Does it take a trade war to settle disputes and disagreements between China and the US?

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An American flag next to the Chinese national emblem during a welcome ceremony for visiting U.S. President Donald Trump outside the Great Hall of the People in Beijing on November 9, 2017.Photo: AP

Peter Guy

Peter Guy is a financial writer and former international banker

Published: 5:20pm, 14 Jan 2018Updated: 12:58pm, 23 Mar 2018

Give a trade war a chance, I say, paraphrasing John Lennon.

We are hurtling towards one, especially if you consider the grievances of some American technology companies concerning the lack of a fair playing field, and the accusation that intellectual property theft is prevalent in China. Look at the backdrop that Donald Trump is building, and it couldn’t come sooner because China and the US need to settle their grievances.

The Obama administration allowed China to roll forward on trade. It may have advanced China, but it has also created resentment among some circles in Washington that will lead to a backlash - especially under a new president with a tendency to take unilateral actions. The hazardous outcome is that the Chinese government may be unable to deliver on America’s demands on trade, however unreasonable they may be.

I predicted in my April 2017 column that the US government would probably reject Ant Financial‘s acquisition of MoneyGram because of national security concerns. Even then, my Washington sources told me that the scorn against the lack of quid pro quo for American tech companies in China had passed the point of no return.