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.

“When governments permit counterfeiting or copying of American products, it is stealing our future, and it is no longer free trade.” So said US President Ronald Reagan, commenting on Japan after the Plaza Accord was concluded in September 1985. Today resembles, in many respects, a remake of this 1980s movie, but with a reality-television star replacing a Hollywood film star in the presidential leading role – and with a new villain in place of Japan.

A senior U.S. State Department official’s inflammatory comments about a “Clash of Civilizations” reignited debate about how to view history and differing cultures. The Conference on Asian Civilizations Dialogue, hosted in Beijing this May, offered a more level-headed and equitable path to understand civilizational differences.

President Trump never intended to resolve the trade war he created with China. Instead, he will leverage his tariffs to blackmail China into following his way.

Why was the Chinese government unwilling to accept Trump’s last minute demands during trade talks? Look to history: 2019 marks the centenary of the anti-imperialist May 4th movement. China can hardly be accepted to surrender to a 21st-century “unequal treaty”—if the US government understood this aspect of Chinese culture better, negotiations would proceed more smoothly.

The Trump administration has begun applying military pressure on China, not only in traditional areas of friction such as the South China Sea and Taiwan, but using arms control. Recent American withdrawal from the US-Russia INF Treaty may be part of a strategy to draw China into a potential new nuclear agreement.

The trade war has not gone as U.S. policymakers expected—China has not given up easily. This overconfidence came from an inflated view of America’s market boom, which is merely a short-term “sugar high” produced by Republican tax cuts. A more serious misjudgment was underestimating China’s economic strength and national resolve.

While the current China-US trade war is undoubtedly hurting both economies, the conflict may prove beneficial Chinese society in the long sweep of history—the conflict may provide a catalyst to push forward a new model of Chinese reform and opening based on high standards.