Tariff Wars! Could Trump’s China policy trigger a fall-out with his ‘friend’, President Xi Jinping?

The President-elect and his Chinese opponent have made a fist of playing buddies. But Trump has vowed to raise tariffs on Chinese imports – and Vladimir Putin and Kim Jong-un are cosying up to China. Michael Sheridan asks if this could put a major roadblock in the way of cordial East-West politics...

Donald Trump used to call Xi Jinping “my friend”. But the Chinese leader doesn’t do “friends”. His formal congratulations to America’s president-elect were notably lacking in warmth.

Xi’s brutal realism when Covid-19 broke out told its own story. Then he sat and watched as wars tested American resolve. Now these two men in their seventies are fated to run the most important relationship in the world.

Both are the sons of privilege. Trump was born into wealth, Xi into power. But if Trump was spoiled by life, Xi was hardened by it. While a young Trump was hitting the party scene in Manhattan, Xi toiled in the mountains and lived in a cave for years after his father was purged from the Communist Party. As a teenager, he was beaten, imprisoned and threatened with death.

It was always hard for the Chinese leader and his inner circle to “read” Trump, partly because nothing in their own experience prepared them for him. On one hand, the Chinese liked Trump 1.0 because they saw him an agent of chaos, sowing doubt in democracy and weakening America’s alliances. On the other hand, they dislike Trump 2.0 for the same reason – he is an agent of chaos but one whose unpredictable style makes enemies uncertain and gives him strength.

That is what Trump’s acolytes claim, at least. And it makes Xi Jinping wary, for his own personality was forged in the chaos of the Cultural Revolution. He hates disorder. Chinese diplomacy emphasises prepared positions, recitals by rote and never deviating from the script. That is not much use faced with a freewheeling improviser.

Last time around, Xi and his experts saw the 45th president as a loud but transactional opponent whose bark was worse than his bite. Their face-to-face meetings were calm.

But Xi is an awkward engager. He tends to speak in slogans when meeting foreign leaders. Decades of Communist Party discipline indoctrinate him against spontaneous informality. Even when he tries to sound genial, it comes out as stilted.

In contrast, Trump was convinced of his own gift for bonding with powerful men. Nothing in Xi Jinping’s back story had prepared him for the full-on New York hustle. It left the ‘Red Emperor’ and his entourage bewildered.

People who were at Mar-a-Lago watched as Xi’s motorcade swept in to bring the lifelong Marxist to a lavish dinner hosted by Trump in his tycoon’s retreat.

Over the drinks, Trump tried some family banter to break the ice with Xi and his wife, the famous singer Peng Liyuan.

What about your lovely daughter, he asked, referring to the couple’s only child, Mingze, who had studied at Harvard and then grudgingly returned home. “Oh,” said Xi, “we missed her too much. So she had to come back to China.”  End of subject.

In turn, Xi showed Trump around the Forbidden City, from where his imperial predecessors ruled China when it was the greatest power on earth for centuries before the birth of the American republic.

An odd photograph shows Trump and his wife Melania standing opposite the First Couple of China in an ornate courtyard, all of them appearing to wish they were somewhere else. Trump looked as if he was sizing up a desirable piece of real estate.

In practice, the two will leave policy detail to their teams. While team Trump remains in flux, the Chinese will field Xi’s pet ideologue, Wang Huning, who fancies himself an expert on decaying democracies, and a group of economic specialists.

The stakes could hardly be higher. Trump has promised to raise tariffs on Chinese imports to 60 per cent, a vow that makes some of his Wall Street backers blanch. He has talked of getting trillions of dollars in reparations from China for the pandemic.

In real-world actions, China could hit back at Trump’s tariffs by targeting Fortune 500 companies exposed to its market. It will likely suppress the export of tech-critical minerals to offset American curbs on semiconductors. Its nuclear options include selling off some of its $775 billion in US Treasury Securities and letting its currency devalue against the dollar.

Above all, Beijing wants to keep its export machine turning. That will pose a conflict of interest for Elon Musk, who makes Tesla electric cars in China, and is set to play a leading role in Trump 2.0. The world’s richest man may not want a trade war.

When it comes to real war, Trump has echoed Richard Nixon’s “madman” theory which held that it keeps your opponents off-balance if they think you might actually use force.

Last time, Trump had undeniable wins – keeping the peace around Taiwan, constraining Chinese hawks and worrying Beijing more than his own allies – just about.

This time, Vladimir Putin and the North Korean dictator Kim Jong-un are players too. Trump has been nice about them in the past. But now it is Xi Jinping who calls them “dear friends”...