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The Sino-American Cold War’s Collateral Damage

27 8 3

CLAREMONT, CALIFORNIA – The escalating trade feud between the United States and China is increasingly viewed as the opening campaign of a new cold war. But this clash of titans, should it continue to escalate, will cost both parties dearly, to the point that even the winner (more likely to be the US) would probably find its victory Pyrrhic.

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Yet it is the rest of the world that would pay the steepest price. In fact, despite the low probability of a direct military clash between the US and China, a new cold war would undoubtedly produce collateral damage so far-reaching and severe that the very future of humanity could be jeopardized.

Already, bilateral tensions are contributing to an economic decoupling that is reverberating across the global economy. If the end of the Cold War in 1991 launched the golden age of global economic integration, the beginning of the next cold war between the world’s two largest economies will undoubtedly produce division and fragmentation.

It is easy to imagine a world divided into two trade blocs, each centered on a superpower. Trade within the blocs could continue, or even flourish, but there would be few links, if any, between them.

The global financial........

© Project Syndicate