How to prevent an economic cold war between the US and China
The U.S. and China, the world’s largest economies, have been balancing between two divergent paths for 25 years. The first is collaborative partnership —leading from cooperative interdependence toward productive wealth generation and technological progress. The second is a costly and destructive economic cold war.
Pulling China into the World Trade Organization was an attempt to take the first path. President Trump is taking us on the other.
A 145 percent tariff is more than a wall to stop trade between the U.S. and China. It too easily could be, like Hitler’s invasion of Poland in 1939, the start of a world-wide economic war.
Am I being too dramatic? Not really. The U.S. economy is $30 trillion and China is $19 trillion. The next biggest economy, Germany, is $4.9 trillion, then Japan at $4.4 trillion and India $4.3 trillion. One hopes the EU ($20.9 trillion) could pull itself together sufficiently to offer a constructive counterbalance, but that is unlikely.
The U.S. and China are by far the biggest trading partners for virtually every nation in the world. Not one country will escape this war. Some could be crushed by it. (A longer academic article that I co-authored explored how this came to be.)
Add in the American-imposed wall between China’s Huawei-provided telecommunication systems and the American-approved systems (Ericsson and Nokia), and the hard choice gets more difficult and more divisive.
The cost will be immense: massive costly........
© The Hill
