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
CommentaryThe United States Can’t Afford the Brutal Price of Chinese Solar Panels
Buying Chinese solar panels to reduce emissions is like using gas to put out a fire....
By Henry Wu
CommentaryIsrael’s growing ties to China are testing its relationship with the U.S.
As a sovereign, high-tech, democratic powerhouse, Israel has a fundamental stake in the contest between China and the free world....
By David Feith
CommentaryBipartisan support for taking on China goes only so far
The embrace of great-power competition comes with a critical caveat. Both parties’ enthusiasm for the concept abruptly ends when it requires doing something politically hard....
By Vance Serchuk
CommentaryHow the Afghanistan Withdrawal Costs the U.S. With China
U.S. departure from Kabul could end up undermining, rather than strengthening, America’s strategic hand against China....
By Richard Fontaine & Vance Serchuk