Trade war could end if China commits to helping Trump make America’s infrastructure great again

William Mundell says the US should delegate its complaints about China’s flaunting of WTO rules to a multilateral organisation while China could direct some of its Belt and Road Initiative funding towards US infrastructure

Reading Time:3 minutes

US President Donald Trump uses a chart to illustrate the complexity of gaining regulatory approval for construction projects during an event at the Eisenhower Executive Office Building in Washington on April 4, 2017. Photo: AFP

Published: 3:00am, 2 Oct 2018Updated: 6:59am, 2 Oct 2018

Lee Kuan Yew, the founding prime minister of Singapore, often said that competition between the US and China is inevitable, but conflict is not. He may have been underestimating the suspicions and fears underlying great power relations today.

Even if we get past the present stand-off, the prospects for an enduring resolution to the trade war are remote unless a fundamentally different approach is employed.

In Trumpian logic, because the United States runs a US$375 billion trade deficit with China, it has way more to lose than the US in any unravelling and will therefore be the first to “cry uncle”. It is true that the Chinese economy is presently more dependent on trade than the US economy.

But the Trump administration is engaged in bilateral, not multilateral, negotiations with China. In the short term, China can and will source and sell its goods elsewhere, even if that means rapprochement with historical foes.

On July 1, Tokyo played host for the first time to the Regional Comprehensive Economic Partnership, a proposed trade deal that would link China, Japan, India and Southeast Asia. Trade wars create strange bedfellows.