WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
Sun, 09 Mar 2025
While China has spent the past 12 years growing its friend circle through its $1 trillion Belt and Road infrastructure program, the U.S. has struggled to come up with a comprehensive response. Could President Trump’s more aggressive approach to diplomacy mean Beijing will meet greater resistance, or will it open more doors for Xi Jinping? In the final episode of our three-part series, “Building Influence,” WSJ reporter Vera Bergengruen, Harvard Kennedy School’s Rana Mitter and the Council on Foreign Relations’ David Sacks discuss how the U.S. has tried to push back on Beijing's expanding footprint so far, and former Trump administration officials J. Peter Pham and David Malpass weigh in on how the president could counter China. Daniel Bach hosts. Check out the full series, or catch up on the first and second parts. Further Reading: How China Capitalized on U.S. Indifference in Latin America How the U.S. Is Derailing China’s Influence in Africa Why Trump Sees a Chinese Threat at the Panama Canal, and Locals Don’t A New Chinese Megaport in South America Is Rattling the U.S. How Much the U.S. Spent on Foreign Aid—and Where It Went Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: How has China expanded its influence through the Belt and Road Initiative?
Panama, where China had been building influence through its Belt and Road Initiative, the trillion-dollar infrastructure lending program Beijing has used to plant its flag in more than 150 countries. Trump's vow to seize back the canal and push out China is part of a broader and still evolving approach to counter Beijing in places where a lack of U.S.
presence or interest has allowed a new partner to move in. I'm Luke Vargas for The Wall Street Journal. And in today's final episode of our What's News Sunday series, Building Influence, my colleague Daniel Bach will be looking at what the U.S. has done to respond to Belt and Road and whether Trump's early actions in office could signal a new, more aggressive approach.
Chapter 2: What is President Trump's strategy concerning China's influence in Panama?
China's involved with the Panama Canal. They won't be for long. And that's the way it has to be. Marco just got back, as you know. He's in the process of...
In the early days of Donald Trump's second term, he dispatched America's top diplomat, Secretary of State Marco Rubio, to a surprising place for a first trip abroad. Panama in Central America became ground zero for Trump's plan to hit back at China's growing influence in America's backyard.
4% of global trade is ferried along Panama's 50-mile canal between the Pacific and Atlantic Oceans, and Trump was threatening to take control of it. The significance of the decision was clear. Panama was the first Latin American nation to officially join Beijing's Belt and Road Initiative back in 2017.
That same year, it dropped its diplomatic recognition of Taiwan in favor of establishing ties with China. Since then, China's built or financed a canal bridge, a new subway line, a cruise ship terminal, a convention center, and a wind energy farm there.
It's those projects, along with port infrastructure, that a Hong Kong-based company has operated on either side of the canal that Trump says violate U.S.-Panama treaties, treaties that required the canal to remain neutral after it was turned over by the U.S. a quarter century ago.
Just this past week, word came that a group of investors led by BlackRock had agreed to buy majority stakes in the ports for about $23 billion. A change in ownership could go a long way toward addressing the administration's concerns, though an executive from the port's Hong Kong owner said the deal was purely commercial. As for those U.S.
concerns, in an interview with Fox News, Rubio said that Chinese-owned infrastructure gives Beijing leverage over the waterway.
We cannot continue to have the Chinese and through their companies exercising effective control of the canal area.
Before he left for a five-country tour through Central America, Rubio wrote in a Wall Street Journal op-ed that the Chinese Communist Party uses economic and diplomatic pressure, including at the canal, to, quote, turn sovereign nations into vassal states.
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Chapter 3: How did Panama respond to U.S. pressure to cut ties with China?
China's foreign ministry says Beijing respects Panama's sovereignty over the canal and that China has never participated in managing and operating it. But Trump ratcheted up the rhetoric, saying if Panama doesn't limit China's influence... We're going to take it back or something very powerful is going to happen. Trump got a lot of pushback. Panamanian officials and several former U.S.
military officials, including a former NATO commander, say Chinese-built infrastructure there doesn't breach the canal's neutrality, let alone show that Panama's come under the influence of Beijing. But journal reporter Vera Bergen-Gruen was on the Latin America trip with Rubio, and she says the administration's threats were heard loud and clear.
When Rubio arrived in Panama City, he came with an ultimatum from Trump. And he told Panama's president, José Raúl Molina, that his country either had to curb China's presence around the Panama Canal or face some kind of unspecified response from the U.S. But behind closed doors, we were told that it was actually a very productive meeting.
And Panamanian officials were really eager to show the Trump administration that they were willing to curb Chinese influence and welcome all kinds of U.S. investment in the country.
The biggest outcome of all of this? Molino announced that Panama will leave the Belt and Road program when its funding agreement with China expires and will also seek to end the deal sooner.
And it was a big concession for his government. But it's important to remember that Molino is a very pro-U.S. president who's very eager to align his country with the U.S. over China. And this kind of strong-arming tactic may not be as productive with leaders who have a warm relationship with Beijing.
I reached out to the State Department, and a spokesperson told me Panama's exit from Belt and Road proves the Trump administration's approach to diplomacy works. It's too soon to say what Panama leaving the program will mean in practice. It's hard to imagine any small nation completely turning its back on the world's second biggest economy.
As for whether Washington would pressure other countries to cut ties with Beijing or its investments as a condition of working more closely with the U.S., the State Department declined to comment. After the break, we'll hear why past efforts by the West to counter Belton Road have been slow to get off the ground.
As China has backed more and more projects in the developing countries across Africa, Asia, and Latin America, often referred to as the Global South, the U.S. has struggled to respond. Rana Mitter teaches U.S.-Asia relations at the Harvard Kennedy School in Massachusetts.
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Chapter 4: What are the U.S. and Western countries doing to counter China's Belt and Road Initiative?
There is a consensus that the United States should not try to match China dollar for dollar around the world. That's just not a game we can play and that we can win it. So if China is building a road of We're not going to say we will build this road in a neighboring country for cheaper or the same price. We just don't have that advantage.
We don't have that kind of state-backed support that China can bring to the table. So the question is really, what are the strategic sectors that we should compete in? And I think that the Lobito corridor shows that.
The 800-mile Libido Corridor Railway runs through Angola, and a plan to upgrade and extend it backed by the U.S. and Europe has been hailed by U.S. officials as a blueprint for how Washington can counter China's infrastructure push in Africa. Angola's received more infrastructure loans from China than any other country in Africa, over $45 billion in total, including for constructing railways.
But years of neglect left the Lobito Railway with rundown stations, equipment that local operators didn't know how to use or fix, and parts of the tracks disappearing into long grass. That opened the door for Washington to gain a bigger foothold in 2022, when Angola rejected a Chinese bid to refurbish the railway in favor of a plan from a European consortium backed by the U.S.,
During his presidency, Joe Biden made shoring up commercial ties with Africa a policy priority.
Because the United States understands how we invest in Africa is just as important as how much we invest in Africa.
That was Biden last December, when he traveled to Angola on his last foreign trip as president. On that trip, he announced more than $560 million in new funding for the Lobito Corridor, bringing total U.S. investment in it to over $4 billion. So what's the upshot for the West? The U.S.
and European investment will help connect a copper-rich region of Zambia and the copper, lithium, and cobalt mines of the Democratic Republic of Congo with the port city of Libido on Angola's Atlantic coast. That'll allow the U.S. to access the critical minerals trade in the region, something China has dominated, and speed up the transport of those green energy minerals from the source.
A few months ago, the DRC sent the first copper shipment on this railway for transit onward to the United States.
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Chapter 5: Why is it challenging for the U.S. to compete with China's global financial influence?
The USAID organization in the United States is being stripped down to bare bones by Donald Trump's administration.
The $40 billion agency helps some 130 countries fight famines, diseases, and human trafficking. Many lawmakers, including Republicans, say it's a crucial soft power tool in combating Beijing. As we heard in episode one of this series, Marco Rubio has long warned of dangers posed by China's Belt and Road program. And as a U.S. senator, he spent years praising U.S. aid as a way of countering China.
Here he was speaking at an event hosted by the Washington Institute for Near East Policy in 2013.
We don't have to give foreign aid. We do so because it furthers our national interests. That's why we give foreign aid.
But almost overnight, President Trump gutted U.S. aid, saying its work doesn't align with American interests and leaving Rubio to preside over a vastly reduced assistance program. Foreign aid workers and some Democrats say they worry that the void left by U.S. aid cuts will push countries into China's arms. The State Department declined to comment.
In its annual report ahead of November's election, a commission of security and economic experts convened by Congress said that to counter China's ambitions, there was a need for a, quote, "...clearly coordinated U.S.-led effort to build a coalition of like-minded countries."
So far, Trump seems to be going down a different path, primarily focusing on extracting from other countries concessions that serve American interests, like agreements with Colombia and Venezuela to take in deportees or pushing for a mineral rights deal with Ukraine. David Malpass, a former World Bank president and U.S.
Treasury official in Trump's first administration, says the president's approach, which emphasizes negotiating, could help put China on the back foot.
The U.S. has an opportunity to really push back on China by working through a changed framework for international organizations. They can't have the rules set up for the benefit of China. And that enters Trump's wheelhouse. That's renegotiating bad deals. And that would give the U.S. a more level playing field in dealing with China in developing countries.
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