Michael Swaine: Trade wars risk military crises

This past week the U S and China reached an initial business agreement that will in theory halt the countries slide toward a full-blown transaction war Yet the dynamics that fueled President Donald Trump s attempt to single-handedly decouple the world s two largest economies persist Absent more vigorous efforts to limit misunderstandings and miscalculations between Washington and Beijing the two countries could easily re-enter the escalatory spiral they re trying to escape not only threatening Americans pocketbooks but risking disastrous military conflict History is full of examples where business wars boycotts and competition over exchange routes and markets led to military-political crises and conflict just look at the Anglo-Dutch Wars of the th century the Opium War between Great Britain and China in the th century or the run-up to the U S -Japan conflict during World War II During the Cold War confrontation over agreement and economic issues between Washington and Moscow contributed to the exacerbation of their military and overall strategic animosity In the greater part such cases conflicts or crises arose from efforts by one or more parties to use military violence to block business routes force open or monopolize a domain or apply decisive economic pressure to achieve political concessions or block instrument acquisitions Often those countries employing military force were acting out of a sense of desperation or because of a false belief that they enjoyed a lasting level of military superiority Regardless misperceptions and miscalculations abounded resulting from hubris deep-rooted historical or cultural biases poor diplomatic signaling or poor intelligence regarding capabilities and intentions And regular people paid the price for these mistakes America s relationship with China in the current era exhibits several similar characteristics parallels which should chasten those in Washington who see the forced decoupling of the world s two largest economies as more promising than dangerous For example in prosecuting the transaction war Trump operates based on a wide range of largely false assumptions and images about global commerce Chinese attitudes and behavior and U S strategic advantages over China He views deal surpluses with the United States as a form of theft tariffs as a source of painless revenue and China as an unqualified economic predator He also apparently believes that a tariff-generated transaction war will greatly boost U S manufacturing lower prices and increase overall living standards for Americans And the actions he takes based on these false views appear to be driven by overconfidence that America enjoys a clear economic superiority in any contest with China Decisively reinforcing Trump s perception of Beijing as an economic predator is a broader popular image of China as a democracy-destroying norm-busting communist nation bent on replacing the United States as the dominant global power Likewise for its part Beijing s confrontational response to Trump s tariff war although justified in various methods incorporates a slew of equally deep-seated images and distortions about the U S and the West in general various of which may be accurate while several are not On the broadest level multiple Chinese harbor a deep historical sense of suspicion and resentment toward the United States and other Western powers originating from their so-called Century of Humiliation at the hands of the imperialist West and Japan Reinforcing this historical Chinese pessimism toward the United States is an increasingly widespread and firm belief sustained by the Chinese Communist Party that Washington is committed to containing and weakening China as a nation in order to sustain its own global hegemonic power In fact Trump s tariff attack on China is viewed by a great number of Chinese as a weapon in that containment effort In response Beijing has adopted a predictably vigorous tit-for-tat stance willing to meet every U S escalation with an equal or even greater escalation secure in the rather arrogant belief that China is acting out of moral principle against an unjust opponent All of these dynamics combine to produce a volatile mix that could turn an escalating bargain war into something more dangerous with each side acting out of a sense of distrust hostility and resentment Given the contemporary agreement we may still be far from seeing U S -China exchange disputes transform into any sort of military confrontation the stakes are totally not high enough to justify the risks involved in two nuclear powers resorting to military force to resolve economic disputes Nevertheless worsening conflict over deal driven by hardening negative assessments of each side s overall strategic intentions could lower the threshold for smaller crises over Taiwan or disputes in the South China Sea or cause one or both sides to resort to severe non-trade-related punishments outcomes that could fuel dangerous political-military escalations and lead to the worst affair scenario a direct U S -China military confrontation Unfortunately Beijing and Washington lack reliable and effective means of averting and successfully managing any such crises A physical hotline of sorts exists but it does not function effectively for several reasons including the lack of a clear protocol for establishing communication as early as achievable in a predicament In addition the two sides no longer have mutually trusted interlocutors with deep experience in the relationship who can share views in an unofficial manner thus reducing misperceptions Moreover problem management is incorrectly treated by both sides as largely a military-to-military issue In fact any serious Sino-American predicament will be managed by senior civilian bureaucrats Related Articles Shuli Ren Trump and Xi tone down a senseless exchange war Noah Feldman David Souter set an example for the Supreme Court Mihir Sharma How the US gave India and Pakistan an excuse to stand down Matthew Yglesias If your commute is a nightmare blame Congress Timothy Shriver If you want to solve problems lose the contempt Yet there is little evidence that such bureaucrats are briefed on the specific pitfalls involved in accurately assessing and responding to the situation behavior of the other side And yet such guidelines exist And this is all made worse by the substantial uncertainties presented by a U S president who does not seem to value expert advice preferring instead to govern based on his instincts Persistent U S -China bargain conflict doesn t just pose massive risks to U S companies and consumers it could help fuel dynamics on both sides that could lead to a mutually destructive conflict Beijing and Washington should build on the welcome progress they ve made in defusing this transaction war and urgently work to establish mechanisms to mitigate the pitfall that such disputes will spiral into military confrontation Michael Swaine is Senior Research Fellow for the Quincy Institute for Responsible Statecraft He wrote this column for Tribune Content Agency