President Xi’s Visit to the USA Amid Trade Wars and Waves of Multipolarity 

President Ronald Reagan, first year in office, the debt crossed the US$ 1 trillion mark. It took the USA 192 years to reach US$ 1 trillion, and in the next 5 years the debt doubled to more than US$ 2 trillion. A sharp increase in debt was accompanied by a stronger US dollar, a worsening trade balance, and poor performance in the manufacturing and industrial sectors due to structural problems. The Reagan administration struggled to find a solution and decided to penalize others for America’s shortcomings. It began pushing Japan, along with others, to appreciate its currency and help the USA manage the trade deficit. Technology was a prime target, and the USA compelled Japan to control semiconductor exports and reserve 20% of the semiconductor market for foreigners. 

The USA deemed these actions necessary to preserve its dominance in the technology sector and reverse the trade deficit. They severely affected Japan’s economic and technological growth and compromised its future prospects. The policy worked in the short run, but it was shortsighted because the US ignored structural problems in the economy, manufacturing, and industrial sectors.            

As a result, after 41 years, the USA faces similar challenges. Its debt is rising and has crossed US$40 trillion; the trade deficit has widened; and technological dominance is under threat, if not already lost. Manufacturing and industrial sectors are performing poorly and cannot compete in the global market. The USA is not addressing the structural problems and simply wants to repeat the tactics of the Reagan Administration. This time, the USA is targeting China and blaming it for American problems. Building on the 1980s experience, a few years ago the USA began pressuring China to appreciate the Yuan, but with no results. Then the USA launched tech and trade wars against China, with limited or no success. At the same time, the USA launched a China containment policy.  

With President Trump’s inauguration, the trade war took a new turn. On the one hand, he launched an all-out trade war against China. The USA is hell-bent on damaging the Chinese economy and technological rise, and on ensuring China’s containment. However, the trade war brings more challenges for the USA than for China. For example, the trade war only reduces the trade deficit by a negligible amount. The data show that during the first year of the trade war, trade fell by US$ 2 billion (US$903 billion to US$901 billion). Moreover, tariffs will also negatively affect the U.S. economy in the future. For example, the Tax Foundation in the USA has estimated that the tariff will reduce GDP by 0.4%. The capital stock will shrink by 0.3%, and job hours will be reduced by 345,000 full-time equivalent jobs. 

In contrast, China’s trade surplus crossed the US$1 trillion mark for the first time. This clearly indicates that the Chinese economy and trade are not dependent on the USA. China has diverse partners (it is a trade partner with 150+ countries). Moreover, the Chinese economy will continue to grow at an average of 5%, strengthening China’s economy and global position. 

On the other hand, the USA has broadened the scope of trade wars, sanctions, and technology wars and is targeting the whole world. It is trying to make the world pay for the USA’s inefficiencies. Despite immense pressure, countries are unwilling to bow to the USA’s demands. They believe the USA wants to revive and grow its economy at others’ expense. That’s why the USA is asking for investment in the US. Demands such as shifting the chip industry from Taiwan and the auto industry from Canada to the USA further reinforce their fear. 

Currently, Canada is bearing the brunt of this policy, as the US is targeting Canada on all fronts. The campaign intensified after the Canadian Prime Minister’s speech on the fading of the global order and the emergence of a new order. The speech reignited the debate over a multipolar world and a fair order, one that can help them break the shackles of hegemony and exploitation by powerful countries. It strengthened the Global South’s vision of a multipolar world and contributed to the campaign for one. 

It is pertinent to note that President Xi is a staunch believer in a multipolar world, and he foresees it as a natural outcome of the “great changes unseen in a century”. He has reiterated the importance and necessity of a multipolar world time and again. However, he wants a multipolar world with a reformed United Nations at the center, rather than in the driving seat.  

Against this backdrop, President Xi is scheduled to travel to the USA in late September 2026 to attend the Xi-Trump Summit. The world expects a positive breakthrough, as the trade war has jeopardized global economic recovery. The world was just able to recover from the shocks of the Russia-Ukraine war; President Trump launched trade wars. This compelled the IMF to lower its GDP growth forecast to 3.1% and 3.2% for 2026 and 2027, respectively. Now, the American attack on Iran has diminished prospects for global economic growth recovery, and maybe the IMF will have to lower it further. Furthermore, the US hegemonic attitude and self-assumed belief that China and the world are developing at the expense of the USA undermine prospects for positive development. 

In this context, how can we expect a breakthrough? Given these circumstances, President Xi’s philosophy of dialogue over confrontation and win-win cooperation over zero-sum games can lead to a breakthrough. Dialogue and win-win cooperation will help resolve bilateral issues, address the US’s domestic problems (debt, deficit, jobs, etc.), and improve global image. It will also pave the way for global economic recovery, sustainable development, and peace. How? 

First, China can invest in the American market, given its substantial financial resources, driven by a high savings rate (China’s share of global savings is 27%). Data show that China has the highest savings rate, at almost 42% of national income (roughly US$8 trillion), roughly double that of advanced countries. Second, China has invested heavily and offers lucrative incentives to boost domestic consumption and open new areas for investment, such as nucleic acid pharmaceuticals, zero‑magnetic medical devices, Smart testing and inspection instruments, Intelligent energy management systems, deep-sea robots, specialized marine equipment, etc. It will create enormous opportunities for global economies and companies. The USA can benefit immensely if it chooses to cooperate. Globally, China can offer the USA and its allies the option to join the BRI or to link USA-led initiatives such as BUILD, B3W, PGII, etc., with the BRI and other Chinese initiatives. It is an open secret that US-led initiatives lack the financial resources to invest in them, and Chinese investment will help to overcome the shortfall. 

In conclusion, let’s hope President Trump and the American ruling elite realize that they cannot run the country or international relations policy on knee-jerk reactions or out of shortsightedness. Running a country and managing international relations requires wisdom and forward-looking, win-win outcomes. It needs long-term solutions and respect for competitors.

Furthermore, they need to understand that the USA was at the center of the global economy, trade, investment, and globalization because of its openness, cooperation, sharing, and partnerships, not closed doors, protectionism, confrontations, or isolation.  

Thus, the US needs to change its coercive policies, resolve issues through dialogue rather than confrontation, pursue win-win cooperation rather than zero-sum games, and join hands with China to build a prosperous and peaceful world. Otherwise, it will face deeper and more severe challenges in a multipolar world, and the USA will no longer be a decisive force.