely to be mixed. While the U.S. may succeed in pressuring weaker trading partners like Canada and Mexico, its confrontational approach toward China is unlikely to yield significant concessions. China’s economic resilience, strategic diversification, and willingness to engage in a prolonged conflict make it a formidable adversary. Moreover, since the first round of the trade war, the global economic landscape has shifted, with China playing an increasingly central role in global supply chains and international trade.
For the U.S., the trade wars have come at a cost. Tariffs on Chinese goods have led to higher prices for American consumers and businesses, while retaliatory tariffs have hurt U.S. exporters, particularly farmers. The uncertainty created by Trump’s trade policies has also undermined business confidence and investment. Trump’s personal approval rating is already dipping while inflationary pressure is building up. Ironically, Trump may have to face the five questions that Chinese Minister of Foreign Affairs Wang Yi raised regarding the U.S. trade war on China in his recent press conference: “What has it achieved from tariff and trade wars these years? Has its trade deficit widened or narrowed? Has its manufacturing become more competitive or less competitive? Has U.S. inflation gone up or down? Has the life of its people got better or worse?”
The wider implications of the U.S. trade war against all are the prospects of a crashing stock market, uncertainty of investors, lack of confidence in the U.S. leadership, economic recession, and U.S. isolation in global affairs. Traditional U.S. allies, now no longer trust the leadership in Washington, may seek alternative partners in responding to the U.S. threats and coercion, leading to profound realignment of the postwar international system.
China’s preparedness for a new round of trade war with the U.S. reflects its strategic foresight and economic resilience. By diversifying its trade relationships, leveraging its competitive advantages, and adopting a firm stance, China has positioned itself to withstand U.S. economic pressure. In contrast, Canada and Mexico’s heavy reliance on the U.S. market has left them more vulnerable to Trump’s tariff threats. While the U.S. may achieve short-term gains in its trade disputes, the long-term consequences of its confrontational approach are likely to be detrimental to its economic interests. As the global economic order continues to evolve, China’s strategic preparedness and adaptability will remain key factors in shaping the outcomes of future trade conflicts.
China’s ability to reduce its dependence on the U.S. market, expand trade with emerging economies, and strengthen its domestic industries underscores its readiness for a prolonged trade war. This resilience, combined with its growing influence in the global economy, ensures that China will remain a formidable opponent in any future trade conflict. Meanwhile, Canada and Mexico’s high dependence on the U.S. market leaves them with limited options, highlighting the stark contrast in their ability to navigate the challenges posed by Trump’s trade wars. This may also explain the fact that while most partners of the U.S. are busy lining up to visit Washington D.C., President Trump is reportedly making arrangements to visit China as early as next month.
The Western powers have failed to effectively manage the increasing threat of proliferation in the Middle East. While the international community is concerned with Iran’s nuclear program, Saudi Arabia has moved forward with developing its own nuclear program, and independent studies show that Israel has longed possessed dozens of nuclear warheads. The former is a member of the treaty on the Non-Proliferation of Nuclear Weapons (NPT), while the latter has refused to sign the international agreement.
On Middle East policy, the Biden campaign had staunchly criticized the Trump administration’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the Iran Nuclear Deal and it has begun re-engaging Iran on the nuclear dossier since assuming office in January 2021. However, serious obstacles remain for responsible actors in expanding non-proliferation efforts toward a nuclear-free zone in the Middle East.
This panel will discuss how Western powers and multilateral institutions, such as the IAEA, can play a more effective role in managing non-proliferation efforts in the Middle East.
Panelists:
– Peggy Mason: Canada’s former Ambassador to the UN for Disarmament
– Mark Fitzpatrick: Associate Fellow & Former Executive Director, International Institute for Strategic Studies (IISS)
– Ali Vaez: Iran Project Director, International Crisis Group
– Negar Mortazavi: Journalist and Political Analyst, Host of Iran Podcast
– David Albright: Founder and President of the Institute for Science and International Security
Closing (5:45 PM – 6:00 PM ET)
What is the current economic landscape in the Middle East? While global foreign direct investment is expected to fall drastically in the post-COVID era, the World Bank reported a 5% contraction in the economic output of the Middle East and North African (MENA) countries in 2020 due to the pandemic. While oil prices are expected to rebound with normalization in demand, political instability, regional and geopolitical tensions, domestic corruption, and a volatile regulatory and legal environment all threaten economic recovery in the Middle East. What is the prospect for economic growth and development in the region post-pandemic, and how could MENA nations promote sustainable growth and regional trade moving forward?
At the same time, Middle Eastern diaspora communities have become financially successful and can help promote trade between North America and the region. In this respect, the diaspora can become vital intermediaries for advancing U.S. and Canada’s business interests abroad. Promoting business diplomacy can both benefit the MENA region and be an effective and positive way to advance engagement and achieve foreign policy goals of the North Atlantic.
This panel will investigate the trade and investment opportunities in the Middle East, discuss how facilitating economic engagement with the region can benefit Canadian and American national interests, and explore relevant policy prescriptions.
Panelists:
– Hon. Sergio Marchi: Canada’s Former Minister of International Trade
– Scott Jolliffe: Chairperson, Canada Arab Business Council
– Esfandyar Batmanghelidj: Founder and Publisher of Bourse & Bazaar
– Nizar Ghanem: Director of Research and Co-founder at Triangle
– Nicki Siamaki: Researcher at Control Risks
The Middle East continues to grapple with violence and instability, particularly in Yemen, Syria and Iraq. Fueled by government incompetence and foreign interventions, terrorist insurgencies have imposed severe humanitarian and economic costs on the region. Meanwhile, regional actors have engaged in an unprecedented pursuit of arms accumulation. Saudi Arabia and the United Arab Emirates have imported billions of both Western and Russian-made weapons and funded militant groups across the region, intending to contain their regional adversaries, particularly Iran. Tehran has also provided sophisticated weaponry to various militia groups across the region to strengthen its geopolitical position against Saudi Arabia, UAE, and Israel.
On the other hand, with international terrorist networks and intense regional rivalry in the Middle East, it is impractical to discuss peace and security without addressing terrorism and the arms race in the region. This panel will primarily discuss the implications of the ongoing arms race in the region and the role of Western powers and multilateral organizations in facilitating trust-building security arrangements among regional stakeholders to limit the proliferation of arms across the Middle East.
Panelists:
Luciano Zaccara: Assistant Professor, Qatar University
Dania Thafer: Executive Director, Gulf International Forum
Kayhan Barzegar: Professor and Chair of the Department of Political Science and International Relations at the Science and Research Branch of Azad University
Barbara Slavin: Director of Iran Initiative, Atlantic Council
Sanam Shantyaei: Senior Journalist at France24 & host of Middle East Matters
The emerging regional order in West Asia will have wide-ranging implications for global security. The Biden administration has begun re-engaging Iran on the nuclear dossier, an initiative staunchly opposed by Israel, while also taking a harder line on Saudi Arabia’s intervention in Yemen. Meanwhile, key regional actors, including Qatar, Iraq, and Oman, have engaged in backchannel efforts to bring Iran and Saudi Arabia to the negotiating table. From a broader geopolitical perspective, with the need to secure its energy imports, China is also expected to increase its footprint in the region and influence the mentioned challenges.
In this evolving landscape, Western powers will be compelled to redefine their strategic priorities and adjust their policies with the new realities in the region. In this panel, we will discuss how the West, including the United States and its allies, can utilize multilateral diplomacy with its adversaries to prevent military escalation in the region. Most importantly, the panel will discuss if a multilateral security dialogue in the Persian Gulf region, proposed by some regional actors, can help reduce tensions among regional foes and produce sustainable peace and development for the region.
Panelists:
– Abdullah Baabood: Academic Researcher and Former Director of the Centre for Gulf Studies, Qatar University
– Trita Parsi: Executive Vice-President, Quincy Institute for Responsible Statecraft
– Ebtesam Al-Ketbi: President, Emirates Policy Centre
– Jon Allen: Canada’s Former Ambassador to Israel
– Elizabeth Hagedorn: Washington correspondent for Al-Monitor
Military interventions, political and economic instabilities, and civil unrest in the Middle East have led to a global refugee crisis with an increasing wave of refugees and asylum seekers to Europe and Canada. Moreover, the COVID-19 pandemic has, in myriad ways, exacerbated and contributed to the ongoing security threats and destabilization of the region.
While these challenges pose serious risks to Canadian security, Ottawa will also have the opportunity to limit such risks and prevent a spillover effect vis-à-vis effective humanitarian initiatives in the region. In this panel, we will primarily investigate Canada’s Middle East Strategy’s degree of success in providing humanitarian aid to the region. Secondly, the panel will discuss what programs and initiatives Canada can introduce to further build on the renewed strategy. and more specifically, how Canada can utilize its policy instruments to more effectively deal with the increasing influx of refugees from the Middle East.
Panelists:
Erica Di Ruggiero: Director of Centre for Global Health, University of Toronto
Reyhana Patel: Head of Communications & Government Relations, Islamic Relief Canada
Amir Barmaki: Former Head of UN OCHA in Iran
Catherine Gribbin: Senior Legal Advisor for International and Humanitarian Law, Canadian Red Cross
In 2016, Canada launched an ambitious five-year “Middle East Engagement Strategy” (2016-2021), committing to investing CA$3.5 billion over five years to help establish the necessary conditions for security and stability, alleviate human suffering and enable stabilization programs in the region. In the latest development, during the meeting of the Global Coalition against ISIS, Minister of Foreign Affairs Marc Garneau announced more than $43.6 million in Peace and Stabilization Operations Program funding for 11 projects in Syria and Iraq.
With Canada’s Middle East Engagement Strategy expiring this year, it is time to examine and evaluate this massive investment in the Middle East region in the past five years. More importantly, the panel will discuss a principled and strategic roadmap for the future of Canada’s short-term and long-term engagement in the Middle East.
Panelists:
– Ferry de Kerckhove: Canada’s Former Ambassador to Egypt
– Dennis Horak: Canada’s Former Ambassador to Saudi Arabia
– Chris Kilford: Former Canadian Defence Attaché in Turkey, member of the national board of the Canadian International Council (CIC)
– David Dewitt: University Professor Emeritus, York University
While the United States continues to pull back from certain regional conflicts, reflected by the Biden administration’s decision to halt American backing for Saudi Arabia’s intervention in Yemen and the expected withdrawal from Afghanistan, US troops continue to be stationed across the region. Meanwhile, Russia and China have significantly maintained and even expanded their regional activities. On one hand, the Kremlin has maintained its military presence in Syria, and on the other hand, China has signed an unprecedented 25-year strategic agreement with Iran.
As the global power structure continues to shift, it is essential to analyze the future of the US regional presence under the Biden administration, explore the emerging global rivalry with Russia and China, and at last, investigate the implications of such competition for peace and security in the Middle East.
Panelists:
– Dmitri Trenin: Director of Carnegie Moscow Center
– Joost R. Hiltermann: Director of MENA Programme, International Crisis Group
– Roxane Farmanfarmaian: Affiliated Lecturer in International Relations of the Middle East and North Africa, University of Cambridge
– Andrew A. Michta: Dean of the College of International and Security Studies at Marshall Center
– Kelley Vlahos: Senior Advisor, Quincy Institute
The security architecture of the Middle East has undergone rapid transformations in an exceptionally short period. Notable developments include the United States gradual withdrawal from the region, rapprochement between Israel and some GCC states through the Abraham Accords and the rise of Chinese and Russian regional engagement.
With these new trends in the Middle East, it is timely to investigate the security implications of the Biden administration’s Middle East policy. In this respect, we will discuss the Biden team’s new approach vis-à-vis Iran, Yemen, Saudi Arabia, and Israel. The panel will also discuss the role of other major powers, including China and Russia in shaping this new security environment in the region, and how the Biden administration will respond to these powers’ increasing regional presence.
Panelists:
– Sanam Vakil: Deputy Director of MENA Programme at Chatham House
– Denise Natali: Acting Director, Institute for National Strategic Studies & Director of the Center for Strategic Research, National Defense University
– Hassan Ahmadian: Professor of the Middle East and North Africa Studies, University of Tehran
– Abdulaziz Sagar: Chairman, Gulf Research Center
– Andrew Parasiliti: President, Al-Monitor
