Tariffs are just the first shot in the looming US-China war

As a friend of mine who works in higher maths put it: “John, if America as an integer is present in every major foreign policy equation, and if after 75 years that integer radically changes, then everything changes”.

Donald Trump’s America is that rarest of beasts: the strongest global power distrustful of the very global order that it itself created.

This radical break with the immediate past is nowhere more apparent than in the President’s upending of the international trading order.

Much as was the case over the US-Mexico-Canada Free Trade Deal (USMCA), a recently negotiated update of the North-American Free Trade Agreement, the President seems to be using brinksmanship to get the even more important Sino-American trade deal over the line.

In the case of USMCA, the White House managed to diplomatically corner a recalcitrant Canada, threatening to do a deal with a pliant Mexico alone. Unsurprisingly, Ottawa quickly capitulated.

Trump has gone back to such brinkmanship in the homestretch of talks with Beijing. After months of favourable noises, the White House abruptly switched tack a week ago, with the President thundering that the talks were proceeding too slowly.

As threatened, he raised tariffs on $200bn worth of Chinese imports to the US from 10 per cent to 25 per cent last Friday.

Why the drastic change in mood music? Those privy to the trade talks say that they are stuck over two basic procedural points.

First, the Chinese negotiating team insists that any trade concessions will need to be achieved only through regulatory and administrative actions, not by changes to Chinese law. Americans fear that these concessions can easily be undone.

Second, the Chinese negotiators insist that the Trump administration fully lift all tariffs on Chinese goods immediately, which is far more quickly than the White House is comfortable with.

In both cases, the inconvenient truth is that the American team – badly burned over several decades of negotiations with Beijing – simply does not trust the Chinese to live up to any bargain.

Enshrining the changes in law and leaving at least some of the tariffs temporarily imposed on Beijing are both ways to maintain enough leverage to ensure that the Chinese, this time, follow through on their promises.

Politically, this game of diplomatic hardball works either way for the Trump White House.

Either the tough talk facilitates a deal – with the President able to gloat about his negotiating prowess to his base – or it fails, with his longstanding warnings about China being borne out by such a lack of success.

In the latter case, “standing tall” in the face of China is politically a no-brainer, as both Republicans and Democrats embrace a highly pessimistic view of Beijing’s rise.

In fact, the increasingly gloomy attitude to China from both parties amounts to the single biggest sea change in foreign policy establishment thinking since my glory days in Washington 13 years ago. Then, both the Clinton and George W. Bush administrations largely bought into the sunny hypothesis of Barrington Moore.

An influential twentieth-century Harvard professor of sociology, Moore posited that as states became more prosperous, a middle class inevitably springs up.

Over time, this emerging middle class would make the developing country they lived in more pluralist, less dictatorial, and often would lead to the country in question becoming a democracy itself.

This was the fate that both Democrats and Republicans assumed would happily befall a miraculously-growing China. As such, America would have a new partner helping to manage the world – one that would be increasingly pro-US and pluralistic, perhaps even eventually democratic. As a result, everyone was pro-China.

Now, 13 years on, the skies have grown exceedingly darker in Washington. China is seen instead as an increasingly powerful authoritarian rival to US power, a Singapore on steroids, and not a benign helpmate for a gently declining US.

Ironically, it was no less an anti-Trump figure than Democratic Senate minority leader Chuck Schumer who last week urged the President to “stay tough on China”.

This portends that, while in the short run the trade war between the US and China will probably be worked out, it is the looming Cold War between the two greatest powers in the world that deserves our increased attention.

Risk on for the world, indeed.