Brian M Downing
The US and China are heading for a trade war, though Washington’s positions are subject to sudden change. The depth and duration of the conflict can’t be gauged but concerns are mounting that it might cause a global recession or worsen an impending one.
The contest takes place amid a portentous change in geopolitics. China is restoring itself as the center of the world – economically, culturally, and politically. The US has held this position since the end of World War Two and China is determined to take its place. Beijing can use the trade war and recession to its advantage.
Domestic turmoil
In recent years social divisions inside the US have deepened, all the more so with the accession of President Trump. Rising unemployment will worsen things, perhaps greatly and jarringly. Gini indexes show increasing concentration of wealth over the last twenty-five years. Middle classes, once the hallmark and source of pride for the nation, are diminishing. Household debt is roughly what it was in 2008. Though many people consider themselves middle-class, the illusion may become untenable.
Racial antagonisms are higher than at anytime since the sixties when major cities were ablaze. Today a large Hispanic population feels marginalized, oppressed, and vilified. White nationalists feel the same and are increasingly vocal and sometimes lethal. Smaller sects, clubs, and self-proclaimed resistance movements are proliferating on both ends of the teetering political spectrum.
Rising unemployment will worsen these divisions and perhaps bring deep turmoil. Today opposing demonstrators are held in check, if barely, by hundreds of police in tactical gear with armored vehicles nearby. The scenes are reminiscent of Northern Ireland during the Troubles.
Riven at home, the country might not be able to act in a coherent way in the world. American power will not collapse. It will not parallel Iran in 1979 or the Arab world a few years ago. But a watershed may be coming.
Standing in the world
The effects of a trade war will not be confined to East Asia and North America. They will be global, as in the thirties and in 2008. Even though China is clearly guilty of currency manipulation, IP theft, and high tariffs, blame for the downturn will probably be laid more at Washington’s doorstep than at Beijing’s.
Anti-American sentiment has been high for decades and owing to the White House’s heavy-handed and truculent nature, it’s deep and widespread. China may soon have the dominant economy and anti-Chinese sentiment will come along. For the present, however, anti-American sentiment is higher and blame for the recession will more readily attach to it.
Inside the Middle Kingdom
A downturn will affect millions of Chinese, perhaps tens of millions. However, it’s unlikely to cause trouble for the leadership or turmoil in society. Rulers enjoy a large reservoir of legitimacy. They’ve raised the country’s economic output and put the country on the path to restored greatness.
The populace has seen its income rise greatly over the last quarter century. A year or two of hard times will not register deeply. China is once again influential and powerful. Its engineers, businessmen, and diplomats are respected around the world. Its warships sail into blue waters and visit foreign ports.
The Chinese will not blame their leaders for the downturn. In any case, they’ll have no opportunity to do so openly at polls. They will blame the blustery dilettante in Washington. His flailing about is a welcome sign of America’s incoherence and decline.
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Beijing might be asking if it should play the recession and American politics to bring about a jarring lurch to left or to keep the present administration. President Trump is indeed confrontational and not just over trade. He’s negotiating to attract North Korea out of the Chinese sphere and selling more and more arms to Taiwan. But he’s also bringing turmoil at home and tension with allies. Beijing may judge its strategic goals will be best served by a second Trump administration. It may be attracted to the slogan of four more years.
© 2019 Brian M Downing
Brian M Downing is a national security analyst who’s written for outlets across the political spectrum. He studied at Georgetown University and the University of Chicago, and did post-graduate work at Harvard’s Center for International Affairs. Thanks as ever to Susan Ganosellis.