Why America and China Are On a Collision Course

The Trump administration took a trade shot at China with its decision Monday to impose tariffs on imports of solar panels and washing machines. The move reflects two different views of the world that have placed the two countries on a collision course, suggests Andrew Browne in The Wall Street Journal. It wasn’t meant to be this way, but it’s probably going to get worse.

Many in the West used to believe that as China grew, “its commercial standards and political values would gradually converge with their own. Wasn’t that the unspoken deal when China joined the World Trade Organization in 2001?” Browne writes. “If it was, the bargain is dead.”

“The state made an about-face; government enterprises are marching again to the drumbeat of industrial policy. Private enterprise is on the defensive. Foreign investors are treated with growing intolerance.”

“The transformation has gathered pace under President Xi Jinping. From the vantage point of the Chinese leadership in Beijing, US capitalism and democracy are digging their own graves, while Donald Trump is trashing America’s global reputation.”

“Mr. Xi sees a historic opportunity to ditch the U.S. template and advance the Chinese development model as a credible alternative. His signature Belt and Road initiative to join East Asia and Europe with transport and energy infrastructure is a sign of confidence that China has the ability to reshape the global trade and investment environment.”

Tit for tat? The Trump administration is set to learn an important lesson about China following its announcement on tariffs, Bloomberg reports: “Beijing can punch back.”
“China’s economic might gives President Xi Jinping’s government the leverage it needs to strike back decisively, including scaling back purchases of American products and subjecting well-known US companies with large Chinese operations to tax or antitrust probes.”

Meanwhile, in Tokyo…A year to the day after President Trump signed an executive action pulling the US out of the 12-nation Trans-Pacific Partnership, the 11 remaining countries announced they have reached an agreement, to be signed in March.
Per CNN: “The new deal is supposed to cut barriers on trade in goods and services between the 11 markets, which make up about 15% of the global economy. It also includes rules on environmental and labor standards.”

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