May 24, 2019

The Forever Trade War

America’s contest with China is only beginning.

America’s relationship with China has taken a turn toward the confrontational. Tariffs are rising, rhetoric is heating up, and both sides are digging in. For all the efforts at a resolution, this current phase will likely be remembered as merely the opening skirmish in a long-term competition. The China contest now represents a key organizing principle of American foreign policy. Even a successful trade agreement would represent only the end of the beginning in a new era.

If Donald Trump and Xi Jinping strike a deal—perhaps at their planned meeting during next month’s G20 summit—it will be partial at best. Perhaps Beijing will commit to buy more American farm products, natural gas and autos, for example, while pledging (again) not to steal intellectual property. Such a deal would resolve just a fraction of the economic disagreements dividing Washington and Beijing, and arguably not the most important ones. Larger issues—like subsidies to Chinese state-owned enterprises, unfair investment rules, forced technology transfer, and government influence over firms like Huawei—are intrinsic to the fundamental Chinese economic model. They are largely intractable and not amenable to resolution.

An indication that this conflict is here to stay is the striking bipartisan support for President Trump’s approach. Unlike every other aspect of the president’s foreign policy—toward Iran, for instance, or North Korea, Saudi Arabia, or Russia—Washington’s Democrats and Republicans largely agree that the time for a reckoning with China has come. Democratic leaders on Capitol Hill tend either to signal agreement with the president, suggest that he’s not tough enough with Beijing, or remain silent. Some quibble with Trump’s objectives (such as his fixation on reducing the trade deficit), but virtually everyone in power seems to believe that America’s tone should be sharp and tolerant of risk.

Read the full article in The Atlantic.

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