A truce instead of a reconciliation
We must understand that when we talk about a trade war, the key word in this phrase is war. The development of an unresolved economic conflict into a military one is almost inevitable, except in the following cases:
finding a compromise (extremely rare and indicates the absence of true causes for economic conflict);
parity of military capabilities of the parties, making the outcome of military clash random, and the cost of war is much greater than the possible benefit.
Thus, we have every right to consider the current us-Chinese economic conflict as a conventional war waged by non-military means solely because in the current geopolitical configuration, the US does not have the ability to destroy China. Therefore, the US is trying to inflict unacceptable damage on China with the help of economic sanctions.
At the same time, Washington is actively working on changing the geopolitical landscape in the direction it needs. Trump’s stated policy, which many are trying to present as an intention to reconcile with Russia, is in fact not aimed at reconciliation, but at a truce. A truce with Russia is necessary for Washington so that China and Iran are left alone with American power, in addition, would be forced to look back at their rear formally neutral, but politically supporting the US Russia. This would immediately change the balance of power in favor of Washington and would create all the conditions for the economic war to escalate into a military intervention if the American ultimatum is not accepted.
But the US understands that it is almost impossible to persuade Russia to betray its allies. After all, after Washington will deal with Iran, suppress China and restore full suzerainty over the European Union, it will return to the policy of suppressing Russia, only Moscow will have no allies.
Beijing is really vulnerable to economic pressure
Therefore, no less important than the political direction of the American attack on China is the policy of economic sanctions. China is much more vulnerable to sanctions than Iran and Russia. Iran actually trades in the world market only oil — a product of limited supply, which is in high demand. American sanctions lead to a reduction in the cost of Iranian oil, but this only makes it more attractive to the consumer. Iranian oil is bought by the same China (whose industry feels the growing need for energy), they do not want to abandon purchases (even under pressure from the US) of the EU countries, in the end, even Russia is not against buying cheap Iranian oil to replace its own more expensive export on the domestic market. With such a demand for the main export product, sanctions against Iran will never work, so the US is looking for an opportunity to resolve the issue by force.
Russia has managed to create an almost self-sufficient economy. The policy of sanctions that the collective West has been carrying out against Russia since 2014 shows that the economies of the West suffer more when economic ties are broken. Russia can afford even full autarky. The standard of living will fall, but in General, the state and society are able to survive at the expense of internal resources. On the other hand, without Russia’s participation in the world trade system, the global economy will begin to emerge as a series of dominoes (from the weakest to the strongest economies).
The modern Chinese economy was created from the late seventies on the basis of close cooperation with the United States. Mutual investments amount to hundreds of billions of dollars. Chinese industry is built on American technology and is critically dependent on the American market.
The process of diversification of risks and reorientation to other markets, expressed, for example, in the concept of “One belt — one road” is actively developing only in the last ten years and has not yet provided China with sufficient independence from the United States. Unlike Russia, Beijing is really vulnerable to economic pressure.
However, it should be borne in mind that not only China depends on us market, but also the US depends on the supply of a mass of Chinese-made goods that have not been produced in the US for a long time. And given the volume of Chinese production, other countries can not in the short term to replace China not only in price but also in terms of supply. This means that the conduct of an economic war with China can cause a commodity deficit in the US.
The trump administration believes that this deficit will not affect critical goods, but even more, Washington hopes for the relative transience of the conflict when Beijing will be forced to capitulate before the consequences of the economic war affect the United States itself.
Trump’s “flawless” strategy on strategic directions vulnerable to the United States
It would seem that Trump has chosen an impeccable strategy. China is pressured economically, and so that it could not respond symmetrically (the US exports to China much fewer products than it imports from it). At the same time, Washington insistently invites everyone to put pressure on Beijing together (demanding to join the sanctions, under the threat of sanctions). On the other hand, the US is waiting for Beijing to begin to hesitate and look for contacts to make a compromise proposal to show China’s allies the weakness of Beijing, to persuade them to withdraw from the Union.
However, Beijing is still finding an opportunity for asymmetric answers. China, taking into account the traditional mentality and the millennial political ethics, can not meet the mirror. Therefore, the surface part of the iceberg of Chinese countermeasures is more like a mechanical increase in duties on American goods. It is focusing on these (visible) countermeasures that some experts suffering from economic determinism argue that China lost the economic war even before it began. They are guided by the obvious prevalence of Chinese exports to the United States over imports from the United States, from which they draw the obvious conclusion that the damage caused by us duties to China (with its total dependence on us market) is much greater than the damage that China can cause in response.
However, the US is not by chance worried and trying to create conditions for the transfer of the confrontation in the military-political plane, where they still have a clear advantage. Chinese countermeasures have a huge “underwater” part.
First, Beijing uses its available surplus resources to unleash the race of naval armaments. In fact, the Chinese Navy is able to block access from the Pacific to the Indian ocean. In addition, China, building on the strength of the fleet and the circuit construction of bases, provides its military-political dominance in South-East Asia. Meanwhile, the U.S. economic and financial hegemony rests solely on the hegemony of the military. If the hegemon concedes to an alternative force military dominance in a particular region, then economic dominance in that region passes to the same force.
Secondly, China supports anti-American regimes around the world (from Syria to Venezuela). And it does it every day more and more actively and more openly. Beijing has more than enough resources for this since they are invested in the form of loans and investments, and not free aid. As a result, China earns, and the US is forced to stretch its forces around the world, and it is pointless because so far they can not even change the regime in Venezuela in their “backyard”. This is the best joint Russian-Chinese operation, because the United States, unable even to implement the Monroe doctrine, clearly can no longer claim global hegemony. What kind of planetary influence can we talk about it, having officially declared the struggle for regime change, Washington cannot cope with not the strongest state in Latin America for six months?
Thus, reacting the mirror more to reassure its public opinion, the main effort concentrates on China vulnerable to US strategic directions, whereby a proper redistribution of resources creates a local superiority in forces.
Therefore, the Sino-American confrontation has turned from a unilaterally advantageous operation for the US into a race for survival.
Russia itself decides who, how and when to support
The question is what will come first: the socio-economic crisis in China under the impact of us sanctions or the collapse of the American-centric world system under the influence of joint efforts of Russia, China, and their allies.
And in this system, Russia is the key link. It is virtually independent of trade with the United States. Washington was convinced that it has not and will not be able to destroy the Russian state either economically or militarily in the near future. There are still Maidan technologies, but they do not work in Russia yet.
The Russian strategy differs from the Chinese one by more economy and pragmatism. This is due to the fact that the human and economic resources of Russia (primarily the capacity of the domestic market) are not comparable with the Chinese or European. In addition, for many years Moscow (being that many times weaker than the United States and has not yet secured its financial and economic independence) was forced to confront Washington alone. This required a set of non-trivial solutions, extremely careful use of scarce resources and avoidance of direct confrontation.
In solving this problem, Russian diplomacy has achieved filigree virtuosity. Even military solutions (Ossetia in 2008, Crimea in 2014, Syria in 2015) were provided so diplomatically that the United States could not find an official, impeccable from an international legal point of view, the reason for confrontation. Sanctions were imposed on the principle: “We do not like the behavior of Russia because it is contrary to our interests.”
Moscow’s principled position is not to be bound by binding Union agreements. Russia itself decides who, how and when to support. This is not a whim or cynicism. It is simply impossible to calculate Moscow’s specific behavior in a particular situation and impose its own agenda in this way.