December 27, 2019
The U.S.-Chinese Trade War Just Entered Phase 2
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.
More from CNAS
-
Indo-Pacific Security / Energy, Economics & Security / Technology & National Security
Selling AI Chips Won’t Keep China Hooked on U.S. TechnologyU.S. policy should not rest on the illusion that selling chips can trap China inside the American tech ecosystem....
By Janet Egan
-
Will New Delhi-Beijing Move Beyond Friction Points? | Ex-White Official On India-China Reset
Prime Minister Narendra Modi on Friday said that India and China, as two major economies, must work together to bring stability to the global economic order. NDTV's Gaurie Dwi...
By Lisa Curtis
-
How Big Will China’s Nuclear Arsenal Get?
China’s nuclear expansion is already feeding an arms race—a contest that is accelerating partly because the finish line remains unknown....
By Jacob Stokes
-
Game Over?
The trade wargame suggests that sustained high tariffs could create leverage and urgency to spur action toward a productive restructuring of the international trade system....
By Emily Kilcrease & Geoffrey Gertz