China’s Strategic Industrial Power Play vs. Trump’s Transactional Tariffs

When it comes to international trade and industrial strategy, few figures have commanded as much global attention in recent years as Donald Trump and Xi Jinping. Both have taken aggressive stances on protecting their national industries. However, while Trump’s approach was rooted in short-term tariffs and headline-grabbing trade wars, Xi Jinping’s industrial policy is proving far more dangerous in the long run—especially in sectors like automotive, steel, and chemicals.

Xi’s strategy isn’t simply reactive or political—it is deeply strategic, state-driven, and long-term. Under his leadership, China has implemented sweeping industrial policies like “Made in China 2025,” aimed at achieving global dominance in key technologies and manufacturing sectors. Unlike Trump’s tariffs, which were often applied in isolation and lacked coordination, Xi’s government backs entire supply chains with subsidies, state financing, and geopolitical leverage.

In the auto sector, China has rapidly transformed itself into a global leader in electric vehicles (EVs), supported by massive state incentives, low-cost manufacturing, and control of critical raw materials like lithium and rare earths. Western automakers now find themselves not only competing with Chinese firms domestically but also being pushed out of foreign markets by cheaper and increasingly sophisticated Chinese EVs.

The story is similar in the steel industry. China produces more than half of the world’s steel, flooding global markets with subsidized exports that undercut foreign producers. While Trump imposed tariffs to protect U.S. steel, these measures were largely symbolic. Xi’s policies, by contrast, have fundamentally distorted global supply and demand, crippling entire industries in Europe, Southeast Asia, and even Latin America.

Chemical manufacturing—often overlooked—is another area where Xi’s strategy poses significant risks. China’s heavy investment in this sector, along with relaxed environmental regulations and economies of scale, have allowed Chinese chemical giants to outprice and outproduce their Western counterparts. This undermines innovation and creates dangerous dependencies in supply chains essential for pharmaceuticals, electronics, and agriculture.

Unlike Trump’s largely unilateral and confrontational style, Xi’s influence is institutionalized, built into the machinery of the Chinese state. It is amplified by the Belt and Road Initiative, which exports China’s industrial overcapacity to developing nations, further entrenching its economic power. This long game makes Xi’s approach more insidious and harder to counter through conventional trade policy.

The global community must recognize that economic competition with China under Xi is not just about tariffs or deficits—it’s about systemic rivalry. Addressing this requires multilateral cooperation, strategic industrial planning, and a rethinking of how liberal democracies defend their economic sovereignty.

While Trump may have made noise, Xi is quietly reshaping the industrial order. And that makes him, by far, the more formidable—and potentially dangerous—player in the battle over the future of global manufacturing.