Who Will Win The US-China Trade War?                                                             


It is becoming obvious that Trump wants to start a trade war with China. The question is: who is likely to win this trade war? I feel that the outcome of the war is clear even before the war starts. China has all the factors in its favour, whereas America has everything going against it. Therefore, unlike the matches played in the FIFA 2018 World Football Cup, the result of this match is clear before the game even starts. China is going to win the World Trade Cup. Why does the outcome look like a foregone conclusion to me?

In the last couple of decades, China has become a sort-of manufacturing center of the world. China’s position now can be compared to nineteenth century England. At the end of the nineteenth century, England was manufacturing more than the rest of the world combined. Two centuries later, we find China in almost the same situation. Now, China is contributing maximum to the growth of the world economy as well as to the GDP of the world. Some people call China the engine of the world economy. It is obvious that any country which will pick up a trade war with China has a lot to lose.

Unlike America, China’s dealings with other countries are more on an equal basis. America’s dealings with other countries are generally based on inequality, and are generally heavily tilted toward fulfillment of American interests. Therefore, when America breaks relations with any country, then America is likely to lose more in the long run. This is the most likely scenario in the case of China-America relations. The US wanted to use China against the Soviet Union. Once it accomplished its goal, it turned against China. After the collapse of the Soviet Union, America gradually started turning against China. However, in spite of the American efforts to contain and isolate China, the reverse seems to be happening.

China’s global influence, economy, and share of the global GDP and world trade as well as China’s technological progress, all seem to be on the rise. China’s One Belt One Road Initiative is proving to be a great success. It is obvious that any country which will choose a path of confrontation rather than cooperation with China has a lot to lose. Out of the countries America chose for the Quadrilateral alliance to contain China, Australia is the only country on board. India and Japan seem to have second thoughts. India has taken several measures to reduce tensions and improve relations with China. Japan seems to be contemplating a change in its policy.

China is a much more disciplined and stable society than the US. Moreover, Chinese people have more endurance than American people. A vast majority of Chinese people seem to believe that the Chinese state has improved the quality of their lives. Even though America is the wealthiest country, yet the distribution of wealth is extremely unequal and unfair. Poor people, particularly the minorities, continue to get the short end of the deal. The gap between the rich and the poor is constantly widening. It is very likely that the losses resulting from the trade war will also be shifted to the weaker sections of society. The end result will be a more divided and unstable society. The Chinese people, on the other hand, are more likely to rally behind their leaders, resulting in a more unified country.

America’s European allies, who are already very frustrated with American policies, are going to be more upset with this trade war, resulting in a further widening of the Trans-Atlantic gap. This can lead to more isolation of America. America has already withdrawn from Trans-Pacific Partnership, Paris Climate Agreement, Iran Nuclear Deal, and most recently the UN Human Rights Council; these all show a trend toward isolation and weakening of American influence. Many countries can decide to use their currencies in the mutual deals instead of the American dollar. This can lead to the weakening of the Dollar and loss of the unique status that it enjoyed after the Second World War. Already, the world markets have reacted negatively to the American moves. By escalating the trade war with China, America is going to further destabilize and weaken the world economic order. America should realize that it is the biggest beneficiary of the present economic order, and it has more to lose than anybody else if this economic order collapses.

A growing rift with America will push China even closer to Russia. Already Russia and China enjoy a very close and robust relationship. America should realize that as long as Russia and China are together, the balance of power in the world will remain tilted toward them. America has already lost the status of the only superpower of the world. Does America want to be marginalized further to an insignificant world player? Let us hope that good sense will prevail and Trump will stop escalating the trade war with China.

Dr. Sawraj Singh, MD F.I.C.S. is the Chairman of the Washington State Network for Human Rights and Chairman of the Central Washington Coalition for Social Justice. He can be reached at [email protected].