Trump's Tariffs Are Helping Push U.S. Allies into China's Arms and Undermining National Security

Last week, British Prime Minister Keir Starmer visited Chinese President Xi Jinping. This is the first time a British PM visited since 2018. The purpose of this visit was to reset Sino-British relations. One of the topics of discussion at this visit was trade. If this were an isolated incident, that would be one thing. But other Western nations are initiating trade talks with China. Last month, Canada struck a new trade deal with China. Finland, Ireland, and Germany are also re-engaging with China. There are multiple reasons for other Western countries to re-engage with China, whether it is economic development, access to a large consumer market, investment flows, or shifting geopolitics. 

Unpredictable U.S. Foreign Policy Adds Fuel

Those shifting geopolitics are particularly notable. In the last month alone, the Trump administration has captured Nicolás Maduro and threatened allies with tariffs in order to chase his dream of annexing Greenland, the latter of which is categorically unwise. Trump's foreign policy unpredictability creates incentives to hedge against an increasingly unreliable ally, which is hardly unsurprising seeing more Western countries gravitate towards China. One major factor that I would like to cover today is Trump's tariff policy and how that is becoming a turnoff for the US' allies. I will caveat by saying tariffs alone do not explain why other countries are re-engaging with China, but it is a major element that is part of the broader drive towards a pivot, as this analysis from the Chatham House details. 

Trade Diversion: Another Form of Tariffs Backfiring

The sad part is that this pivot is wholly predictable. I have talked about trade retaliation before here at Libertarian Jew. There is direct retaliation, which is when a country responds to tariffs by implementing their own tariffs in response. Then there is indirect retaliation, such as trade diversion. Trade diversion is what happens when tariffs or other trade barriers cause countries to shift imports and exports away from the most efficient or preferred trading partner toward alternative countries simply to avoid higher costs. Under trade diversion, the trade does not disappear but rather gets rerouted. 

Historical Evidence of Trade Diversion

Trade diversion has played out in history more than once. During the 1930s with Smoot-Hawley, a National Bureau of Economic Research (NBER) paper shows how U.S. exports to retaliating countries fell by 28-33 percent, and trade diversion also occurred. Another NBER paper discovered trade diversion as a result of US agricultural tariffs from 1990 to 2014. In Trump's first term, tariffs on China caused China to divert $21 billion of trade flows away from the United States to other countries (see below). In its 2025 paper on responses to Trump's tariffs, the International Monetary Fund (IMF) recognizes trade diversion as a response. Additionally, a study from the North American Journal of Economics and Finance shows how the signing of NAFTA and preferential tariff treatment with Mexico and Canada shifted US imports away from Asian sources toward Mexico. 

Trump's Tariff Strategy and Consequences for National Security

Trump's current trade strategy fits within this historical pattern of trade diversion. The problem is that Trump's posture on tariffs will continue to agitate U.S. allies and make it more attractive for some allies to deepen their economic ties with China. What Trump seems to not understand is that national security is not merely about what the U.S. can produce, but also the allies that one can rely on in times of crisis or need. Research shows that economic cooperation lends itself to stronger security cooperation.

Since tariffs make allies economically worse off, they are incentivized to look elsewhere. Having these allies increase trade and investment with China will create increased strategic dependence on China. What is more is that this re-engagement will mean that U.S. allies will invest more in China and Chinese suppliers. This entanglement with the Chinese economy will make U.S. allies less likely to align with U.S. strategic priorities. When allies rely more on China, China gains leverage and the U.S. will have less influence in trade negotiations, diplomacy, and security concerns abroad. This will undermine U.S. influence, which in turn weakens U.S. national security. 

"America First" Becomes "America Alone"

Trump's tariff strategy ultimately defeats its own stated purpose. Trump is not isolating China or strengthening American security. He is weakening the very alliances that give the United States leverage on the global stage. With a tariff-first approach, Trump is treating allies as economic adversaries, which understandably leads allies to diversify their trading partners more, including toward China. As allies partner more with China, the United States loses its global influence. National security is not only about domestic production, but also partners who share risks, supply chains, and strategic goals. By undermining these foundations, Trump is handing China geopolitical leverage. By alienating allies and strengthening a rival, "America first" becomes "America alone" while China has the last laugh.