Xi vs Trump: Who has the better hand in potential trade war?

2018-04-11 20:13
US President Donald Trump, right, and Chinese President Xi Jinping, left. (Andy Wong, AP)

US President Donald Trump, right, and Chinese President Xi Jinping, left. (Andy Wong, AP)

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The brewing China-US trade conflict features two leaders who've expressed friendship but are equally determined to pursue their nation's interests and their own political agendas.

But while US President Donald Trump faces continuing churn in his administration and a tough challenge in midterm congressional elections, China's Xi Jinping leads an outwardly stable authoritarian regime. Xi recently succeeded in pushing through a constitutional reform allowing him to rule for as long as he wishes while facing no serious electoral challenge.

A look at some of the issues that could determine the outcome of the trade spat:

Friendly talk

Although Trump sounded tough on the campaign trail and has challenged Beijing over trade and Taiwan, he professes admiration for his Chinese counterpart and complimented him on his ability to remove term limits on his presidential rule.

"President Xi and I will always be friends, no matter what happens with our dispute on trade," Trump said in a tweet on Sunday. "China's great and Xi is a great gentleman," he said in remarks at a Republican fundraiser last month obtained by CNN.

Xi has generally limited his comments to emphasising the benefits of a close China-US relationship and thanking Trump in a phone call on March 10 for congratulating him on his obtaining a second term as president. A pair of summits between the leaders in the US and China over the past year were also hailed by China as successes.

Family backgrounds

Both Trump and Xi come from privileged backgrounds, although their routes to political power were decidedly different. Both, however, have built their reputations on a robust form of nationalism, with Trump promoting "America First" and Xi identifying himself with the "Chinese Dream" of rising prosperity accompanied by muscular defence and foreign policies.

Trump was born the son of a New York City real estate mogul and rose to the presidency on a populist wave after a career as a property developer and reality TV star. Xi's father was a colleague of Mao Zedong, whose influence is believed to have aided his rise through a series of military, government and Communist Party positions before he was named party leader in 2012.

Both also show an affection for strong-man leadership, and while American democracy is far removed from China's one-party authoritarian system, Trump's verbal attacks on the mainstream media and certain judges have drawn criticism. They both also place a strong emphasis on the military, including increased defence budgets and an appreciation for military parades, two of which Xi has led during his time in office.

Driving forces

Xi's plan to create Chinese global competitors in fields including robotics, electric cars and pharmaceuticals is seen as precipitating the current crisis, while Trump appears motivated by a desire to shore up America's manufacturing strength.

Neither wants to be seen as backing down, and though Xi's usually soft-spoken manner contrasts Trump's trademark bravado, both "are thin-skinned bullies who place a lot of value on portraying strength", said Liz Economy, a leading academic on China and author of "The Third Revolution: Xi Jinping and the New Chinese State".

"This makes it difficult to ramp down in this one-on-one tariff death match," although both have the capacity via Twitter or state media to trumpet their success and ignore any failings once the dispute has concluded, Economy said.

Let's make a deal

While the current dispute has focused on trade, many other factors are in play, bringing out the bargaining qualities and transactional natures of the two leaders and their administrations. Opinions on who has the upper hand differ widely.

By pursuing the tariff threat and backing complaints about intellectual property theft, Trump has "successfully changed the fundamentals of ... US-China relations", said Miles Yu Maochun, a China politics expert at the US Naval Academy in Annapolis, Maryland.

Yu also points to recent US policy on North Korea, particularly Trump's acceptance of an invitation to talks with North Korean leader Kim Jong Un as early as next month that appeared to catch Beijing off guard.

Shortly afterward, Kim paid an unexpected debut visit to China as leader in what some saw as an attempt by Beijing to reassert its centrality in resolving tensions over the North's nuclear weapons and missile programmes.

China's cards

Yet, as North Korea's most important trade partner and political ally, China wields considerable influence and its willingness to enforce United Nations sanctions has built up its credibility as a reliable international partner.

China also stands to bring additional pressure on Taiwan, the self-governing island democracy it claims, and which is closely linked to Washington despite technically unofficial ties.

While it responded mildly to Trump's early outreach to the island's independence-leaning government, recent moves such as the appointment of hawkish new National Security Adviser John Bolton, the passage of a US law encouraging more intergovernmental exchanges and an agreement to pass Taiwan submarine manufacturing technology are hardening views among anti-American nationalists in China.

Challenges at home

While Yu cites domestic support for Trump's trade approach to China, Xi can likely command even stronger backing at home for a muscular approach toward what Beijing portrays as a conflict resulting from US unilateralism and hegemony.

Xi also faces no electoral challenge such as the one Trump's Republican party will confront in midterm congressional elections later this year, when Trump's handling of the US economy and a host of other issues will be in the mix. Mindful of voter's concerns, especially in the agricultural and industrial sectors, Xi appears set to use such leverage for maximum gain.

"Xi will follow a tough but well directed path designed to hurt specific interests that will complain loudly," said Joseph Fewsmith, a Boston University expert on Chinese foreign policy.

While Xi is broadly considered the most powerful leader since Mao, China "only appears to be united and confident in its approach", said Economy, the academic, adding that the outside world has limited insight into policy debates within China.

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