Just when a trade agreement between the United States and China appeared to be in sight, negotiators found themselves back at square one. The immediate reason for the disruption was China’s insistence on a substantially rewritten draft agreement, which, according to US President Donald Trump’s administration, reneges on previously agreed terms. But the root cause of China’s changes to the draft – the reason behind its reluctance to meet US demands – lies in a fundamental miscalculation by the Trump administration.

Considering the Sino-US trade war to be a mere quibble over tariffs and deficits misses the big picture: the clash of these two economic titans threatens not only bilateral relations, but also global prosperity and even the peaceful world order that has prevailed since World War II.

China's State Council Information Office on Sunday published a white paper titled "China's Position on the Economic and Trade Consultations."

As America’s China policy turns from engagement to competition, Beijing must face facts: Trump or no Trump, the US has reached bipartisan consensus on containing China. How should Beijing respond? Where will the current confrontation lead? In crafting a new strategy towards the US, China must consider the ultimate goal of its rise, and how America fits into the big picture.

Trade and economic ties were long the ballast in China-US ties — despite political disputes, the business community was in favor of warmer relations. Now the ballast threatens to turn into a stumbling block, as trade may be the sticking point preventing both nations from returning to a friendly stance, while exacerbating their superpower competition.

Trump’s idiosyncratic “art of the deal” apparently means putting extreme pressure on your negotiating partner to force them to surrender — but the US approach is based on faulty Trumpian economic assumptions and a misread of China’s growth history, and will only backfire.

“They would like to make a deal. We’re not ready to make a deal.”