OPINION:
America is right to finally push back against China’s long-standing trade and economic abuses. However, what happens if the trade war launched by President Trump fails to convince Chinese President Xi Jinping to change Beijing’s policies? What if Mr. Trump decides to escalate with higher tariffs? There are three dangers America faces: Recession here at home, pushing China and Russia together, and an increased risk of war.
Beijing has long practiced intellectual property theft and forced technology transfers from businesses that want to do business in China. The list of Beijing’s actions against free trade is long, and these two practices stand out as among the worst. Mr. Trump campaigned on getting tough on China and put tariffs on $250 billion worth of Chinese exports to America. Beijing retaliated with tariffs on $110 billion of U.S. exports to China. At the 2018 G20 summit, both Mr. Trump and Mr. Xi agreed to a 90-day ceasefire. Currently, officials are attempting to resolve differences before the truce ends. Meanwhile, Washington is set to cover all Chinese goods with tariffs.
It is possible the get too tough on China.
America’s interests will not be served well if the trade war resumes at new heights sufficient to cause an American and Chinese recession. Americans would suffer as normally cheap goods from China become increasingly expensive. Imagine if working-class families could no longer find everyday items that fit their budgets. Clothing, computers, phones, nearly everything at Walmart and similar big box stores would cost more. Also, imagine if these families faced layoffs as the factories, energy firms and farms that export U.S. goods to China close due to Beijing’s tariffs. To be sure, Chinese consumers and Chinese laborers would see higher prices and job-loss as well, hurting the two biggest economies and the world.
Moreover, such a trade war could realize the old nightmare of a real alliance between China and Russia. Both are great powers in their own right and are the only other countries besides the United States with nuclear intercontinental ballistic missiles that can reach anywhere in the world. U.S. foreign policy is foolishly pushing Moscow and Beijing — which are natural adversaries — closer together. Washington’s attempt to take them both on at once is doomed to fail and comes with a high risk and cost. Former Secretary of State Henry Kissinger got it right during the Cold War by playing them off of each other but Washington is forgetting that lesson.
Finally, there is the danger of a trade war that becomes a real war. In such a scenario, U.S. warships and planes would be sent deep into Chinese-held or dominated areas that are bristling with long-range defensive weaponry. Such a war would be disastrous and the 2018 National Defense Strategy Commission Report warns that America would face heavy losses. It would be better to instead cooperate with America’s allies to improve their own long-range defenses. But, in the meantime, a trade war could cause a real one in one of two ways.
First, increasing tensions around tariffs and tough words cause each side’s militaries and civilian leadership to get increasingly jumpy. Units could be put on higher alert and leaders could be afraid of a surprise move by the other side or the appearance of backing down. For instance, recall the standoff between North Korea in the fall of 2017 and spring of 2018, before the first summit between Mr. Trump and North Korean leader Kim Jong-un in June 2018. All it would take is a false missile alert, a clash between two ships or planes or some kind of accident to cause one side to think it was under attack.
The second possibility is that the trade war goes too well and Mr. Xi faces domestic upheaval due to the Chinese economy bottoming out. This could happen because of China’s continuing top-down control over much of its economy and its massive government debt estimated to be between 255.7 percent and 300 percent of its gross domestic product.
Most leaders derive their legitimacy from prosperity and defense of their people and territory. Mr. Xi does not have the legitimacy of an election and the Chinese Communist Party has built its rule on the economy and nationalism.
If Mr. Xi no longer has prosperity to stand on, he could choose to stoke nationalism in order to maintain power if the domestic situation devolves enough. A show of force to rally China around the flag could turn into a military misadventure — either by mistake or by a decision to roll the iron dice. After all, Beijing’s military regularly mulls over how it could “win” a quick war against America and then make peace once China has de facto accomplished its objectives. Needless to say that such plans sound eerily similar to the gamble of Imperial Japan’s attack on Pearl Habor in response to American sanctions over U.S. oil exports.
Ultimately, America is right to defend against China’s illegal trade practices, but it should not come at the expense of America’s prosperity and security. Washington should pursue a realistic, interests-based strategy to address the strategic challenge from China.
• John Dale Grover is an assistant managing editor for The National Interest. He is also a fellow at Defense Priorities and a writer for Young Voices.
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