Dr. Saeed Attar, referring to the trade war between the US and China, which has been going on for about 16 months by abolition of cross-tariffs, said: “To understand the trade tension between China and the US, we need to go a little back. During the Cold War, the two countries were informal allies in opposition to the former Soviet Union. Indeed, China became China when the gates of its politics and economy were opened to America. With the collapse of the Soviet Union in the early 1990s, America’s view of China changed.”

 

US Sensitivity to China

The political economy analyst explained: Earlier this decade, the US Congress issued the first warnings, so that in a report released on the US national security in 21st century that was a kind of future study, China along with a few other issues, was described among major threats against America in the next century. There were economic and political reasons for this feeling of intimidation from China. The economic growth of China was so fast that its GDP share could surpass that of the United States in the next few decades.

In addition, given China’s Communist political system, and its long history of being an empire, Attar said, it could jeopardize institutions arising from Liberal Democracy and the current world order resulting from Western-American thought and action.

Yazd University professor emphasized that the current conflict between the United States and China is not related to the Trump era, but has intensified under Trump’s presidency, saying: Trump is the most important US president in the last three decades to bring this hidden conflict to the surface. It is pulling in and wants to make dramatic changes to past trends.

He pointed to the impact this trade tension has had on the world economy, and said the total share of the two countries in more than $80,000 billion of global production is more than 40%. Clearly, when tensions occur between the two countries who account for nearly half of the world’s production, this affects global output and the economy and even the politics of many countries.

 

US Strategic Tension with China

Concerning the warnings issued by analysts on the implications of these tensions and reactions shown by the world’s financial markets, Attar said: “The market warning is quite natural. Markets are concerned about their short-term and long-term interests and do not welcome tension between the two powers, but the United States will continue this tension for the sake of its long-term interests to achieve the desired results.

The analyst pointing to the future of these relations and the continuation of the US approach towards China and the impact of the 2020 US presidential election, said: I believe that even if Trump was not President, there would still be some tension between China and the US. If you agree with this notion, the tension will remain though to a lower extent even if the US president is changed and someone from the Democratic Party takes over.

Attar added: US presidents regardless of their personality and party characteristics do not differ much in policies that serve America’s long-term interests. This is the point we need to keep in mind when predicting the future of the Joint Comprehensive Plan of Action (JCPOA) and other issues of conflict with the United States of America.

He noted: Another mistake of some analysts in our country is that we think a lot of things will change in the American election season. Note that when we refer to the US election season, we mean about a year and a half, namely about 40% of a presidential term. Clearly, this 40% of the time cannot be a victim of the issues of the day.

 

China, Major Issue for America

“While some of the less priority issues for American voters are on the margin this election season, the Chinese issue is not among them,” the political economy analyst added. Incidentally in the Trump ballot box are voters who have been hurt by China’s bold presence in the US market. This is precisely why Trump’s anti-China stance began in the 2016 election period, and in the 2020 election, Trump is seeking to reach a favorable point with China and sell it to voters who have been hurt by China’s trade policies. While the US is in relatively good economic shape with due regard to unemployment indicators, the strength of the USD and the capital market and China’s declining growth the US election season cannot put a serious pause in tensions between the two countries.

 

Tariffs the Main Cause of US-China Tensions?

Speaking about news reports on a deal to lift tariffs between the two countries and Trump’s remarks that he was a “man of tariffs” and that he had not agreed to lift tariffs on Chinese goods, he said he was still unaware of the details of the talks. No official information has been released in this respect. Although in many cases there is a gap between Trump’s stance and what is happening, if you look at the late 1960s and 1970s when the two countries came to terms on establishing political relations and formal diplomatic ties, you see a lot of ups and downs in relations between the two countries which are quite natural.

“Tariffs are not the reason for tensions between the two countries,” Attar added. There have been numerous cases ranging from China’s foreign exchange policies to its foreign trade policies to territorial and regional policies that have been the subject of controversy. So, negotiations have been going on for a long time, and I think that in the medium term, these negotiations will continue to reduce tensions.

 

China Is Not a Country of Violent Reactions

He also said that actions and policies on the other side of the conflict, that is the Chinese, are a very detailed issue that cannot be discussed due to time limit here. China is not a country of coercive reactions. You will find few instances where the Chinese react with anger. So don’t expect an aggressive stance from China.

Attar emphasized: The Chinese have historically been complex people and have attained some of their goals with particular elegance. For example, one of the Han Dynasty ministers, a dynasty that ruled China for 400 years, and many of today’s Chinese traditions that call themselves Han, were believed that in dealing with the stronger enemy. you should use the “5 instances of avarice”, namely: Give them fine and costly garments to wear; Give them delectable food; Give them beautiful women and exuberant music; Give them lofty buildings, slaves, and grain store sand for enemies who have a desire to negotiate, get them the honor of attending a royal feast with the Emperor and having a meal at the Emperor.

“The Chinese are trying to make the American side exhausted and allured by making some retreats and offering them the olive branch. If person standing on the other side is Trump, a man who is interested in showoff and media coverage this kind of playing is likely to be favored by the Chinese.

Simply put, the two sides are pulling the ropes of interest, each using a different approach. The disturbing situation in Hong Kong and then possibly in Taiwan could also put pressure on the Chinese in both external and internal dimensions. All this will continue until a new equilibrium point is reached that will be very different from the previous point of equilibrium.