The US-China trade war will rebuild the world

President of the United States, Donald TrumpHe has long claimed that the purpose of his political commercial simply consists of get better deals for Americans. But as we the trade war intensifiesIt seems increasingly likely that their policies will lead to something else: a lasting break with China and a new alignment of global power.

First, consider the evidence of the breakup. The current stalemate in trade negotiations was triggered by a sudden change in terms by Chinese negotiators. It is likely that this change has surprised the government, but Trump's response is noteworthy: he immediately raised the rates and then announced the ban to negotiate with the Chinese telecommunications company and the national leader Huawei Technologies.

These measures put Chinese President Xi Jinping on the sword and turned the trade dispute into a matter of Chinese national pride. This limits the possibility not only of a quick resolution, but also of the likelihood that the Chinese people will accept some sort of concession in the United States.

The management of this situation by Trump contrasts with your trading strategy on other issues. Although the President criticized the North American Free Trade Agreement during his campaign, he described his successor as success, even if he is not cosmetically different, and he is willing to suspend his tariffs in Canada. and Mexico. to facilitate your pbadage to the Congress. Similarly, Trump has been more than willing to successfully conclude its negotiations with North Korean leader Kim Jong Un, although evidence of such success is rare. Meanwhile, the President's bitter talks with Europe and Japan over his business practices and against NATO allies for defense spending have been frustrating for the most part.

US-China Trade War: Market Impacts and Concerns Argentina

However, when it comes to China, Trump redoubles the bet. He encouraged US supply chains to leave China and put in place subsidy programs to protect farmers from the effects of a protracted trade war.

This leads to the long-term implications of this battle. A prolonged trade war would almost guarantee a global realignment. Supply chains across the United States and China would be constantly interrupted, so global manufacturers should decide to follow a US-centric strategy. or in China.

This is already the case in the digital sphere, where the Chinese restrictions on the Internet divide the world into two parts: one that serves the technological giants of the United States, such as Google and Facebook, and one that depends on the Internet. Chinese companies such as Baidu. and WeChat. China threatens to disrupt US access Rare earth minerals also point to a possible bifurcation in commodity markets.

The trend is clear: as she grows up the economic and geopolitical power of Chinacountries in the Asian giant's sphere of influence will feel more and more urged to integrate their economies into Chinese supply chains and multinationals instead of US companies.

Commercial war games between the United States and China

At the same time, as my colleague from Bloomberg Opinion, Tyler Cowen, points out, the rise of China is the main driver of populist sentiment in the United States. and in Australia. This generates political pressure in these countries to reinforce isolation with China. In the United States, Trump made it clear that he saw the trade war with China as a political advantage, and he is probably right. It is also likely that this anti-Chinese sentiment will last.

Add all these factors and the American trade war. and China seems to be the beginning of a deep break in the global order. As China and the US form two opposing economic and geopolitical coalitions, the rest of the world will have to choose. The European Union could perhaps constitute a third non-aligned pole, since the accession of France and Germany to the European Union (and the absence of the United Kingdom) gives them the power to negotiate to avoid to fall under the sign of Chinese or American influence.

China pays a large part of the US trade war

Of course, in a way, this kind of multipolar alignment would be a return to the past. The world of the two superpowers that has existed for most of the second half of the twentieth century has always been an exception and the era of American supremacy that began after the fall of the Soviet Union will not last forever. Until recently, however, a new type of bipolar arrangement seemed possible: a kind of competitive partnership between China and the United States, with the EU playing a supporting role. The events of recent weeks seemed less and less likely.