Xi’s True Challenge: Beyond Trump’s Trade War

In discussions within the bustling wholesale markets and trade exhibitions of China, invoking the name Donald Trump often elicits a knowing chuckle rather than trepidation. The economic impact of the U.S. president’s 145% tariffs appears negligible to many Chinese traders. Instead, such measures have emboldened a wave of online nationalists, who craft satirical memes and viral content featuring an AI-generated Trump and other notable figures laboring on assembly lines for footwear and electronics.

China’s reaction under President Xi Jinping underscores a steadfast refusal to capitulate. Notably, Xi’s rhetoric emphasizes self-reliance, declaring that, “For over 70 years, our development has hinged not on external favors but on our industriousness.” This pronounced confidence is underpinned by a decreased dependency on American exports compared to a decade ago. However, Trump’s aggressive tariff strategy seemingly complicates issues already exacerbated by an internal economic malaise characterized by a housing crisis, rising job insecurities, and an aging populace.

Indeed, Xi’s leadership, initiated in 2012 with aspirations of a revitalized China, now faces formidable domestic challenges. The psychological scars of an erratic housing market have left consumers wary of spending, while millions of graduates encounter bleak employment prospects. Furthermore, the looming possibility of a pension crisis looms over impending retirements, adding to the concerns of middle-class families.

As such, China’s economic resilience is being tested not merely by foreign tariffs but by an internal landscape fraught with uncertainties that could compromise the promises of prosperity Xi once extolled.