U.S. President Donald Trump’s most recent threat to target all $505 billion in annual Chinese imports to the United States is only the latest development in the looming U.S.-China trade war. While Trump and his team are preparing for an economic competition focused largely on tariffs, policymakers must prepare for a multi-domain competition rooted in Chinese political posturing, domestic propaganda, and economic coercion targeting American firms operating in China. These unconventional challenges will demand a comprehensive U.S. response.
Many Americans agree that solving the distorted U.S.-China economic relationship is critical. But the answer isn’t to be found in trade alone. The root of this problem is not the deficit, but China’s deeply held belief that it is not beholden to the same rules as other nations.
In the trade war, the U.S. toolbox remains limited in comparison to what China’s state-directed economy can wield. Trump remains politically constrained by a Congress understandably eager to roll back his tariffs on U.S. allies, and he is fighting pushback from the U.S. private sector, keen to protect its investment in China at all costs. In contrast, Chinese President Xi Jinping sits at the top of an authoritarian system that enables him to implement policy virtually unchecked. The vast reach of the CCP’s apparatus can be used to support behavior that falls outside of World Trade Organization norms, such as boycott measures, baseless customs restrictions, and export bans, in the pursuit of victory.
To date, China has responded to U.S. tariffs dollar for dollar. The pending round of $200 billion in additional tariffs will be challenging for China to match, given the trade imbalance. Chinese officials have publicly stated that they intend to take “qualitative” measures in response to U.S. tariffs. If these measures look anything like China’s past actions targeting South Korea’s Lotte Mart stores, Japan’s rare earth minerals, and Norwegian salmon, we should anticipate massive state-enabled economic coercion targeting U.S. private-sector interests operating in China.
Read the Full Article at Foreign Policy
More from CNAS
ReportsRevitalizing the U.S.-Philippines Alliance to Address Strategic Competition in the Indo-Pacific
As competition with China intensifies across the Indo-Pacific, the United States is looking increasingly to its wide network of alliances and partnerships to confront the chal...
By CNAS U.S.-Philippines Alliance Task Force, Lisa Curtis, Joshua Fitt & Zachary Durkee
CommentaryThe World Is Still Failing Afghan Women
The contrast between the bravery of these Afghan women and the slinking cowardice of the international community could not be starker....
By Kelley Eckels Currie & Amy K. Mitchell
CommentaryIndia’s Last Best Chance
The United States and its allies can offer India more—diplomatically, financially, and militarily—than can Russia....
By Lisa Curtis
VideoN. Korea nuclear test rumored as U.S. celebrates Memorial Day
Last week, to the alarm of countries in the region, North Korea launched three ballistic missiles, including an ICBM. Now, at any time, the North is reportedly prepared to do ...
By Dr. Go Myong-Hyun