Xi Jinping with To Lam at Presidential Palace in Hanoi on 14 April. (Photo: AP)
In April 2025, Chinese President Xi Jinping conducted a five-day diplomatic tour of Southeast Asia, visiting Vietnam, Malaysia, and Cambodia from April 14 to 18. The strategically timed visit, Xi’s first overseas trip of the year, occurred amid escalating trade tensions driven by U.S. President Donald Trump’s imposition of tariffs on over 70 countries, including China and the three nations Xi visited. The tour aimed to reinforce China’s economic and diplomatic influence in the region, counter U.S. trade policies, and solidify partnerships within the Association of Southeast Asian Nations (ASEAN).
Xi Jinping arrived in Hanoi on April 14, receiving a ceremonial welcome that underscored the significance of his visit. Over two days, he held discussions with Vietnam’s Communist Party General Secretary To Lam, President Luong Cuong, and Prime Minister Pham Minh Chinh. The visit resulted in approximately 45 cooperation agreements encompassing railway infrastructure, supply chain enhancements, digital economy initiatives, artificial intelligence, green technology, and agricultural exports. A key project highlighted was Vietnam’s pursuit of Chinese investment and expertise for an $8 billion rail link from Haiphong to the China-Vietnam border, aimed at bolstering its infrastructure. In remarks published by Vietnam’s Nhan Dan newspaper, Xi called for both nations to oppose “unilateral bullying” and protect global free trade, a pointed reference to U.S. tariffs. He emphasized deeper industrial and supply chain collaboration, while China offered increased market access for Vietnamese agricultural products, though specifics remained limited.
On April 15, Xi arrived in Kuala Lumpur, where he was welcomed by Prime Minister Anwar Ibrahim and later met with Malaysia’s King Sultan Ibrahim Iskandar. The three-day visit focused on strengthening economic ties, with several memorandums of understanding signed on trade, services, agricultural exports, and the establishment of two industrial parks – one in China and one in Malaysia. Xi advanced discussions on Belt and Road Initiative projects, including a $11.2 billion railway, and proposed an expedited free trade agreement with ASEAN. Addressing a state banquet, Xi positioned China as a reliable partner against “geopolitical confrontation” and “protectionism,” pledging support for Southeast Asia amid global economic challenges. He underscored Malaysia’s pivotal role in ASEAN, highlighting its influence and economic diversification.
Xi concluded his tour in Phnom Penh on April 17, meeting Prime Minister Hun Manet and King Norodom Sihamoni. Cambodia, a steadfast Chinese ally, relies heavily on Chinese investment, with China holding stakes in half of Cambodian businesses exporting to the U.S. While specific agreements were not publicly disclosed, discussions centered on infrastructure, trade, tourism, and technology. A focal point was the $1.7 billion Funan Techo Canal, a proposed link between the Mekong River and the Gulf of Thailand that could reduce Cambodia’s reliance on Vietnamese ports, with China reportedly considering support. Xi reiterated calls to resist “hegemonism” and “protectionism,” reinforcing his consistent message across the tour. Cambodian leaders, including Senate Chairman Hun Sen, expressed strong support for enhanced cooperation, particularly in infrastructure development.
The tour delivered substantial outcomes, reinforcing China’s regional influence. In Vietnam, the 45 agreements are poised to strengthen its manufacturing capabilities and stabilize supply chains amid U.S. tariff disruptions. Bilateral trade, which nearly doubled between 2017 and 2024, saw Vietnam import $30 billion from China and export $31.4 billion to the U.S. in Q1 2025. In Malaysia, the trade and industrial park deals align with China’s strategy to diversify manufacturing bases, mitigating U.S. tariff impacts. Malaysia’s economy, which grew 4.4% year-on-year in Q1 2025, benefits significantly from Chinese investment, with China as its third-largest investor. The proposed ASEAN free trade agreement signals long-term economic integration. In Cambodia, Xi’s visit underscored its dependence on China, which accounts for over a third of Cambodia’s $11 billion foreign debt. The Funan Techo Canal, if realized, could reshape regional trade dynamics. Regionally, Xi positioned China as a stable counterweight to the U.S., leveraging discontent with Trump’s tariff policies. ASEAN, now China’s largest export market, absorbed 17% of China’s exports – $146 billion – in Q1 2025.
Xi’s Southeast Asia tour was driven by a confluence of economic, geopolitical, and strategic imperatives. In early 2025, the U.S. imposed tariffs on over 70 countries, with China facing 145% duties and Vietnam, Malaysia, and Cambodia hit with 46%, 24%, and 49%, respectively, before a 90-day pause for most (excluding China). Xi’s visit sought to mitigate these tariffs’ effects by deepening regional trade ties and discouraging Southeast Asian nations from complying with U.S. demands to curb Chinese transshipment. ASEAN has been China’s top export market since 2023, and Xi targeted Vietnam for its manufacturing prowess, Malaysia for its regional influence, and Cambodia for its loyalty to shield China’s economy from U.S. pressure. The U.S. has pressed Southeast Asian nations to tighten controls on transshipped Chinese goods, such as semiconductors, with Vietnam agreeing to stricter oversight. Xi’s diplomacy offered economic incentives to maintain neutrality. With U.S. markets less accessible, China has redirected exports to ASEAN, where Chinese exports rose 16.6% in Q1 2025. Xi’s infrastructure initiatives, including railways and the Funan Techo Canal, aim to foster long-term economic dependence. By presenting China as a champion of free trade, Xi contrasted Beijing’s consistency with Trump’s volatile “America First” approach, resonating with a region wary of U.S.-China trade war fallout.
Southeast Asian nations face mounting pressure to navigate the U.S.-China rivalry. Vietnam, Malaysia, and Cambodia among others employ a hedging strategy, engaging both powers to maximize economic benefits while preserving autonomy. Vietnam’s dual engagement – signing deals with China while negotiating tariff exemptions with the U.S. – exemplifies this delicate balance. However, this approach carries risks: aligning too closely with China could provoke U.S. sanctions or reduced market access, while strict compliance with U.S. transshipment controls may strain relations with Beijing. Malaysia, as a regional influencer, leverages its ASEAN leadership to advocate for collective neutrality, but its growing economic ties with China may limit its maneuverability. Cambodia’s near-total reliance on China leaves it vulnerable to Beijing’s influence, with little room for diversification. The competing trade policies and geopolitical ambitions of the U.S. and China force these nations to prioritize short-term gains, but long-term alignment decisions could reshape their sovereignty and regional cohesion.
On April 14, Trump characterized Xi’s tour as an effort to undermine U.S. interests, stating, “China and Vietnam are meeting to figure out, ‘how do we screw the United States of America?’” while noting, “I don’t blame China; I don’t blame Vietnam”. His remarks reflect a strategy of isolating China while pressuring other nations to align with U.S. trade objectives. Treasury Secretary Scott Bessent, on the same day, downplayed risks of global economic decoupling, suggesting, “There’s a big deal to be done at some point,” but acknowledged potential decoupling if tensions escalate.
The trade war’s ripple effects are already evident. According to Goldman Sachs report, 36% of U.S. imports from China, valued at nearly $158 billion, are heavily reliant on Beijing, which supplies over 70% of these goods. This dependency highlights the limited short-term flexibility for American importers to find alternative sources. In essence, replacing Chinese goods is a daunting challenge, leaving China in a strategic position to wait out the impact of U.S. tariffs. Chinese customs data reveals a sharp decline in imports from the U.S., with eight out of ten key commodity categories, previously major sources of U.S. export revenue, experiencing significant drops. In March 2025, China’s imports of U.S. goods fell by 9% year-on-year, equivalent to a $1.2 billion reduction.
Specific sectors have been hit hard. U.S. gas exports to China plummeted 1.8 times to $720.5 million, soybean exports dropped nearly 11% to $1.1 billion, and automobile exports crashed 2.8 times. Other declines include copper exports, down nearly twofold to $189 million, cotton fiber exports, which collapsed 12 times to $27.7 million, and semiconductor manufacturing devices, down 25% to $261.3 million. Ethylene polymer imports fell to $245 million, and turbojet engines and gas turbines dropped 8% to $460.8 million.
Considering this situation, Xi’s tour was a calculated response to a shifting global trade landscape. The U.S.’s 145% tariffs on China, compared to paused tariffs for others, isolate Beijing, prompting Xi to secure alternative markets and allies. China’s retaliatory 125% tariffs on U.S. goods and yuan devaluation signal readiness for a prolonged standoff, with Southeast Asia as a critical buffer. ASEAN’s economic significance and manufacturing hubs like Vietnam make it a vital counterbalance to U.S. markets. Xi’s infrastructure focus aims to cement long-term ties. Southeast Asian nations, cautious of choosing sides, face pressure from both powers, with Vietnam’s dual tariff talks and China deals exemplifying this balancing act. Xi’s diplomacy seeks to tip this balance through economic incentives and warnings against U.S. “hegemonism.” Domestically, the tour reinforces Xi’s image as a global leader defending free trade, contrasting with Trump’s unpredictability. Regionally, it addresses concerns about Chinese goods flooding ASEAN markets, reassuring partners like Malaysia of mutual gains.
The geopolitical ramifications of the tour extend beyond immediate trade dynamics, reshaping the global balance of power. The U.S.-China rivalry, intensified by Trump’s tariffs, has elevated Southeast Asia as a pivotal arena for influence, with ASEAN nations caught in a tug-of-war between two superpowers. China’s proactive diplomacy, exemplified by Xi’s tour, signals a long-term strategy to anchor its influence in the Global South, leveraging economic incentives to counter U.S. containment efforts. This approach risks escalating tensions, as the U.S. may respond with increased military or economic pressure in the region, potentially destabilizing ASEAN’s neutrality. Furthermore, China’s emphasis on infrastructure and trade agreements strengthens its soft power but raises concerns about debt-trap diplomacy, particularly in nations like Cambodia. The tour also underscores a broader shift toward a multipolar world, where middle powers like Malaysia and Vietnam gain leverage by balancing relations with both the U.S. and China, potentially diluting Western influence in Asia.
China’s response to U.S. tariffs, as articulated by its leadership, has been resolute, signaling an unwillingness to yield. Beijing is expected to intensify pressure on U.S. businesses in China, potentially excluding American firms from major tenders within the country. Further tariff increases are likely if the U.S. escalates its duties, raising the question of which economy can endure the prolonged strain. China has initiated a devaluation of the yuan, adopting a multifaceted approach to the trade conflict. This suggests a protracted U.S.-China standoff, with China holding a range of measures to demonstrate its readiness to compete until rational negotiations commence. Eventually, both sides appear to anticipate talks. China’s actions, including Xi’s tour, underscore its commitment to robust opposition, with hopes for tariff negotiations. However, expectations of significant tariff reductions or cancellations are unrealistic, as the trade conflict is set to persist. The U.S. is testing China’s resolve, and Beijing has shown it is prepared for a firm response.
As both the United States and China vie for influence, Xi Jinping's tour underscores China's readiness for a prolonged economic rivalry, with Southeast Asia emerging as a critical battleground. Given the lasting impact of Trump’s tariff policies, there is a high likelihood that China will be positioned to fill the void left by shifting U.S. trade dynamics in the region.
Donald Trump’s tariff policies have far-reaching consequences for both international relations and domestic sentiment. A CBS News poll conducted in April 2025 highlighted widespread domestic dissatisfaction, with 53% of Americans disapproving of Trump’s presidency, 56% expressing discontent with his economic management, and 53% believing the U.S. economy was worsening. Further compounding these concerns, CNN’s 100-day poll revealed that only 22% of respondents trusted Trump’s policies, marking the lowest approval rating for a president’s first 100 days in the past 70 years.
Recently, Trump acknowledged that the 145% tariff on Chinese goods may be excessive and announced plans to lower, but not eliminate, these duties. Emphasizing his “excellent relationship” with Chinese President Xi Jinping, Trump expressed optimism about reaching a trade agreement. He reiterated that his administration is negotiating with China on trade issues, despite official denials from Beijing. Speaking at a meeting with the Norwegian Prime Minister, he mentioned "talks held this morning." Trump did not specify who was involved. Both China’s Ministry of Commerce and the Foreign Ministry refuted Trump’s claims.
The visit of a Chinese delegation to IMF and World Bank meetings in the U.S. provided the first opportunity for in-person contacts since new tariffs were imposed. However, no official reports of bilateral talks have emerged.
Meanwhile, the broader implications of this trade conflict are stark. The World Trade Organization projects a 77% decline in Chinese exports to the U.S. in 2025. However, China is poised to offset this loss with increased exports elsewhere: 25% growth to North America (excluding the U.S.), 9% to South America, 6% to Asia, Europe, and the Middle East, 5% to Africa, and 4% to least-developed countries. At that time, U.S. imports are expected to shift significantly by the end of 2025. Imports from the Middle East are projected to rise by 22%, from Europe by 5%, and from Asia (excluding China) by 2%. These trends underscore the profound reconfiguration of global trade flows as the U.S.-China trade war continues to unfold.
The U.S.-China trade war is fundamentally reshaping global supply chains, with Southeast Asia at the epicenter. The redirection of Chinese exports to ASEAN reflects a strategic pivot to regional markets, reducing reliance on the U.S. This shift benefits Vietnam and Malaysia as manufacturing hubs but strains smaller economies like Cambodia, which lack the capacity to absorb Chinese goods. Long-term, ASEAN’s integration into China’s supply chains – through projects like Vietnam’s rail link and Malaysia’s industrial parks – could create a China-centric economic bloc, challenging Western-dominated trade networks. However, this risks overcapacity and market saturation, potentially destabilizing smaller economies. Globally, the trade war accelerates supply chain fragmentation, with U.S. imports shifting to the Middle East and Europe, where Trump has more chances to succeed. Smaller ASEAN nations, unable to compete with Vietnam’s manufacturing scale, may face marginalization, while rising costs from tariffs disrupt global trade efficiency, impacting consumers and businesses worldwide. Yet, there is speculation that the U.S. could reduce the current 145% tariffs on Chinese goods, potentially easing trade tensions. However, with Trump’s unpredictable policy, the likelihood of swift trade stabilization is under doubt.
