China-US trade war: Can Trump win? | The Bottom Line

Summary

In this insightful discussion, Steve Clemens and Keshore Mabubani delve into the evolving global dynamics shaped by the U.S.-China trade war. Mabubani critiques President Trump’s approach to dismantling the post-WWII rules-based order, which has benefited the U.S. for decades. He argues that while the U.S. focuses on trade surpluses, China continues to rise by integrating with the global system. The conversation explores the long-term impact of U.S. policies, with Mabubani emphasizing China's resilience and strategic patience. Ultimately, the discussion highlights the emerging great power struggle and its potential consequences for globalization and international relations.

Takeaways

• 😀 The US-China trade war has sparked significant tension, with both sides imposing tariffs on each other’s imports, disrupting trade and raising the risk of inflation or recession.
• 😀 President Trump's policies are undermining the US-led global order that has benefited America for decades, according to Keshore Mabubani.
• 😀 While the US has benefited from the post-World War II global order, the current administration is dismantling it, putting American interests at risk.
• 😀 Despite the US pulling away from the rules-based order, the rest of the world, representing 95% of the global population, continues to embrace and benefit from it.
• 😀 Trump's push for trade surpluses and manufacturing return to the US is seen as an attempt to replicate China's trade strategy, but this overlooks the success of the US service sector and its surplus in high-tech industries.
• 😀 The US has long benefited from cheap goods from countries like China, and a trade deficit with China does not necessarily harm the American economy.
• 😀 President Trump's focus on bilateral trade deficits misses the bigger picture of global trade dynamics, where the US economy is not suffering despite trade imbalances.
• 😀 The rise of China as a global economic power is reshaping the balance of power, with the European Union shrinking in comparison, signaling the Asian Century ahead.
• 😀 While Trump’s policies create uncertainty, many countries are quietly favoring China due to its stability and predictable economic behavior.
• 😀 The Taiwan issue remains a critical flashpoint, with the US policy of strategic ambiguity at risk of escalating tensions with China over its claims on Taiwan.

Q & A

What is the central theme of the conversation between Steve Clemens and Keshore Mabubani?

The conversation revolves around the ongoing US-China trade war, the disintegration of globalization, and the evolving global power dynamics, with a focus on the impact of US economic policies under President Trump and China's rise as a global power.

How does Keshore Mabubani view the US decision to dismantle the post-World War II global order?

Keshore Mabubani believes that the US is making a mistake by dismantling the global order that it helped create after World War II. He argues that the order has benefited the US for over 130 years, allowing it to maintain global dominance, and undermining it could harm American interests.

Why does Mabubani think the rest of the world is still supportive of the post-1945 rules-based order?

Mabubani suggests that while the US is walking away from the rules-based order, the rest of the world, which constitutes 95% of the global population, continues to embrace and support it, as it provides stability and has served their interests well, particularly in trade and economic development.

What does Steve Clemens mean by 'America kicking down its own hill'?

Steve Clemens uses the phrase 'America kicking down its own hill' to describe how the US, which has long been the dominant global power, is now undermining the very systems and structures that allowed it to maintain that dominance, particularly through policies that weaken the global order.

How does Mabubani explain the discrepancy between the economic prosperity of the US and the struggles of its bottom 50%?

Mabubani attributes the economic struggles of the bottom 50% of Americans to domestic issues, particularly a 'putoaucracy,' where the economic benefits of growth are disproportionately concentrated among the top 1% to 10% of the population, rather than being shared across society.

What is Mabubani's perspective on the US-China trade deficit?

Mabubani believes that the US should not focus solely on the bilateral trade deficit with China, as trade is now global. He argues that the US benefits from cheaper goods and services from around the world, including China, and that trade deficits do not necessarily harm the American economy.

How does Mabubani describe China's long-term approach to global power and trade?

Mabubani explains that China has a long-term strategic vision, focusing on decades rather than short-term political cycles. This long-term approach, along with their commitment to global trade, has enabled China to integrate successfully with the global economy, benefiting from the existing rules-based order.

What does Mabubani say about China's willingness to accept short-term pain in the trade war with the US?

Mabubani notes that China is prepared to endure short-term economic pain in the trade war with the US, as its leadership views this as a long-term struggle. China's time horizon for economic and geopolitical strategies extends over decades, meaning it is willing to endure temporary setbacks for eventual gains.

What does Mabubani think about the future of Taiwan amid US-China tensions?

Mabubani believes that Taiwan is the most dangerous issue that could lead to conflict between the US and China. He stresses that if the US adheres to the One China policy, the status quo can be maintained peacefully. He also emphasizes the importance of avoiding actions that could escalate tensions, such as the US backing Taiwan's independence.

Does Keshore Mabubani think China would want to dismantle the global rules-based order?

No, Mabubani argues that China would not want to dismantle the global rules-based order, as it has greatly benefited from it. Instead, China seeks to continue integrating with the world economy, as it has seen significant economic growth over the past few decades due to its participation in the existing order.