Trump has the US, China on cusp of a new Cold War
WASHINGTON — President Donald Trump is confident that the United States is winning its trade war with China. But on both sides of the Pacific, a bleaker recognition is taking hold: The world’s two largest economies are in the opening stages of a new economic Cold War, one that could persist well after Trump is out of office.
“This thing will last long,” Jack Ma, the billionaire chairman of Alibaba Group, warned a meeting of investors Tuesday in Hangzhou, China. “If you want a short-term solution, there is no solution.”
Trump intensified his trade fight this week, imposing tariffs on $200 billion worth of Chinese goods and threatening to tax nearly all imports from China if it dared to retaliate. His position has bewildered, frustrated and provoked Beijing, which has responded with its own levies on U.S. goods.
The diplomatic stalemate has many in the business and policy communities considering the possibility that the United States may be in a protracted and economically damaging trade fight for years to come and wondering what, if anything, America will gain.
Kevin Rudd, a former prime minister of Australia and an expert on China, said in an interview that 2018 signaled “the beginnings of a war of a different type: a trade war, an investment war and a technology war between the two great powers of the 21st century, with an uncertain landing point.”
Signs of fallout were already apparent: Ma backed off a pledge he had made in a meeting with Trump last year to create 1 million jobs in the United States, telling the Chinese news site Xinhua that “the promise was made on the premise of friendly U.s.-china partnership and rational trade relations,” a premise he said no longer exists. “Trade is not a weapon,” he said.
The latest tit-for-tat leaves little room for concessions, at least in the interim, as both countries dig in their heels and China tries to remain strong, despite an economic softening that Trump clearly sees as an opening to force Beijing’s hand.