Despite the trade war between the U.S. and China, the endless American blacklists of Chinese companies, the Biden administration’s anti-China rhetoric and the American government’s barrage of criticism aimed at the EU-China Comprehensive Agreement on Investment signed at the end of 2020, the fact remains that the U.S. and China signed a trade deal at the beginning of 2020. This deal remains in force and is said to be phase one, that is, the intention is to strengthen it in subsequent phases.
This U.S.-China trade deal is as complex and broad as the EU-China Comprehensive Agreement on Investment, and in line with the narrative that was then prevalent in the U.S., includes a provision in which China is obligated to purchase large quantities of American products.
Reading the international news, it would appear that the increasing multilevel deterioration of relations between the U.S., the only current superpower, and China, the strongest of the new emerging powers, would preclude such a trade deal. Not only did it not preclude it, but no one denounced the trade deal, and negotiations aimed at strengthening it are still underway. Behind the transparency of official American rhetoric about a “new consensus on China,” involving a global demonization of China in direct proportion to its growing international prominence, level-headed American political officials have a pragmatic policy. They recognize the difficulty of having a consistent American policy that goes beyond a general internal consensus to get tough on China.
America’s elite and its think tanks are well aware that the current trade war will change practically nothing and they want to put an end to it, but they are also very conscious of the internal political difficulty of staying to a somewhat steady course but expressing contradictory interests. American companies want access to the massive urban China market, but American leaders have gone so far in projecting the country as an evangelist of democracy and civil and political rights that they are now held hostage by that rhetoric, with the occasional exceptions for when the issue at hand is access to energy sources or geostrategic considerations that threaten the Pax Americana. Both the elite and the politicians know that in the multipolar world in which we live, with the current state of international relations, economic interdependence is irreversible and often necessary. For example, financing the Biden administration’s ambitious plans for infrastructure, social and military investment requires immediate agreement from major U.S. Treasury Bond holders. (China is second in line, holding around 15% of the total number of treasury bonds.) Otherwise, taxes will increase and drag down the bonds issued by American companies, slowing the rate of post-pandemic economic growth.
As a matter of fact, it is unlikely that China will reduce the purchase of a large quantity of U.S. Treasury Bonds.
In short, America’s confrontational rhetoric toward China serves to neutralize the issue in domestic political debate and American tabloid culture, but if we want to understand America’s true position, we must closely follow the negotiations surrounding the U.S.-China trade deal.