Markets Are Underpricing the Possibility of a U.S.-China Economic War

Stay informed with FP’s news and analysis as the United States prepares to vote.

Beijing may claim to be indifferent to both Vice President Kamala Harris and former President Donald Trump in the upcoming U.S. presidential election, but don’t be fooled. While China may not endorse a candidate, the approach it takes to relations between the world’s two most powerful countries will look very different depending on who is sworn in come January.

If Harris wins, she is likely to carry on the Biden administration’s strategy toward Beijing, at least initially. That means investing in priority technology sectors, aligning with allies and like-minded countries, and imposing technology restrictions on China, while also seeking to build guardrails to keep the competition from devolving into outright conflict. Although China’s leaders do not accept the United States’ view of relations as being defined by “strategic competition,” they still aim to prevent a further decline in ties. This allows them to focus on technological self-reliance, strengthen global south alliances, and wait for a favorable power shift.

Beijing may claim to be indifferent to both Vice President Kamala Harris and former President Donald Trump in the upcoming U.S. presidential election, but don’t be fooled. While China may not endorse a candidate, the approach it takes to relations between the world’s two most powerful countries will look very different depending on who is sworn in come January.

If Harris wins, she is likely to carry on the Biden administration’s strategy toward Beijing, at least initially. That means investing in priority technology sectors, aligning with allies and like-minded countries, and imposing technology restrictions on........

© Foreign Policy