Are Americans ready for the trade war between the US and China? | Expert opinions

Consequently, there is widespread agreement among politicians and commentators that the US must prevent a “China Shock 2.0” by imposing massive tariffs and trade restrictions on Chinese technologies such as mobile phones, drones and especially electric vehicles, solar panels and green energy plants. President Joe Biden and his predecessor Donald Trump, the likely Republican nominee in November’s presidential election, disagree on most issues. But when it comes to dealing with China, both seem to be vying for the title of America’s most protectionist president.

But the China shock narrative that underlies current U.S. trade policy is deeply flawed. While competition with Chinese producers has hurt some manufacturing jobs, free trade has undoubtedly produced more winners than losers. Certainly, the economic impact of U.S. trade restrictions could be minimized by rerouting Chinese imports through third-country suppliers. Then Americans could buy solar panels made in China as if they had been produced in India—albeit at a higher price. But while this tariff theater may be popular with voters, it is difficult to see how this would improve national security any more than rerouting Chinese fentanyl shipments to the U.S. through Mexico helped solve the opioid crisis.

Moreover, it would take years for “friendlier” countries to build their own manufacturing base that can compete with China, especially given the low prices offered by Chinese manufacturers. In some sectors, such as electric vehicles, China’s manufacturing capacity has given the West an almost insurmountable lead. Given this reality, the United Auto Workers’ goal of getting Americans to buy electric cars produced in high-paying, unionized U.S. factories will be extremely difficult to achieve. A more targeted approach would ideally distinguish between trade in sensitive military technologies and other goods, but this is more complicated than many seem to realize. The convergence of military and civilian technologies was painfully evident in the war between Russia and Ukraine, when cheap drones originally designed to carry packages were repurposed as bombers and private cellular networks played a central role in major battles.

For those of us who believe that multilateral cooperation is necessary to address the world’s most pressing problems – from climate change to regulating artificial intelligence – the escalating rivalry between the world’s two great powers is deeply troubling. From the U.S. perspective, China’s authoritarian government is undermining the fundamental liberal values ​​on which the global economic and political order is based. China’s relentless cyberattacks continue to pose an imminent threat to the U.S. economy and American businesses, and a potential Chinese blockade or invasion of Taiwan would have far-reaching global consequences.

From China’s perspective, the US and its allies are cynically trying to maintain a world order created over centuries of European and American imperialism. Much to the chagrin of US diplomats, many other countries seem to share this view, as evidenced by the widespread disregard of Western sanctions against Russia in developing and emerging economies. Some may hope that China’s economic downturn will curb its geopolitical ambitions. But its ongoing difficulties are as likely to push China into confrontation with the US as they are to encourage cooperation.

The author is a former chief economist at the International Monetary Fund. © Project Syndicate, 2024