December 27, 2019

The U.S.-Chinese Trade War Just Entered Phase 2

By Peter Harrell

The Trump administration’s “phase one” trade deal with China may mark the end of the first chapter of the trade conflict between the United States and China, which saw Washington embrace a confrontational approach. But even if China meets its commitments under that agreement, the deal will not mean the conclusion of the broader competition between the two powers. The forces of geopolitical rivalry and the sharp differences between China’s state capitalist model of economic development and the U.S. economic system are too great. Instead, the deal will mark a pivot to a second phase of economic competition, one which will be fought with export and import controls, investment restrictions, and sanctions rather than with tariffs.

Over the past two years, Washington has been quietly building a legal and regulatory architecture for this campaign. In 2018, U.S. Congress enacted legislation to enhance controls on the export of emerging technologies, such as advanced robotics and artificial intelligence, and bolster reviews of foreign investment in the United States. In November 2019, the Trump administration and Congress took steps to block U.S. companies from using Chinese telecommunications network equipment in the United States. There is increasing discussion in Washington about additional restrictions on business and investment relations between the United States and China, such as limits on federal employee retirement fund investments in China.

Read the full article in Foreign Policy.

  • Commentary
    • Defense One
    • May 11, 2021
    When and Why China Might—or Might Not—Attack Taiwan

    Washington should continue to emphasize to Beijing the costs of aggression and the value of the status quo for China, the region, and the world...

    By Jacob Stokes

  • Video
    • May 6, 2021
    Why China’s eventual aims with Taiwan could have a major global financial and economic impact

    On CNBC’s Worldwide Exchange, Martijn Rasser discusses the rise in tensions between China and Taiwan, potential responses by the U.S. and G-7 countries, and whether Beijing co...

    By Martijn Rasser

  • Reports
    • May 4, 2021
    Sanctions by the Numbers

    Cyberattacks pose a serious threat to U.S. national security and the integrity of the global commerce and financial system, especially when state-sponsored actors conduct and/...

    By Jason Bartlett & Megan Ophel

  • Commentary
    • Foreign Affairs
    • May 3, 2021
    China and Russia’s Dangerous Convergence

    Any effort to address either Russia’s or China’s destabilizing behavior must now account for the two countries’ deepening partnership....

    By Andrea Kendall-Taylor & David Shullman

View All Reports View All Articles & Multimedia