Superpower Trade War Of Attrition

Share prices plunged and despair enveloped American trade and industries after China stayed put, to the United States’ President Donald Trump announced a steep hike on imports of Chinese goods. The American president boasted that many countries would come begging for negotiations.

Trump’s obvious arrogance and misplaced sense of over-confidence proved not just embarrassing but humiliatingly painful when Beijing sanctioned the export of vital items and import of agricultural and other products that hurt Americans with almost immediate effect. The act-first-think-later act put Trump in the dock, as it began to dawn on him the backlash his administration faced and the likely anger the public might air.

China’s President Xi Jinping and his team had had enough of superpower threats that climaxed with the prohibitive tariff war, up to 500 per cent. Trump received his first taste of an angry Xi, who refused to budge from his stance and his spokesperson announced that Beijing would not join negotiations until Washington reverted to the 2019 tariff status for imports from China.

The existing challenge of exercising austerity is a jargon reserved for very poor countries in Asia and Africa by the capitalist world, where gluttonous consumerism is seen as a Midas touch for prosperity that keeps trade and industry going, with “trickle-down effects” on low-income segments. Little is discussed on the staggering economic disparity in most advanced economies, where the top one per cent in the rich bracket accounts for wealth more than the bottom one-third of the population possesses.

Sabre-rattling

Beijing girds its loins to absorb the pain a trade war inflicts. The development is yet another solid brick in an emerging new world order. As the No. 2 superpower, China is matched well with the economic and military might the US flaunted during the entire 1990s, supported by the European Union and NATO.  In April, Trump’s prematurely confident claim that China would come crawling for an understanding simply did not come. Instead, the US president blinked first and beseeched Beijing to lift the White House’s phone call for healing the damage. China’s calculated course is to accept some temporary pains initially but not without inflicting a deep hurt on the capitalist opponent immediately or in the not-so-long term. The rest of the world watches who is wilting and who is winning in the superpower confrontation.

American media and scientists might take several more years to acknowledge that their arch rival has emerged as the leader in many aspects of advanced technology, just as it took them years before grudgingly admitting that the communist country attained the No. 2 economic status. Long-term approach is Beijing’s policy. But preparations are such that more often than not, it responds to urgent situations fittingly. Complacency, fuelled by the monopoly in the 1990s, made Washington believe in its military might and economic prowess as unrivalled for too long and too much. The downturn was bound to happen. 

Trump seethes with anger when others retaliate to his unilateral steps. China, too, does not like others to put it under constant pressure. Tariff war will see the dollar’s decline. The ordeal of uncertainty over a delayed deal fanned mutual suspicion. Washington fears China will inevitably take the world No. 1 economic spot within the next few years for a technological edge over the US in many respects, whether Washington acknowledges it formally or not. Beijing first lays out the groundwork and strikes hard, inflicting maximum hurt on the target but with very few repercussions for itself. 

Critics lampoon Trump’s Make America Great Again slogan as sowing the seeds for Make Asia Great Again. More countries are viewing the Sino-Russian build-up as a lesser threat than the US-led dominance. China has been engaged in hardly any major war for decades, whereas the US record is filled with major conflagrations all over the world, without computing proxy wars and instigation of military coups against regimes not complying with Washington’s agendas. China is seen as more self-sufficient than others on numerous fronts. Its pain-absorbing capacity and manufacturing prowess outlast that of the US, which stands as a strategic advantage over the declining but still No. 1 superpower.

Intense rivalry

The US Vice President JD Vance made a disparaging comment that the US borrows money from “Chinese peasants to buy the things that the Chinese peasants manufacture”. Chinese Foreign Ministry spokesperson Lin Jian said: “It’s both astonishing and lamentable to hear this vice president make such ignorant and disrespectful remarks.” 

In early May 2, after months of tough negotiations, the US and war-afflicted Ukraine signed a deal that gave Washington access to critical mineral resources. Of note is that a record number of African states participated in the China-Africa summit. The summiteers did not complain about the debt trap that the Western media so often raised, even with less and less conviction. 

The counter question remains: Are developing nations so stupid as to continue with China’s Belt and Road Initiative? Why doesn’t the West come up with an attractive alternative for seizing the initiative and earning convincing political mileage?  Northwest China’s Xinjiang Uyghur Autonomous Region saw a yearly rise of 30.9 per cent in foreign trade in the first eight months of 2024 at $40 billion. Its trade with BRI partners rose by 28 per cent yearly. And to note that the West cried hoarse for long about gross human rights violations against the Uyghur community.

The US decline was already being felt all around. Trump’s tariff war has accelerated the pace. Even South Korea and Japan, long-term allies where the US stations troops at various bases for 80 years, paid for by Seoul and Tokyo, have been making plans for tapping alternative markets for a fallback position if things were to worsen. Washington has issued a deadline to agree to a new trade accord or face a 25 per cent tariff hike. In its recent edition, the Economist magazine concluded: “Trumponomics is chipping away at the foundations of America’s prosperity.” Abrupt measures cause memories to run long and deep. Lesser powers waking up to the prospects is a threat to legacy powers in a new world order that has set off loud and clear.

(Professor Kharel specialises in political communication.)