Waiting for a Train Crash

How will the US-China war of words and tariffs play out?

President Trump’s administration is upping the ante with China. Ever since he moved into the White House, Trump has regularly injected bellicosity into the dialogue with China. There have also been several moments of professed bonhomie. That is in piece with the current US administration; it is hard to decipher its moves and even harder to predict the next bend in the road. But of late, the level of anti-China rhetoric has reached new levels, and it appears that this time a point of no return may be imminent. Or is it?

Earlier this week, the US Secretary of State Mike Pompeo told media that the Novel Coronavirus had originated from a laboratory at Wuhan. The implication is damning. It means that Chinese scientists were the deliberate creators of the deadly virus that has brought the world on its knees. It debunks the original story of its origin from a bat or some other animal on sale in a market in Wuhan. It also wiggles a finger at China for its opaqueness in dealing with the world community. Mike Pompeo did not doubt this assertion in the slightest. There is ‘significant evidence’ supporting his allegation, he mentioned. Notably, the president himself had aired the same view a few days ago. It is equally notable that none of the US intelligence agencies has supported this claim.

Sceptics point out that blaming China may be a distraction to cover the domestic bungling in handling the crisis. But, of course, the war of words did not start recently.    

Even before the arrival of COVID-19, Trump had unleashed a tariff war on China. The long-drawn campaign, in which China has given back almost as good as it got, began in January 2018 with hiking of tariffs on solar panels and washing machines. What has followed is a sequence of back and forth of retaliatory steps, interspersed with strange moments when the president would suddenly invoke personal friendship with the Chinese premier. Initially, he even praised China’s handling of the pandemic. Notwithstanding this erratic trajectory, most experts will agree that the overall relationship between the two economic powers is on a slide. Some would even predict a confrontation.

Where is all this heading? As is the case with everything else coming out of the US administration, it is impossible to read the leaves on this issue. But a few points can be made with reasonable certainty.

After the tumult and uncertainty of COVID-19 begin to settle, China will vigorously protect its turf. There are apprehensions in China – well-founded, one may add – that the country’s reputation has taken a severe knock. Indeed, its credibility as a global partner has come under a cloud. China will not allow this perception to persist. The US stratagem to attack China is further complicating matters for the latter, and it will be surprising if China did not contest it at every step. The tariff war may intensify, or the US may begin to renege on its One China policy to rile its opponent, but China will stand up to it. This jousting is likely to cause tensions in the world.

There is talk of the flight of industries from China to elsewhere. The prospect makes it imperative for China to step up its defensive game. It can, however, be anticipated that that the industries will not leave at the pain of increasing manufacturing costs elsewhere and, therefore, the prognosis is not final by any means.

China is also likely to step up its diplomatic offensive, reaching out to the more impoverished nation with help. It will proactively vie for influence around the globe. Signs of this have been all too visible during the present Coronavirus pandemic. As the  Guardian recently reported, China has reached out with donations of ‘coronavirus testing kits to Cambodia, sent planeloads of ventilators, masks and medics to Italy and France, pledged to help the Philippines, Spain and other countries, and deployed medics to Iran and Iraq’. The Chinese president, Xi Jinping, made it clear what the Chinese strategy might be when he said to the head of one of the benefactor countries, “sunshine comes after the storm”.

If the recent US actions are an indicator, the issue will subside after some blowing hot and cold. Isn’t that what happened vis a vis Mexico? Isn’t that how the ‘fire and fury’ with North Korea played out? Isn’t that how the aggression against Iran appears to have stalled? Indeed, hardly any threat has been backed by robust action.

There may be no train wreck waiting to happen. But the world will have to bear a fair amount of anxiety before the narrative plays out. When that happens, the US and not China may have lost even more ground.