China and the United States would like to part ways. However, the world's two largest economies cannot manage it – too many ties still bind them to each other. Donald Trump aims to free America from its dependence on Chinese products; Xi Jinping wants his country to be as autonomous as possible. The battle over tariffs may be experiencing a lull, but it will continue nonetheless: It is one facet of the China-US confrontation.
The three-month pause in the trade war between the two countries, announced in Geneva, on May 12, offers a reprieve. Washington has lowered the outrageous tariff barrier Trump imposed on Chinese exports to the US by 115 points – from 145% to 30%. In response, Beijing had retaliated with a 125% protective tariff at Chinese borders, which has now been reduced to 10%. However, the war is not over.
Trump has, not without reason, highlighted China's role in some of the American economy's weaknesses: deindustrialization (and its attendant social devastation), trade deficit, a multifaceted addiction to "made in China" products (and their unbeatable prices) including in areas that affect national security. The American accusation denounces Chinese practices, such as predatory trade tactics, competition skewed by subsidies and other monetary manipulations, and the lack of social and environmental standards.
China has thereby constructed the world's leading industrial base and prioritizes its development on the limitless expansion of its exports. On May 12, The New York Times cited the objective Xi set for Chinese economic leaders, in April 2020: to promote other countries' dependence on China in international value chains (which guarantee the production of many products).
Guilty mix
While Trump has rightly criticized the global trade imbalances inherited from the past 40 years of free trade, he is wrong about China's exclusive responsibility. He nostalgically longs for the "good old days" (the 1950s) and fantasizes about reducing the trade deficit and reindustrializing the US through tariffs. His denunciation of free trade flirts with a kind of paranoia: the country's woes are the fault of foreigners – especially China. That is not what happened.
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