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For the U.S. and China, the Economic Fight of the Century Begins

undefined and Senior Global Analyst at RANE
Matthew Bey
Senior Global Analyst at RANE, Stratfor

May 10, 2018 | 08:00 GMT

A photograph shows the Yangshan Deep-Water Port in Shanghai, China, during April 2018.

The Yangshan Deep-Water Port in Shanghai, China, has an automated cargo wharf China warned that trade talks with the United States were "impossible" under the current conditions after President Donald Trump reassured markets during April 2018 by suggesting that the dispute could be resolved.

(JOHANNES EISELE/AFP/Getty Images)

Highlights

  • The United States and China have been on the path toward a trade war since China's economic miracle brought the country back to global prominence 40 years ago.
  • China will try to defuse the tension with the United States, but it won't concede on its core economic policies, including those supporting its tech sector.
  • Even if the two sides can reach a deal on issues such as boosting U.S. imports to China, the underlying competition between them will persist far beyond the current presidential administration in Washington.

The economic fight of the century has now begun. After more than a month of lobbing threats of tariffs and investment restrictions back and forth -- and over a year of preparation by U.S. President Donald Trump -- China and the United States finally have kicked off negotiations on contentious economic issues. The underlying competition between the world's two largest economies has been building for quite some time. While Washington and Beijing may find some common ground, both view the rhubarb as a potentially barbaric fight for economic supremacy in the 21st century. It won't be a battle either side will take lightly, and it won't be without its economic and political casualties....

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