Trump and Xi Face Off
Levan Ramishvili
Expect U.S.-China tensions as the two leaders pursue opposing agendas.
With Donald Trump’s second term about to begin, the world must gear up for what could be the most dramatic confrontation in international politics since Harry Truman squared off against Joseph Stalin at the start of the Cold War. Xi Jinping and Mr. Trump will be the two most powerful men in the world, and their ambitions and agendas are directly opposed to each other’s.
The two leaders have much in common. Both dominate their domestic political scenes. Mr. Xi is the most powerful Communist Party leader since Mao Zedong. Mr. Trump is the most dominant Republican since Ronald Reagan. Neither leader likes opposition, and both have struggled to purge their parties of dissent. Both are instinctive mercantilists and view trade deficits as bad. Both appear willing to devalue their currencies to promote exports. Both favor crushing Nimby opposition to important energy and infrastructure projects. Both hold in contempt the liberal internationalist ideals of the trans-Atlantic elite and regard Europe as a decadent swamp. Both want to make their countries great again.
As the Man from Queens faces off against the Red Princeling, China has much to celebrate. Its shipyards are turning out vessels that would be suitable to use against Taiwan, and its growing navy is showing off its strength in the South China Sea and beyond. Its laboratories are churning out nuclear weapons. China racked up its largest trade surplus in 2024, and its manufacturers dominate key industries ranging from automobiles to steel to solar panels.
Backed by the almost limitless resources of the state, Chinese computer researchers are racing to dominate fields such as artificial intelligence and quantum computing, challenging once-unchallengeable American leads in one cutting-edge technology sector after another. Chinese hackers have turned America’s cyber infrastructure into their playground, penetrating everything from the Treasury Department to cellphone networks and healthcare records. Countries across the Middle East, Africa, Eastern Europe and Latin America that once relied on the West for technology, investment and trading opportunities are now turning toward China’s rising sun.
But Mr. Xi is worried, and rightly so. Despite its strengths, Mr. Xi’s “China Dream”—the great rejuvenation of the Chinese nation—rests on shaky foundations. The U.S. remains the world’s most dynamic and resilient society, with an extraordinary capacity to confound critics and disappoint doomsayers. In round two of the Xi-Trump struggle for the heavyweight championship of the world, Mr. Trump may face an opponent more militarily powerful and technologically advanced than in 2017. But China is also more economically and diplomatically vulnerable than it was in Mr. Trump’s first term.
Many of Mr. Xi’s policies haven’t worked. China misjudged the effect that the 2008-09 financial crisis would have on the global balance of power, thinking that the crisis heralded America’s inevitable and irreversible decline. China also failed to deal with rising problems in its real-estate sector, where years of ill-judged state policy created the most expensive housing bubble in history. Further, while overdependence on an export-oriented manufacturing strategy made China an industrial powerhouse, its staggering trade surpluses are turning much of the world against Beijing—while the country desperately needs to export its way out of its domestic troubles.
Mr. Xi’s third big bet—that clamping down on Chinese personal and intellectual freedom would stabilize communist rule—also seems to be going wrong. Imposing party control on businesses, building huge state-owned enterprises, censoring frank talk about economic problems, and punishing successful entrepreneurs for speaking their minds all undermine innovation and growth.
As a result, Mr. Xi now faces a vicious circle. To secure his power in the face of bad economic news, he needs to stir up nationalist fervor at home while clamping down more tightly on dissent. But nationalist fervor makes other countries more wary of China as a trading partner and investment destination, while domestic authoritarianism stifles entrepreneurs and embitters young people. Mr. Xi’s policies increase his economic difficulties, and these difficulties lead him to double down on his policies.
Neither Mr. Trump nor Mr. Xi wants a war, but Mr. Xi’s economic and strategic objectives require American defeat. Mr. Trump’s MAGA agenda, meantime, can succeed only if China’s rise is curbed. One of these leaders is going to be disappointed by the outcome of the next four years.
Mr. Trump must secure the foundations of American power against China’s attempt to erode them without stumbling into war. We should all wish him success.