Trump’s trade wars will disrupt global trade.

Trump's protectionism is destined to endure because there is no compromise solution, James Nolt argues. Trump's idea of the problem is too far removed from reality to allow his tariff pressure to succeed.

China will endure the trade war and march resolutely into the New Era. China-US trade friction has continuously escalated since the beginning of 2018. After assuming the US presidency, Donald Trump has attempted to curb the general trend of economic globalization, change trade cooperation, and reverse trade deficits.

Playing a game of chicken, the two countries are just like two cars racing to each other, expecting the opponent to dodge at the last minute. Given the low speed, there will be limited damage even if no one dodges. But more rounds of collision with higher speed will inflict more serious damage on both.

As the Chinese economy becomes larger and more international, the externalities of the Chinese mode have challenged the international market. While assessing the Chinese model, I believe it necessary to de-ideologize, and draw upon the lessons of East Asia.

As the international order moves from an era of US-led hegemony to one of multipolarity, overlapping spheres of influence will increase the chances of economic and political friction. Global prosperity requires that the multilateral free-trade system be maintained and strengthened, and this can be achieved only if the national security interests of regional powers are assured.

China and US should find a way to manage their disputes without stumbling into a trade war.

As President Trump seeks to ramp up pressure on China by implementing additional tariffs, he and his administration may find the constraints of international law and WTO procedures hard to circumvent. Washington should suspend its tariff threat, sit down with President Xi’s reform-minded team and press for the further liberalization of China’s foreign direct investment and intellectual property rights regimes.

Dominic Ng warns that closer US scrutiny into investments by foreign companies could lead to a blanket ban on Chinese funding in specific sectors, in turn dealing a blow to US jobs, America’s investors, and its reputation for transparency and openness.

The US’ increasingly hard line on China makes it harder to avoid confrontation.