The United States and China are in the final stage of completing a trade deal that will likely be finalized and announced at a summit later this month, the Wall Street Journal reported Sunday.
But while it appears this latest battle will soon be over, the “Great Power Competition” between the two superpowers may only be just beginning.
As China continues to emerge as a budding superpower, experts are warning that a broad untangling of the two economies could be inevitable as policymakers in Washington increasingly view Beijing as a threat to American military and economic primacy.
“The trade war is not fundamentally about trade at all; rather, it is a manifestation of the escalating strategic competition between the two powers,” Minxin Pei, a professor of government at Claremont McKenna College, argued recently in Project Syndicate.
Pei concedes that U.S. officials have sincerely held complaints about the status quo of trade relations between the countries, such as widespread violations of intellectual property rights. But to focus only on these complaints, Pei says, is to miss the forest for the trees.
Zero-Sum Shift
Over the weekend, two articles published by leading trade experts found that the ongoing dispute is already taking a significant toll on the U.S. economy. But for President Donald Trump and his administration – these loses may be more of a feature than a bug.
“Trump and a lot of the conservatives who support him see international relations in very zero-sum terms: If someone else is winning the U.S. is losing; the U.S. needs to dominate all these relationships,” Matt Duss, a former analyst at the Center for American Progress and the Senior Foreign Policy Advisor to Senator Bernie Sanders, said in a recent interview with Business Insider.
Put another way, the Trump administration appears to be more concerned with relative gains than absolute ones as China is increasingly viewed as a rival and a potential peer. From this perspective, if both sides lose, but China loses more, then the U.S. wins.
“I think that [U.S. Trade Representative Robert Lighthizer] has thought hard about the tools that the United States has to inflict short-term harm on China even if that means imposing short-term harm on the United States,” Paul Musgrave, a professor of political science at the University of Massachusetts Amherst, told The Globe Post.
Hegemony in Asia
While the U.S.-China economic rivalry is global in scope, the epicenter of what many analysts call the Great Power Competition is in China’s backyard.
The U.S. has had a military presence in the Pacific since 1898 and has been an unrivaled power in Asia since the end of the Second World War.
But with China making rapid improvements to its military capabilities while also attempting to expand its territorial claims in the South China Sea, the prospect of a Chinese sphere of influence in the region is becoming increasingly conceivable.
“Because China was subjugated by Western powers for centuries, they feel like this is their time to essentially be the dominant power in Asia,” Harry Kazianis, the executive editor of National Interest magazine and an analyst specializing in Asia, told The Globe Post.
“If China is going to become a superpower and essentially dislodge the United States from Asia, the foundation of that is going to be economic,” he added. “What the Trump administration is doing is essentially a containment strategy on steroids.”
As recent analyses show, pursuing that containment strategy could be quite costly for U.S. companies and consumers, particularly if Trump or future presidents continue to try to deny Chinese firms access to American markets in the future.
“I wouldn’t be shocked if in two to three years you can’t go to Walmart anymore and buy a forty-five-inch TV for two hundred bucks,” Kazianis said.
But there are also potential costs associated with ceding geostrategic influence to China in Asia and elsewhere.
According to Musgrave, the more the U.S. signals its unwillingness to maintain its foothold in the Pacific, the more it “sends signals to countries like Vietnam or Indonesia that either it’s time to make an accommodation with the Chinese or you’re going to be more on your own.”
Throughout the 20th century, Washington put an enormous amount of energy into establishing and maintaining its political and economic hegemony in the region.
Nearly 60,000 Americans died in Vietnam in an effort to prevent the country from “falling to Communism,” and the U.S. was willing to abet a genocide in East Timor in 1975 in order to maintain its partnership with the government of resource-rich Indonesia.
The fate of Taiwan – long a point of contention between the two powers – is also at stake.
“At the end of the day, if the United States pulls back over the horizon, what exactly is the guarantor that Taiwan will be swallowed up [by China] or that Japan won’t decide to accelerate its rearmament?” Musgrave said.
“We’ve gotten used to 75 years of the United States being the unchallenged power in the Pacific and we don’t know what a modern Pacific would look like without the United States.”
5G and the Digital Frontier
The rivalry between the powers is also no longer constrained to the physical world. Another point of contention is the digital sphere – a new frontier that remains largely up for grabs.
“The big point for me is that it is the technological rivalry that is key – technologies that have both commercial and military implications,” Rosemary Foot, Professor of International Relations and Emeritus Fellow at the University of Oxford, told The Globe Post.
Citing security concerns, the Trump administration is leading an effort to isolate Chinese tech giant Huawei and bar the company from American and Western markets as much as possible.
The Wall Street Journal reported in January that the U.S. Justice Department is in the “advanced stages” of a criminal investigation targeting the company, and Huawei’s CEO, Meng Wanzhou, remains in de facto detention in Canada as American officials seek to extradite her to the U.S. on charges related to sanctions on Iran.
Huawei is the largest telecommunications equipment manufacturer in the world and has leading proprietary 5G (fifth generation) cell phone network technology.
With 5G on the horizon, Trump said in a February 21 tweet that the U.S. is feeling the pressure to match Chinese advancements and retain a degree of tech-industry dominance.
“I want 5G, and even 6G, technology in the United States as soon as possible,” he said. “American companies must step up their efforts, or get left behind.”
As Foot alluded to, the consequences for the U.S. lagging behind in the tech industry are not purely commercial.
The more Chinese technology and Chinese-manufactured telecommunications parts proliferate, the more China threatens American “communications network dominance” and gains an edge in intelligence gathering, Musgrave said.
War Games
The tech competition also has significant military implications. While Washington continues to drastically outspend Beijing (and much of the rest of the world combined) on defense, Chinese advancements in artificial intelligence, missile defense, and naval technology are not trivial.
American soldiers are paid much higher wages than their Chinese counterparts, Musgrave noted, so the raw price tag of the respective militaries doesn’t necessarily reflect their relative power.
Further, assuming a military confrontation between the two powers doesn’t result in nuclear holocaust (which it very well could), China would enjoy a significant home-field advantage.
“It’s not a competition between two militaries. It’s a competition between two militaries or whatever they can bring to bear in a certain theater,” Musgrave said.
So if there were an escalation between the two countries navy’s in the South China Sea, or if China were to attempt to annex Taiwan, then “[China] would just have to simply credibly threaten to the United States that the costs of intervention would be so high … that they would be able to credibly deter the U.S. from intervening.”
Inevitable Unraveling?
With all this at stake, it’s increasingly clear that regardless of what happens in the coming weeks, the Great Power Competition has only just begun.
As Pei argues, “even if a comprehensive agreement is reached,” the “unraveling” of the two countries economies will continue.
That unraveling will have “massive” economic ramifications that will be felt around the world as the two countries scramble to fill the role that they’ve provided one another.
“Lighheizer’s bet – and it’s very, very finely calculated – is that the Chinese need access to the American market more than American consumers need access to Chinese goods,” Musgrave said.
And while Kazianis notes that there are powerful vested business interests on both sides that would like to see the status quo maintained, Trump has also surrounded himself with the “hawks of China hawks,” such as National Security Advisor John Bolton and economic advisor Peter Navarro.
“If current trends continue,” he said, “the United States and China at this point are destined to be enemies.”
More on the Subject
The United States warned its citizens in January they could face arbitrary action by authorities when they visit China, following the detention of a number of Canadians.
Updating a travel advisory, the State Department maintained its previous guidance that Americans should “exercise increased caution” in China but stopped short of discouraging visits.
While the language was largely the same as earlier, the State Department warned of “arbitrary enforcement of local laws,” sudden prohibitions on exiting the country and harassment of U.S. citizens of Chinese heritage.