Cheng Li and Diana Liang discuss the political and security factors that have prevented China and the U.S. from cutting a deal in the current trade dispute. They argue that these obstacles should urge us to look at the bigger picture in order to avoid the disastrous consequences of a trade war, or even worse — risk an actual war.

Many factors have pushed the US to wage a trade war against China, but they are not immutable.

The Chinese mainland has every desire to peacefully reunify with Taiwan, and has every desire to maintain the status quo.

Mattis’ visit to China is really important.

Whilst Trump’s “America First” policy created the largest monthly budget surplus since 1968 (at $214 billion) in April this year and cut unemployment to below 4% for the first time since 2000, US credibility may have been permanently hurt.

China’s new Thirty-One Measures for Taiwan can be appreciated by both sides.

Chinese Foreign Minister Wang Yi said, "We both believe that China-U.S. relationship is the most important bilateral relationship to each other. We both believe that our cooperation far outweighs differences, and opportunities we face far outweighs challenges."

As legal procedures are cumbersome and difficult to reverse, if and when differences among the key stakeholders escalate and come to a head, the only option left for China would be to change the status quo, so that the Taiwan Travel Act is no longer applicable.

For Americans, Taiwan’s defense equation is important. The U.S. does not have an “iron-clad” commitment to defend Taiwan. As President Jimmy Carter once observed, however, the Taiwan Relations Act provides a U.S. president with an option to go to war to protect the island. Indeed, America is Taiwan’s only potential security partner in a conflict with the Chinese mainland.

The PRC’s Taiwan Affairs Office (TAO) recently announced the so-called “31 Measures” relating to working relations with Taiwanese entities. But how genuine are these offers, and will winning wallets lead to winning hearts and minds, to paraphrase Lyndon Johnson?