For the last two years, the conflict between the United States and China has dominated the economic and financial-market debate – with good reason. After threats and accusations that long predate US President Donald Trump’s election, rhetoric has given way to action. Over the past 17 months, the world’s two largest economies have become embroiled in the most serious tariff war since the early 1930s.

“Competition” carries any number of connotations, from benign to malicious. Clarity about exactly what the Trump administration means would be helpful.

A worsening relationship is probably unavoidable if the two countries adhere to their current domestic choices. If they want better ties, both need to make adjustments, but that seems unlikely.

If financial sanctions are the next battlefield for China and the United States, the pain may be worse than tariffs.

Cutting ties would undoubtedly hurt both countries. But when wishful policies collide with the iron laws of economics, the latter are certain to prevail.

A broad perspective and reference to history is required to properly understand and respond to the recent difficulties. There is reason to keep a positive attitude.

This doesn’t mean soft appeasement or concession. Outreach is conducive to the development of stable relations and serves China’s own long-term national interests.

He Yafei, a leading scholar of American studies in China, spoke with China-US Focus host James Chau in Hong Kong on Nov. 15. The following transcript has been lightly edited for clarity.

The more China and the US are coupled, the more insecure they feel. Some sort of split seems inevitable.

Some wrestling may be needed before they can seriously look at decoupling.