Underneath the Trade War of Donald Trump and Xi Jinping

There are two crucial factors at the forefront of the US-China trade war: the leadership qualities and personalities of Donald Trump and Xi Jinping.

The trade war between the US and China continues, despite the announcement of the 90-day truce to allow further negotiations. While the Chinese state media is largely mute on this truce, the US is amplifying its rhetoric, intensifying pressure on China to abandon its unfair and manipulative business practices, and demanding compliance to international trade laws. The trade war initiated by the US against China continues because there is much more at stake here. This war is not exclusively about resolving the current conflicting trade practices—it is more about who is going to shape the new world order in the future. This war therefore requires the utilization of as many diverse resources as possible for both parties—economic, diplomatic, cultural, and even military. Aside from these, there are two crucial factors at the forefront of this trade war, being the leadership qualities and personalities of the two leaders of the US and China: Donald Trump and Xi Jinping within the context of their domestic and international political situations.

There are a number of trade conditions that the US is expecting China to meet through this trade war. These include requirements for China to cease subsidizing state owned or state sponsored enterprises (SOEs), and to refrain from engaging in the misappropriation of foreign technology. Furthermore, the US is requiring China to stop manipulating currency to promote exports and illegally obtaining the US technology through hacking, industrial espionage, and intellectual property theft. If China agrees to implement these conditions, it will have to reform its current domestic economic model and its international trade practices.

In particular, if China discontinues its traditional economic model of subsiding the state-owned enterprises, this will then break, to a certain extent, the organic link between the Chinese companies and Chinese government. This is precisely what the US considers as a source of unfair competition between the companies of both nations. However, within China, this will be a litmus test for how far the Chinese Communist Party (CCP) is able to change itself. It will either be forced to reform itself to comply with the new trade agreements and, resultantly, will embrace the existing world order and its trade rules, instead of threatening them.  Or, it will defy harder the pressure from the US while keeping its monopoly over state-owned enterprises to get financial benefits from them, continuously posing itself as an ever more formidable trade rival to the US.

Underneath this trade war, there is a palpable conflict of two values, cultures, belief systems, sentimentalities, and histories, which often are incompatible. This incompatibility also manifests in the personalities and leadership traits of both Donald Trump and Xi Jinping. Indeed, they cannot unilaterally determine who will win this war. However, they will insidiously influence how this war is engaged, to what extent it deepens, and how to bring it to an end eventually.

Both leaders are highly pragmatic, notably determined and shrewdly calculative. Being a pragmatist doesn’t undermine their idealistic aspirations as they both perceive themselves to be endowed with a mission to usher their nation in a new era. Trump’s mission is to “Make America great again,” as the capturing slogan of the previous US elections, whereas Xi’s mission is to rejuvenate China again in pursuit of the “Chinese Dream”. In this sense, both of them are political reformists.

Trump intends to re-establish strength, glory and self-confidence to the US, whereas Xi intends to revitalize the great spirit of the Chinese nation, asserting its persistent ascendency to the position of a global superpower vis-à-vis the US. Trump aims to grow the US economy, which has never really been recovered from the recession precipitated by the collapse of the housing bubble in 2007. Xi aims to bring to fruition the collective desire of the Chinese people for global participation and recognition as the leading super-power supported by the accumulative wealth of their nation. With these visions, they have surreptitiously portrayed themselves as political saviors who will change the fate of their people through confrontation with their enemy in this trade war. In this sense, the way this war ends will have far-reaching effects on their nation’s prosperity, and on the visions they have created for the future. Therefore, these missions have already been deeply embedded in this war.

Despite these similarities, Donald Trump and Xi Jinping have many differentiations of personality and leadership traits.  The concepts of personality and leadership traits are somewhat interconnected, and therefore are examined interchangeably in this context.

Remarkably aggressive, blatantly blunt and highly boastful to a level of self-obsession, described by some as narcissistic personality disorder, Trump displays a complex leadership style. He is an unconventional politician with a sharp sensitivity to cost-effectiveness entrenched from his entrepreneurial expertise in business. He has an extraordinary determination not to be distracted by blaming, personal attacks, allegations, and criticisms from Democrats, human rights activists, world leaders, feminists, and former US Presidents, etc. He is unpredictable, eccentric, attention-seeking, and brash. Despite having constantly been mired in a series of scandals, he continues navigating the captain’s ship towards a destination, be it a bright or dark destination.

In addition to this complexity observed in his personality and leadership style, he is a man of contradiction. His famous slogan of “Making America Great Again” is at odds with his aspiration to make his legacy even greater than this. His intention to reshape the world order clashes at a personal level with his disdain for and mistrust in international norms, principles and agencies, coupled with the chaotic way he leads the US with the absence of coherent domestic and foreign policies. His self-described “war” with the US media pits him against the principles of accountability and transparency that he is currently seeking from his trade foe, China. Furthermore, his highly pragmatic political endeavors to advance democratic values are not reflected in his admiration for dictators and strong leaders around the world. An example of this is his irresistible praise for Vladimir Putin and Xi Jinping who are notorious abusers of these values.

By virtue of or, perhaps, despite these contradictions, he is a formidable US President that must not be underestimated. In particular, he is an unusual leader, given his complete disregard for the consequences of his decisions, even though it may have him impeached, or cost him a next presidential term. His personality and leadership style, for the most part, encompass what is required to succeed in the current trade war he is waging against China. Moreover, his resilience in his relentless pursuit of what he sees as vital, valuable and victorious mostly from a business perspective is exactly what is indispensable in winning this complex war.

To win this war, Trump is perfectly able to use any of the resources at his disposal against China. He may decide to utilize the diplomatic and economic solidarity of its allies to persuade or pressurize China to succumb to the US terms and conditions of new trade agreements. This will isolate China gradually in the international market, and contain its ambition to manipulate the trade practices to its advantage. The challenge for him to achieve this goal is that he has already complicated the US relationship with its allies, in particular with the European Union, being deeply divided on how to respond in unison to the unfair trade practices of China. However, they have no other option than being allied with US in this trade war. If not, then they will be falling into the hands of China, which would be worse than standing idle in this war. Military supremacy is the other resource, a crucial but costly one. It may be necessary as a last resort to finish this war.

For this purpose, Trump must create a synergy of collective leadership to tackle China’s ambition to dominate the world trade. This is a vital and advantageous political dynamism for Trump to outmaneuver China. For China has already lost the tradition of collective leadership as a key component of the CCP operations under the spell of Xi. In addition, its ever-intensifying military presence in the disputed South China Sea has already put it in an isolated position. Trump may utilize the tactic of portraying the US as a moral high ground to align the moral force of its allies against China. Further to this, the Uyghur humanitarian crisis, while unfolding tragically at the command of Xi, is a great opportunity for Trump to expose the degraded and dangerous immoral action of its trade rival to the world, capitalizing on the moral message being both powerful and persuasive.

Comparatively, Xi Jinping is equally aggressive, albeit characteristically ambiguously so. As a princeling, he is privileged with the legitimacy of his power as part of the political culture of China. This legitimacy has been tarnished and made fragile due to his “crusade” against corruption.  This has widely been perceived as politically motivated, selectively punitive and procedurally unfair, bringing him more enemies than friends inside and outside of the conclave of Zhongnanhai, the heart of the CCP. Politically, he does not have any comprehensive economic policies to revive the current economic situation of China, which has already started to be crippled due to the high tariffs being put on the imported goods from China. This further brings into disrepute the legitimacy of his power, despite references to him as the “chairman of everything” in China, seemingly unchallengeable. However, if the trade war is sustained, causing China into a long economic downturn, his power will face severe and, potentially, fatal challenges. The greatest challenge to Xi is likely to come from within the CCP—in particular within the Politburo Standing Committee—as he may be seen as failing to keep the political equilibrium defined by the core ideology of the CCP—centralized democracy.

Centralized democracy was originally proposed by Lenin, elaborated on eloquently by Mao Zedong, and implemented successfully by Deng Xiaoping.  It represents how the CCP makes a decision collectively while mediating skillfully the conflicting interests of party members and political groups in consideration of putting the legitimacy of the CCP a priority. Ideally, equilibrium exists between these two polarized factors—centralized management and democratic engagement—through a mediating process as defined by Hegelian dialectic.  This dialectic stipulates that binary oppositional forces will eventually be mediated in a synergy. If the political power is too centralized, then the decision making process becomes arbitrary and wrong, whereas if democracy is too dominant, then chaos and even anarchy ensues. Hence, these two forces need to be mediated constantly, avoiding polarization and ensuring intra-party collaboration.

There are some factions inside China who are unhappy with the over-concentration of authority Xi imposes and exerts over them. For them, it is not against the rule of democracy but against the principle of centralized democracy. Xi has made dangerous maneuvers to destabilize this equilibrium towards over-centralization of his power under the pretext of a fight against corruption. This fight has fractured the volatile equilibrium within the CCP, curbing the political influence of some elite politicians from different political factions. The current trade war will resurface the suppressed political intentions of these elites, who either previously or currently are sidelined by Xi, to be united against him. In this sense, he will be compelled to fight two wars at once, the trade war with the US internationally, and the political war with his opponents within the CCP domestically. He will be torn by the simultaneous strains of these wars, costing him his power, vision and, potentially, his life, if he is unable to conquer his opponents in both fronts.

The survival of the CCP, therefore, becomes a critical issue within China. The party is facing the current domestic challenges of ever-growing unemployment, mismanagement of the banking system, wide-spread corruption, a widening gap between rich and poor, ecological degradation and social unrest. The trade war makes the current economic situation even worse. The approximate 90 million CCP members in China will never tolerate the prospect of seeing the demise of their party. Hence, as the trade war intensifies, Xi finds himself under enormous pressure domestically to revive China’s economy and to re-establish the political equilibrium of centralized democracy.

Pragmatically, in response to this very pressure, Xi could potentially choose to either relinquish some of his power as a sign of reconciliation with his opponents, or to create a facade representing the interests of the strongest political group or faction in China’s political arena, or to allow sweeping political reforms. However, it is not in Xi’s nature to act in such a passive way.  His alternative and more aggressive resources, as is his style, will be to mobilize Chinese nationalism as a traditional ploy against the US diverting the attention of the public from his failures, and focusing on defeating the externally perceived enemy.  He may also carry out pervasive political purges within the CCP to clear his way towards absolute dominance that his great spiritual mentor Mao did during the Cultural Revolution, concealing his own gross political blunders.

The implementation of these methods will internalize and conceal the damage caused to China by the trade war in a self-destructive way on a massive scale. As a result, the CCP will either be weakened severely or disintegrated altogether. Inadvertently, this will assist the US in being victorious in this trade war with China by sending the current tension between the two countries into the heart of the CCP. If China is defeated by the US in this trade war, then Xi will be scapegoated and held accountable for the humiliation of the nation, thanks to the fact that he is the most powerful leader in China after Mao. For leadership is about responsibility, not only about power. Therefore, the trade war will bring to the forefront the simmering war within the CCP.

Trump and Xi Jinping are representatives of two different political systems. Trump is the leader of the most advanced Western liberal democracy. Being the President of the US is often colloquially referred to as the “leader of the free world” whose aim is supposedly to protect and perpetuate individual rights, the rule of law and representative democracy. However, Trump does not often conform to these democratic principles, nor the ideologies of the political system he represents. The never-ending “war” that he has waged against his own government is intensified by the political scandals of recent days: a government shutdown, abrupt troop withdrawals from Syria, a resumed plan to construct the highly controversial Mexico wall, and unusually high staff turnovers, including the resignation of his defense minister, the latest in a string of senior US officials to do so.  This will not only cast a shadow over the political stability of the Trump administration, but also the psychological stability of Trump himself.

Comparatively, Xi is a leader of a totalitarian and autocratic regime that has no respect for the rule of law, appeasing exclusively the interests of a few selected Communist elites. Xi represents the CCP, which is the only legitimizing source of any political power in China. Politically speaking, the raison d’etre of the CCP is the functionality of generating wealth, and its ideology is adjusted to serve this purpose. It is a pseudo-ideological entity, given it has significantly deviated from the original thoughts and visions of Marx, Lenin and Mao Zedong as its spiritual leaders. Therefore, behind the name of the Chinese Communist Party lies the existence of the gigantic political infrastructure, ironically resembling more of an intrinsic capitalist society in China, where an elite group of apparent Communists are privileged in line with their position in the colossal networks of relationships (guan xi) and with their loyalty to the CCP and its leader, Xi. Xi’s leadership of the CCP will, therefore, be judged exclusively by the people of China against his ability to achieve this embedded purpose of the so-called Chinese Dream, not ideologically but practically. If the trade war with the US is economically damaging to the Chinese people, this will be critical for Xi’s leadership. Under such circumstances, Xi will then escalate his actions more dangerously for his political survival.

Trump is not exceptional to vulnerabilities either, which are inherent in the political system he operates within. If the trade war continues beyond the first and even possibly the second term of his presidency, it is unclear how the successor of Trump will be able to continue this decisive war against China successfully. But this is not the case for Xi. As long as he survives all the challenges from within and without the CCP, he will be able to command the direction of the war with great consistency, efficiency and resilience, as he was appointed as president with no time limit early this year. Hence, for Trump, the shorter the trade war, the more effective its result will become, not only economically for the US but also politically for his legacy.

Definitely, the result of this trade war will change the world irreversibly and determine the fate of these two leaders. Trump being victorious in this trade war is highly likely at this stage, given a multitude of advantages that he can exert against China. He will be perceived as a US president who waged a just war against a nation which has no respect for democracy, the rule of law and international principles. Hence, he will be revered as a national hero by many in creating fairer and more secure trade agreements with China, reasserting the US as the dominant superpower. The same may never eventuate for Xi Jinping.

While the trade war will run its own course, the two leaders will utilize their strengths and resources to influence it for their own advantage and the advantage of their respective nations. It is not the re-acknowledgement of theory or ideology that only heroes write history. It will ultimately be the whims, passions and visions of these two leaders, Donald Trump and Xi Jinping, which influence the course of history in a totally unpredictable way. As such, the current trade war will, without a doubt, be affected by the efforts of heroes and villains to influence it with their unique personalities, strengths and flaws. These two leaders will be fairly judged by history, only after the conclusion of this war.