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Mutual Sanction of the US & China; Conceivable Scenarios

2021/08/02 | Economy, Note, top news

Strategic Council Online: China has recently boycotted as many as 70 organs and citizens of the United States, among them Wilbur Ross, Secretary of Commerce of Donald Trump administration is seen. This is a reaction to the similar measure taken by the US to boycott seven Chinese authorities. The action-reaction measure is considered as the continuation of the trade war launched during the Trump administration. Now, the question is: What are the leverages and capabilities of the two countries? How this confrontation will proceed? Reza Majidzade, Researcher, development political economics

The importance of the US-China confrontation will be cleared when their trade volume with other countries of the world is compared. According to trade statistics, during the first two decades of the 21th century, trade relations of the US and China with world countries almost reversed. It means in the year 2000 when China had extensive trade relations with just some regions in Asia, Africa and small part of Latin America, the rest of the world were trade partners of the US. But in the year 2020, China had not a strong presence only in North America. This is only a part of “Made in China” perspective in 2025, based on which goods financial funding (especially in South America and Africa) and making traded partners indebted will proceed. Sanction, has so far, been the main strategy of the US to confront China. On the opposite side, China puts more emphasis to establish cartels and economic hegemony. But the options of the two countries in trade war are far beyond what mentioned above.

From one hand, China puts more emphasis on three options of coalition making or cartel establishment, economic hegemony and reciprocity. From the other hand, the US has inclined towards imposing sanction, making new ground to play in and coalition making or cartel establishment. If we assume that both countries have comprehensive information about the measures and practical options of the other side in foreign policy, then different scenarios of their confrontation in future might be identified based on each one’s options. However, acquiring new experience during confrontation can place new strategies and or options before each country. But generally, economic hegemony and expanding economic clout in different countries of the world is China’s top priority and preference. On the opposite side, sanction is the main US instrument in such a confrontation. On this basis, the following situations are conceivable in case of confrontation:

_ When China’s economic hegemony is there, the US imposes more sanctions. But in view of the China’s plan to influence different countries and make them depend on her, China’s achievement will be greater than that of the US. Although, it is possible that the achievements are lesser than the case without sanction, but China’s economic clout will increase the costs of the third party countries in abiding by the US sanctions.

_ Parallel with the expansion of China’s economic clout, the US makes a new ground to play in at international arena accompanied by imposing sanctions. Withdrawal of the US forces from Afghanistan and her signals on the leaving Iraq by the end of this year might be assessed as a shift of strategic international ground of the US from the Middle East to another region of the world where they have strong economic and strategic links with China or it can be a signal to change the playground in the same region with non-military resources. Even in this case, the China’s achievement is still greater than that of the US. In view of Biden’s non-aggressive attitude in foreign policy comparing with Trump, it seems that due to two decades of increasing economic and financial influence throughout the world, China has an upper-hand to bargain.

_ Since none of the above two possible options is sustainable, therefore, it is expected that the ground is more ample to confront at present situation. But gradually, and according to accompanying of G-7 member states with the US from one hand, and China’s allies like Russia from the other hand, other possibilities may take place that are highly depended on post-Corona economic equations and return of the world to ordinary situation.

Despite the two countries have direct strategies for such confrontation, but any conceivable change in future balances and routes that may take place, is not solely linked with the two countries. Measures taken by like-minded international players, trans-national big companies, global developments from technological point of view as well as strategic resources will also leave considerable impact on the future rout of the game.

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