Amid charges and counter-charges, the US-China conflict has now moved squarely into the danger zone.
And in light of the sharp recent escalation of pressures from the American side — the early May hike in tariffs from 10% to 25% on $200 billion of Chinese exports to the US along with a promise of more to come on the remaining $325 billion of exports, together with a full frontal assault in Huawei — even the odds of a cosmetic agreement are slipping by the day.
After years of abusive trade practices, goes the shared bipartisan rhetoric, it is high time America stood up against China.
Back then, the US manufacturing sector was experiencing its first taste of pressures on jobs and real wages that could be traced to a sharply widening trade deficit. A mercantilist Japan, fixated on suppressing the value of the yen and accounting for about 42% of the total US merchandise trade deficit in the first half of the 1980s, was the culprit.
This led to the so-called Plaza Accord of 1985, when the so-called G-5 coalition of leading industrial nations put Japan in a straight-jacket of currency appreciation that led to asset bubbles and a string of lost decades of economic stagnation and deflation.
從打壓日本到打壓中國，美國總是將自己視為受害者，把自己造成的經濟問題歸咎于他人（blame others for economic problems that are very much of its own making）。
When nations are short of saving and want to invest and grow, they must borrow surplus saving from abroad and run current account deficits in order to attract the foreign capital.
These balance-of-payments deficits — which the US has experienced in every year since 1982 (with the exception of 1991, when the US ran a small surplus by charging other nations for its military campaign to wage the Gulf War) — are a recipe for trade deficits.
But since the trade deficits stem from macro saving-investment imbalances, they tend to be broad based, or multi-lateral, in scope. Indeed, in 2018, the United States had merchandise trade deficits with 102 countries.
Yes, China accounted for fully 48% of America’s massive $879 billion merchandise trade deficit in 2018. That makes it a lightning rod in the current US policy debate. Eliminating the Chinese piece of the deficit, goes the argument, is the only way to “make America great again” and thereby alleviate pressures on American workers.
If it were only that easy. For a saving-short US economy, there is no bilateral fix for a multilateral problem.
A China-centric solution is like “whack-a-mole.”
Eliminating one piece of the trade deficit without fixing the saving problem — a very real possibility in light of a further depression of domestic saving following from the ill-timed Trump tax cuts of late 2017 — simply means that trade will be diverted from China to other foreign producers.
Inasmuch as China is one of America's lowest cost foreign suppliers, that means the trade diversion will invariably go to higher cost foreign producers — the functional equivalent of a tax hike on American consumers.
The answer is as much an outgrowth of hegemonic overreach as it is a reflection China's alleged unfair trading practices.
With the dollar pre-eminent as the world's reserve currency, the United States has developed a sense of entitlement toward open-ended budget deficits that are funded by dollar-denominated debt issuance in its own currency.
Never mind the inefficiencies of a healthcare system that eats up 18% of GDP, or a defense budget that is essentially equal to the combined military outlays of the next seven largest defense budgets around the world.
Washington would rather pursue fiscal recklessness than come clean with the American public. And it would rather blame the consequences of such a strategy on the trading practices of others than take a long hard look in the mirror.
China has been charged with a number of so-called Section 301 violations of the US Trade Act of 1974 and vilified, accordingly, in the arena of US public opinion.
Yet the evidence behind such allegations is flimsy at best and outright misleading at worst.
Apparently, it is much easier to find comfort in the false narrative than to accept responsibility for fiscal excesses and saving shortfalls that spawn the macroeconomic imbalances that give rise to multilateral trade deficits.
This is pure political theater at its worst — underscoring the folly of a bilateral fix for a multilateral problem. As noted above, the bilateral fix is a recipe for trade diversion that does next to nothing in providing lasting relief for American workers and consumers.
最重要的是，單純解決雙邊貿易逆差并沒有觸及到長久威脅兩國局勢的結構性問題（the fixation on the bilateral trade deficit fails to address the structural issues that threaten lasting tensions between the two nations）。
Market access is at the top of that list — the opportunity of multinational corporations in both nations to invest freely in each other's markets. The US claims that China's joint venture requirements imposed on such investments is a recipe for forced technology transfer.
As highlighted in the March 2018 Section 301 report of the US Trade Representative (USTR), this charge has become the poster child of the US-China dispute and the foundational evidence for Trump’s tariffs. This has occurred despite the fact that the USTR admits (on page 19 of the March 2018 report) that there is no direct evidence to support the allegation that technology transfer is forced by joint ventures that represent voluntary agreements between US and Chinese partners. Once again, the false narrative apparently matters more than fact-based analytics.
Market access is best addressed through the formalization of cross-border investment rules and standards that are stipulated in a bilateral investment treaty (BIT).
The United States currently has 42 BITs on the books and China has 145. Under a BIT, foreign ownership caps can be eliminated, thereby rendering joint ventures unnecessary and taking allegations of forced technology transfer off the table.
Restarting BIT negotiations would be the single best strategy to resolve the thorny issue of forced technology transfer.
?Trans Pacific Partnership.
The political decision to abrogate America's commitment to TPP in the first days of the Trump presidency was a mistake. This multilateral agreement provided a high-quality framework linking 12 nations accounting for 40% of world GDP through cross-border trade liberalization, labor standards, intellectual property rules, Internet protocols, and environmental norms.
With China on the outside looking in, TPP would have provided a powerful mechanism for Chinese conformity to many of the structural norms that are currently being contested. While a rethinking of America’s TPP strategy may not be politically possible for President Trump, it may well be a realistic option after the 2020 presidential election.TPP將為中國遵守目前備受爭議的許多結構性規范提供一個強有力的機制。雖然對特朗普總統來說，重新考慮美國的TPP戰略在政治上是不可能的，但在2020年總統大選之后，這很可能是一個現實的選擇。
?Global cyber accord.
Like the trade conflict, this is not a bilateral problem. The US and China should take the lead in forging a global cyber accord, complete with pooled metrics of cyber incursions, attack-reduction targets and a robust dispute-resolution mechanism.
The United States and China are on a collision course. The world’s two largest economies have accounted for fully 44% of world GDP growth since 2008. If they opt for a superficial resolution or fail to come to terms on their trade conflict, the global economy could well falter. Resolution is possible but it won’t be easy in the current climate.
Saving-short America's bipartisan political support of China bashing is especially problematic in threatening to turn a trade war into a protracted and destructive economic cold war. Now, more than ever, a fragile world is in desperate need of political will and wisdom — and a leadership courage that is sorely lacking today.