Trade Will Be Key Component of New China Containment Strategy

China doesn't like Donald Trump.
Trump opens Pandora’s box in US
The rise of a racist in the US political arena worries the whole world. Usually, the tempo of the evolution of US politics can be predicted, while Trump's ascent indicates all possibilities and unpredictability. He has even been called another Benito Mussolini or Adolf Hitler by some Western media.

Mussolini and Hitler came to power through elections, a heavy lesson for Western democracy. Now, most analysts believe the US election system will stop Trump from being president eventually. The process will be scary but not dangerous.

Even if Trump is simply a false alarm, the impact has already left a dent. The US faces the prospect of an institutional failure, which might be triggered by a growing mass of real-life problems.

The US had better watch itself for not being a source of destructive forces against world peace, more than pointing fingers at other countries for their so-called nationalism and tyranny.
China doesn't care about anything in this NYTimes editorial board ghostwritten piece. What it is concerned about is what is not mentioned at all: trade policy.

China is in a similar position as the USA in 1929, but worse. China has a larger credit bubble, with more overcapacity and a far greater reliance on trade. More importantly, countries have a security interest in thwarting China's economic rise.

If a President Trump were to renegotiate trade deals, the logic of using trade against China becomes inevitable. As laid out in The Rise of China vs. the Logic of Strategy and as I discussed in The Logic of Strategy: Yuan Devaluation and the Road to Trade War, the idea of limiting China's rise with trade policy already exists. The main actor doesn't even have to be the United States, but Vietnam, Philippines and other nations battling China over the South China Sea among other disputes. These nations cannot use trade policy today without defecting from the global trade system and facing punishment, but if the U.S. defects even a small amount and solely as an economic strategy, the door is opened for other nations to defect as well and make trade policy a component of national security.

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