S. George Marano

Opinion | All-out trade war between China and the US leaves no room for optimism

S. George Marano says disputes over trade practices are only part of the larger power struggle between the two. Despite recent conciliatory remarks, the conflict is unlikely to wind down any time soon. Expect it to drag on, if not escalate

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The China Zun tower and other buildings are seen through a window in Beijing’s central business district. The prospects for a resolution at the end of the 100-day truce between China and the US are dim, and the trade war is likely to widen and become a protracted battle. Photo: Reuters

S. George Marano

Published: 1:00am, 16 Jan 2019Updated: 8:34am, 16 Jan 2019

Much is being discussed with regard to the US and China seeking a resolution to the ongoing trade war. With representatives meeting, commentators seem optimistic about a solution. Though the optics look encouraging, any agreements should be viewed as short-lived. A resumption of harsher measures, especially from the US, is the most likely scenario.

First, this trade war should be viewed as a tactic in the overall China containment strategy; the ultimate aim of the US is to halt China’s rise. Yet America has never had an economic peer competitor. Its previous conflict with the USSR was fought on ideological grounds.

What’s more, winning or losing the trade war has different requirements for each party. From a US perspective, to win, it needs full Chinese capitulation. From a Chinese perspective, winning means the ability to remain standing. It is hard to see the latter submitting.

On the whole, the US is in the unenviable position of being damned if it does and damned if it doesn't, with respect to the rise of China. Fundamentally, the US believes China is stealing from it.

The rhetoric around forced technology transfers is one of the major sticking points, according to the Trump administration. It should be noted that the World Trade Organisation encourages developed economies to transfer technology to developing economies, of which China is one.