Critical Moment for Relations between the United States and China

The relationship between the major superpowers of the United States and China is undergoing a critical period. Relations between the two countries are likely to be drastically redefined in the wake of finding the origins of the coronavirus pandemic, and could seriously risk stability and the world order.

In 2018, Donald Trump reset the relationship with China and started a trade war as part of an aggressive and protectionist foreign policy. After an 18-month confrontation, the U.S. managed to inflict damage on China’s economy, which suffered its first slowdown in many years. Nevertheless, Trump far from resolved the large commercial deficit with China (the main provocation for the trade war), while at the same time he did significant harm to American business and consumers.

On Jan. 15, China and the U.S. finally reached a preliminary resolution, at least with respect to the commercial dimension of the conflict. The U.S. committed to eliminating tariffs, and in exchange, China agreed to increase its purchases of agricultural products. A photo showing how pleased the parties were appeared only three days after China gave the COVID-19 genome to the World Health Organization.

With the rapid spread of the pandemic in the U.S., Trump acted predictably: He politicized the matter, and made China the scapegoat for his terrible management of the crisis. Trump used the derogatory term “Chinese virus” and took it upon himself to spread all kinds of conspiracy theories about the origin of COVID-19, which so far have been denied by U.S. intelligence experts. China was not silent and fought back in a way that was unusually harsh for traditional Chinese diplomacy.

Even though Democrats appear to be slightly more moderate, there is broad agreement with Republicans in how to deal with China. Amid growing anti-China sentiment in the U.S., Joe Biden does not want to fall behind Trump in the presidential campaign, and has also leveled charges against China. This situation presents two serious risks: the increasing possibility that the two economies will pull apart and, at the same time, the possibility that there will be a direct military confrontation, with the South China Sea as the most likely setting.

The truth is that economic decoupling is not very likely, as the eventual consequences for both countries would be disastrous. China and the U.S. have the greatest commercial relationship in history, and solidly depend on each other economically. But Trump believes in his policy, and has already taken the first steps in that direction, imposing restrictions on the ability of China to provide critical technological supplies. To that we can add military considerations, where the smallest spark could unleash a catastrophe. Sea and air incidents involving what China considers its territorial waters have increased since the pandemic started. And on top of that, several countries have made territorial claims to those waters.

On the other side, President Xi Jinping is insisting that negotiations continue in order to maintain commercial agreements with the U.S., while he faces serious problems due to the pandemic’s impact on China’s economy and international image. It is not possible for China to fully recover without stable and reliable relations with the U.S. Accordingly, Xi recently gave a speech in which he asked the Chinese people to “be ready for unprecedented external challenges.” Will the pandemic be just the beginning of something much worse? That will be up to Trump and Xi.