Return of Sovereignty: U.S. and China Seek Breakup

NYTimes: On Trade, the U.S. and China Consider the Unthinkable: Breaking Up
As a top Chinese economic policymaker meets with the Trump administration this week in hopes of heading off a potential trade war, some officials in both countries are planning for a time when the world’s two biggest economies do not need each other quite so much any more. They are seeking nothing less than a fundamental rethinking of a trade relationship that encompasses more than $700 billion in goods and services that flow between the countries every year.

Full disengagement is impossible, leaders on both sides acknowledge. But the plans being developed in Beijing and Washington anticipate a time when the economic engines of China and the United States are not so closely linked, particularly in high-tech industries.
The U.S. strategy is to shift trade relationships:
United States trade officials are counting on tariffs to have long-lasting effects. Decades-old levies on imported pickup trucks, for example, help explain why essentially all pickups sold in the United States — even those made by Japanese companies like Toyota — are made in America.
China needs domestic technology for its military, national security and jobs:
In China, leaders were alarmed five years ago by the former National Security Agency contractor Edward Snowden’s disclosures that American intelligence services had involved technology companies in the United States in its spying on China and its allies. China also faces rising labor costs — meaning cheap manufacturing will no longer provide as many jobs — and has a rising class of educated young people for whom it needs to find well-paying, high-tech jobs. While many American and European companies see Made in China 2025 as building up government-supported rivals, Chinese leaders see the plan as essential to the country’s future prosperity.
This bit from Levi's explains why domestic economic reform that makes the U.S. more attractive is an important part of trade policy:
Levi’s has a plan for protecting itself should tensions escalate further. If the Trump administration imposes a levy on clothes made in China, the company could sell American consumers jeans made in Vietnam, Cambodia or one of the three dozen or so other countries where it has suppliers.

“It’s a shell game,” said Chip Bergh, the chief executive of Levi’s. He added, “We’ll probably still be making a lot of product in China but it just won’t be coming to the U.S.” He noted that jeans made in China could be sold to consumers in Mexico instead.
The trade battle between China and the U.S. shows signs of the same pattern at work in the EU, in NATO, in #CalExit. Identity and community, nationalism and sovereignty are top issues during times of declining social mood. Thus far the U.S. and China are handling it much better than the Germans.

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