Trump’s Trade Deals Offer Alternative to China’s Debt Trap Diplomacy

As the United States and China work to hammer out a new trade deal, Beijing is plowing ahead with its so-called “Belt and Road Initiative” (BRI), a debt-trap diplomacy scheme dressed up as an international infrastructure program. But as President Donald Trump forges new agreements with other nations and reorients the global economy toward the United States, it may undermine Chinese President Xi Jinping’s grand ambitions – and create more leverage for Trump and his team as they negotiate with the Chinese.

Launched in 2013, the BRI is often described as a “modern Silk Road,” aimed at connecting China to Africa, the Middle East, and Europe through massive infrastructure projects. But unlike the ancient Silk Road that facilitated free-flowing trade, the BRI is about control, not commerce. Through opaque contracts and predatory lending, China has used the BRI to ensnare vulnerable nations in unsustainable debt, then leverage that debt for political and strategic gain.

Despite being branded as a development initiative, the BRI is primarily a tool for exporting China’s industrial overcapacity, especially in steel, cement, and construction materials, while simultaneously internationalizing the Yuan and expanding China’s military footprint. Nearly every project carries a dual-use character, combining civilian infrastructure with strategic or military applications.

As Dr. Gaoxiang Wong, a retired political economy professor who defected from China, put it, “Deng Xiaoping envisioned a new venture capital system for developing economies, but Xi Jinping has distorted this vision by rejecting competition in favor of socialist planning.” He described the BRI as “a fat chimera with little chance of success,” warning that it could lead developing countries to financial ruin.

Dr. Derek Scissors, chief economist at China Beige Book, similarly noted that while BRI figures appear impressive, much of the activity is simply promises of investment. “Building takes longer than investing,” he said. In other words, BRI may look like global expansion, but in reality, it’s often just a slow-moving transfer of Chinese overproduction to weaker economies.

Nonetheless, a new report from the Green Finance & Development Center in Beijing and Griffith University in Australia revealed that BRI contracts totaled $124 billion in the first half of 2025 alone – already exceeding the $122 billion total for all of 2024. Several of the deals were “megadeals” exceeding $10 billion in value, signaling that Beijing is ramping up the initiative with renewed intensity.

One particularly worrisome project is a quantum communication line more than 6,000 miles long between China and South Africa. Last year, a PLA publication described the line as “an alternative to undersea cables,” for which “the West has no alternative.”

Some in the media claim that Trump’s aggressive trade agenda has created space for China’s BRI expansion. But that narrative falls apart when you look at the facts. In just the past few days, Trump announced a sweeping new trade deal with the European Union, which will boost investment, balance trade, and strengthen transatlantic economic ties. That announcement came on the heels of a major U.S.–Japan agreement, and more negotiations are underway with other allies.

These aren’t symbolic gestures. They’re massive financial commitments. Since returning to office, President Trump has helped secure more than $5.2 trillion in foreign investment into the United States. That capital reflects growing confidence in America’s future and an understanding that fairness in trade leads to lasting prosperity for all partners.

Meanwhile, China is facing a crisis of confidence. In 2024 alone, a record $168 billion in capital fled the country – the largest outflow since 1990. Foreign direct investment fell to just $4.5 billion, down from $163 billion in 2020. Far from projecting strength, China is struggling to retain global interest.

The contrast could not be clearer. While China uses its money to trap poor countries in a cycle of dependency, Trump is using trade as a tool to empower American workers and build reciprocal partnerships around the globe. As the saying goes, a rising tide lifts all boats.

BRI’s problems are only becoming more obvious. China has lent more than $1 trillion to over 150 countries – many of them among the poorest in the world. In 2024 alone, those nations were expected to repay two-thirds of $35 billion owed to Beijing. China is now the largest official creditor to 53 countries and among the top five for two-thirds of the world’s most vulnerable economies.

A recent report from the Lowy Institute found that China has shifted from being a lender of new capital to the world’s largest destination for debt service payments from developing nations. These payments often come at the expense of essential services like health care, education, and poverty alleviation. Restructuring requests and pleas for relief have gone unanswered. As the Lowy report put it, “The high debt burden facing developing countries will hamper poverty reduction and slow development progress while stoking economic and political instability risks.”

That’s exactly the point. The BRI isn’t about development; it’s about control. As Dr. Shufen Yóulǎn, a former CCP lecturer and defector, remarked, “This idea benefits the Party, not the people. Each year, under the CCP means people are worse off.”

Inside China, the economic picture is just as grim. Xi Jinping’s latest Five-Year Plan promised prosperity and rejuvenation. Instead, China is dealing with plummeting birth rates, soaring youth unemployment, and a collapsing investment climate. In 2024, the birth rate had declined by over two million in a single year – the sharpest drop since the Great Famine of 1961.

Youth unemployment also hit 21.3 percent in 2023 before the government stopped publishing the data. As of August 2024, the reported figure was still a staggering 17.1 percent. This is not the profile of a rising power – it’s a warning sign of deep internal dysfunction.

That dysfunction is undermining the very foundation of BRI. Chinese citizens do not benefit from trade imbalances or from financing ghost ports in Africa and Asia. BRI projects may enrich CCP elites and extend Beijing’s reach, but they do nothing to lift the average Chinese citizen out of poverty.

Trump’s trade policy, by contrast, is the precise antidote to China’s ambitions. It restores fairness to the global economic system, builds real interdependence between the U.S. and its allies, and re-centers American workers in the story of globalization.

That shift is already reshaping the world economy. Trump has delivered a more balanced, reciprocal trade system – one that gives the U.S. new leverage just as China tries to double down on its failing strategy. The BRI is built on coercion and false promises. Trump’s trade vision is built on strength, and the world is starting to take notice.

Ben Solis is the pen name of an international affairs journalist, historian, and researcher.