China-US trade end of all wars?


Even after the trade war ends, the conflict will continue

From “Cooperating rivals” to “Competing rivals”…the China-US relationship has varied, as China’s emergence as a superpower after the USA, challenges the unipolarity of the USA and is seen as a threat to US interests generally and to the Trump Administration particularly. Despite having different political systems, strategic interests, and cultural traditions, both the countries remained largely cooperative, for the past four decades. China and the USA can be referred to as ‘Cooperating Rivals’ in this period.

On the global value chain, they were in different positions and the competitive aspect of their economies was not as prominent. Win-win economic engagement was an important cornerstone for their continuous cooperation. Besides having geopolitical and ideological differences, both the parties were coherent and practical. In order to develop, China needed US cooperation to enter the US-dominated global free trade system and markets, while on the other hand the USA attached significant importance to the business opportunities the Chinese market afforded.

So why have both states begun to view each other today as ‘competing rivals’ rather than ‘cooperating rivals’? The changes in US domestic politics and significant shifts in the US perception of the world is closely related to the cause of this rivalry. China has been officially identified as a “major strategic rival” by the US National Security Strategy and National Defence Strategy. This is not the outcome of a desire on the part of President Donald Trump nor his “hawkish” advisers. In fact, it is a strategic judgment the US government and public have made after careful consideration of the facts, which will not change in the short term.

China and the USA will compete for international investment, economic mutual dependence, and technological dominance

Since January 2018, China and the USA have engaged in a trade war which involves the mutual placement of tariffs. Trump had declared the campaign to fix what he called China’s longtime abuse of the broken international system and unfair practices. China and the USA have both already imposed tariffs on steel, aluminum and some agricultural goods, and have embarked on a full-scale trade war.

Trump has slapped tariffs on $50 billion worth of imports from China, as the economic policies of Beijing has resulted in the loss of US jobs. Also, Trump has criticised the growing trade deficit between both the countries. The US trade gap with China indicates that Americans use more Chinese products than vice versa.

Even though the US economy remains healthy, the trade war has cast a shadow over the global economy and upsets financial markets. Both US and international firms have said they are being harmed. The IMF warned a full-blown trade war would weaken the global economy.

Considering the impact of escalating trade war, both China and the USA appear closer than ever to an accord that would end their trade war. Will they reach an agreement? Nothing can be predicted as there are many hurdles in this way. If the agreement take place, will it lead to stable trade phase between the two superpowers? Will this trade agreement lead towards cooperation? The answer is “No”, it is just one step in the relationship.

The trade agreement has certain factors, the most likely component is a pardon on tariffs that would only ease short-term US trade deficits through China’s promise to purchase more US goods. But the question is, will China-US trade end all wars? China and the USA will have many more battles to fight when the trade war ends. Negotiators are focused on resolving a long-running tariff dispute but the conflict between Washington and Beijing extends far beyond sales of soybeans and aluminium. Tensions have broadened to include technological, political, ideological and military dimensions.

The two largest economies in the world battle for ideological, technological and economic dominance, and trade agreement will not end these battles. Both the powers having different ideologies, Capitalism and Communism, want to dominate the world. As China is focusing to promote the communist ideology around the world. In the past the USA has been containing those powers who tried to dominate the world, and it will do the same to resist China rising as a global power.

It would be wrong to consider that any trade agreement between China and the USA will lessen the tensions. In fact, apart from trade, China and the USA will compete for international investment, economic mutual dependence, and technological dominance. The effects of China’s Belt and Road Initiative, its role in the International Monetary Fund and efforts to divide European Union will further increase tensions.

Now the question arises that whether China and the USA will continue to cooperate in near future after trade agreement? This is just the beginning of new phase in trade dispute. No one can imagine the “end of all wars” with China-US trade, as both are involved in a competition for dominance and perfectionism.