China President Xi's broad political power gives him an upper hand over Trump in a trade war

Key Points
  • President Donald Trump and China President Xi Jinping are escalating threats to impose billions of dollars in tariffs.
  • But Xi is not bound by the political constraints of American democracy that Trump must navigate.
  • While Trump's own political party is speaking out against the tariff threats, experts say public opinion in China supports Xi's retaliation because it sees Trump as the aggressor in the dispute.
China's President Xi Jinping waves to delegates as he is elected to a second five-year term during the fifth plenary session of the first session of the 13th National People's Congress (NPC) at the Great Hall of the People in Beijing on March 17, 2018.
Nicolas Asforui | AFP | Getty Images

U.S. President Donald Trump and China President Xi Jinping have been engaged in a battle of escalating threats to impose billions of dollars in tariffs.

But the two countries aren't exactly competing on a level playing field.

As the leader of the executive branch, Trump has broad abilities to impose tariffs and other trade barriers against countries. Trump, who has long railed against "unfair" trade deficits and advocated for more protectionist trade policies, is increasingly exercising that power during his second year in office.

Despite Trump's authority, however, he is bound by the political constraints of a democratic government, with a Constitution imposing presidential term limits, and securing the rights of Americans' free speech and association.

In March, China's mostly toothless parliament passed a series of constitutional amendments ceding significant power to Xi. The Chinese government removed presidential term limits as part of the package, effectively enabling Xi to remain in office indefinitely.

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Trump, on the other hand, not only has to worry about his prospects for the 2020 presidential election, but also for the Republican Party's control of the legislative branch in the 2018 midterm elections.

And while congressional Republicans have largely been reluctant to criticize the president, who enjoys high approval ratings among large swaths of the party, lawmakers have shown no such restraint when it comes to trade.

When Trump announced tariffs of 25 percent on steel and 10 percent on aluminum in March, for instance, more than 100 Republicans in the House of Representatives signed a letter urging the president not to follow through on the plan, or at least dial back its scope. In the end, the tariffs were imposed by executive order, but were vastly watered down due to the outcry.

"Needless to say, this is not going to happen in China," said Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics. "That's a very important reason why China's likely to win if this does come down to a trade war."

The administration's newest proposal includes slapping tariffs of approximately $50 billion on Chinese products — a plan Trump shortly followed up on by floating additional tariffs of $100 billion on Chinese imports.

The signal that Trump is tripling down on punitive tariffs has already spurred leaders of the traditionally free trade GOP to voice their opposition.

Chinese public opinion on the trade skirmish is playing out in almost the opposite direction, said Mary Lovely, a professor of economics at Syracuse University.

For Xi's government, Lovely said, "This particular episode is going to play right into their ability to get people on their side because Trump is seen as the aggressor."

Trump and the U.S. trade representative have argued that the tariffs constitute an appropriate retaliation to China's alleged theft of U.S. intellectual property. China's foreign ministry has pushed back on the accusation, arguing that Trump was instigating a fight between protectionism and free trade.

"We feel America is very arrogant. They have taken a wrong action. The result is that they will hurt themselves. If they release the list of $100 billion tariffs, China is prepared. And will not hesitate," a Ministry of Commerce representative said Friday.

To be sure, China isn't without potential headwinds of its own as it retaliates against U.S. tariff threats. An increasingly powerful and affluent country, China is now "in a spot where they are trying to take a seat at the adult table" on global affairs, according to John Rutledge, chief investment officer of Safanad, a global principal investment house.

"It imposes certain constraints on them," Rutledge said. "They're doing things to actively curry support among other governments."

Still, Rutledge said the aggressive U.S. strategy is not playing well on the world stage.

"The point is, there's a widespread preference for trade," he said. "This is playing very badly for the U.S. in many parts of the world."

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