Forget Russia: Trump’s China trade war risks breaking Asia’s fragile peace

 

“I see myself as an instrument of the Almighty and go on my way, regardless of transient opinions and views.”

–Kaiser Wilhelm II, 1910

While he was diabolically poor at follow-through, former President Barack Obama has the makings of a first-rate political risk analyst. Early on in his term, Obama keenly saw that Asia was where most of the future global growth in the world would come from, but was also the region where most of the global geopolitical risk lay. This basic insight was the motivation for Obama’s ill-starred Pivot to Asia, where the region was to rightly receive more strategic involvement from America.

Risk has been dangerously bubbling up in Asia for two basic reasons. First, and unlike in Europe where Russia is kept at bay and Germany caged, there is no multinational military organisation like NATO that both deters revisionist powers (in this case China) and keeps possibly frightening allies (in this case Japan) on the reservation.

This is largely because of the hugely counter-productive insistence of Japan’s elite to regularly pray at what my staff have come to call ‘The War Crimes Shrine’ at Yasukuni. Japan’s grudging failure to come to terms with its barbarism in World War II has alienated would-be allies such as South Korea, making the formation of a NATO-like organisation to keep the peace—and to keep America’s allies on the same page–impossible.

Second, the rise of China has created a state of being problem in East Asia; the United States is the dominant power there, and the Chinese wishes to re-claim its traditional historical dominance in the region. This basic fact—and the obvious tensions that flow from it—can simply not be wished away.

In typical business-like fashion, the Chinese leadership commissioned a study to look at historical examples over the past 500 years of what happened to the world when an emerging power (such as the China) collided with a status quo power (such as the US).

The doleful conclusion of the Thucydides study—so named for the geopolitical rivalry between Athens and Sparta that ignited the Peloponnesian War—was that, in 12 of the 16 past cases, the result has been bloodshed. Given that historical reality, the structural peril to the present world is so great only a statesman of great ability and subtlety is likely to buck the odds.

Instead of this, we have newly-inaugurated President Donald Trump, who so far has passed his audition to be the neurotic Kaiser Wilhelm of this era with flying colours. Whereas under Obama the US and China increasingly engaged in a strategic competition in East Asia in the South China and East China Seas, Trump seems intent on increasing the danger by adding an obviously harmful trade war to the menu.

Given that—unlike the Cold War where the Soviet and Western economies were strikingly separate—China and the US are inextricably linked economically, this is bound to hurt both countries, and nobble the world’s hopes for decent rates of growth. Beyond even this, it is pouring gasoline on the open fire of the inevitable Chinese-American competition in East Asia, making avoidance of the Thucydides trap infinitely harder.

Far worse still, Trump is heading into his showdown with China having just greatly alienated his many prospective allies in the region, in his breathtakingly counter-productive abrogation of the Trans-Pacific Partnership (TPP), an ambitious trade pact that would have welded America economically closer to key allies such as Japan, Australia, New Zealand, Vietnam, Malaysia, and Singapore.

Instead, by unilaterally walking away from the meticulously negotiated pact, Trump’s White House has allowed Beijing to whisper the poisonous words to America’s Asian allies, ‘The US is not to be trusted.’

So in his Wilhelm II audition—a vainglorious bumbler who bluffed the world into an avoidable conflict—Donald Trump seems a cinch for the part. He is taking China on over the wrong issues (macro-economics not geo-strategy), with the wrong balance of power (having just spurned America’s regional allies), at the wrong time (when the world desperately needs all the global growth that it can muster).

Under Obama, the US was firm but business-like with China, defending freedom of navigation in the seas there but working with the Chinese where it could, and furthering joint economic links that make it ever harder for Beijing to turn its back (due to its vast economic interests) on an American-dominated order. The results were impressive strategically, with much of East Asia openly and increasingly siding with the US over the neighbourhood bully.

Trump’s Kaiser Wilhelm impersonation throws all this out the window, imperilling America’s favourable strategic position. As as true when Obama came to power, Asia is once again the region in the world to watch, but for far more terrifying reasons.

Published in City AM London, January 23, 2017