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Coming to Terms with China's Rise

April 2, 2019 in Economics

By Daniel J. Ikenson

Daniel J. Ikenson

U.S. and Chinese negotiators may soon reach terms to ease the
tariffs that have been uprooting supply chains and straining
relations. That would be welcome news to beleaguered farmers,
manufacturers, and consumers. But unless that deal compels Beijing
to end its predatory technology practices and discriminatory
commercial policies, détente will give way to intensified
sanctions, collapse of the rules-based trading system, and the
onset of an economic cold war. Depressingly, that outcome may be
unavoidable, regardless.

That may sound over the top to those who think this dispute is
about trade imbalances and the solution is for Beijing to purchase
more U.S. commodities and lower a few market access barriers.
President Trump might be tempted to accept that kind of deal,
declare victory, and boast about how the trade war was easy to win.
But that outcome would trivialize the compelling evidence of
China’s transgressions, leave persistent structural problems
unresolved, and provide an opening for Trump’s 2020 rivals to
outflank him on the China issue.

Nor might that dire warning resonate with those who see
Trump—and not Chinese policies—as the bigger problem.
Certainly, Trump’s misinformed, zero-sum view of trade; his
disdain for diplomacy and decorum; his grievance-laden,
protectionist, nationalist narrative; and his contempt for global
trade rules and institutions are the proximate causes of the trade
war. But the United States and China were heading for a showdown
long before Trump’s arrival and it is fanciful to assume U.S.
policy will revert to historical norms once Trump is gone.

There is cause for doubt
that any deal to end the trade war will be long-lasting.

The tone may change, and some tactics may, too, but for all the
divisiveness Trump foments and exploits, his blunt force approach
to the China relationship uniquely attracts broad bipartisan
support. Many are willing to excuse Trump’s defects because
in his confrontation with China they see a higher purpose. Whether
to make amends for years of ignoring China’s transgressions
or to preserve America’s technological edge or to reassert
the primacy of Pax Americana and compel a rising China to stay in
its lane, the shift in public opinion and among policymakers toward
a more unyielding posture is unmistakable.

These perceptions, which have been nourished by a combination of
fact, fallacy and hyperbole, didn’t emerge overnight. They
were sewn in the wake of the Great Recession, grew roots, and
proliferated over the course of the last decade. Today, China is
regarded as a strategic rival—if not an imminent
adversary—intent on leapfrogging the United States to the
technological fore by any means necessary. And that is cause for
doubt that any deal to end the trade war …read more

Source: OP-EDS