Trade Trap: China and the US Must Avoid a ‘New Cold War’
beijing and Washington appear to be managing trade tensions, but the risks of Trump’s ‘america First’ policy remain.
As the world’s two largest economies, China and the US have a mutual stake in maintaining good relations, but US President Donald Trump’s attack on China’s trade practices and economic policies have roiled relations between the two countries.
While Beijing and Washington appear to be moving toward a deal to avert a further escalation in trade tensions, the risks of Trump’s ‘America First’ policy remain. Wang Yong explains what is at stake and shows a path forward. us PRESIDENT Donald Trump’s trade war against China and the world is subverting the global open trade order and effectively dismantling the World Trade Organization as the universal authority for the resolution of trade disputes.
This trade friction, which is not limited to China and the us, has deep roots in the restructuring of domestic politics taking place in the two largest economies in the world, as well as in changes in the mutual perceptions the countries have of one another. While China-us interdependence and common interests continue to expand, their technological and strategic competition have come earlier than expected. economic competition, combined with differences in ideology, development models and political systems, may push China and the us into the dangers of a “new Cold War.”
how to predict the impact of a possible trade war on China-us relations? how will the domestic structural changes taking place in the two countries affect their relations? Can China-us economic and trade relations still play a stabilizing role in the world? Can China and the us shake off the prospect of a new Cold War? These are the main questions I will address in this essay.
trump’s trade war with China and the world
On March 22, the Office of the us Trade Representative (ustr) released a section 301 report on China’s trade practices. based on that report, Trump issued a presidential memorandum that called for countering China’s “economic aggression,” and instructed his adminis-