The latest U.S. National Security Strategy document released by the Donald Trump administration has attracted the attention of commentators for how it talks – and doesn’t talk – about China. 

“Gone are the sweeping declarations about China being America’s most consequential geopolitical challenge,” CNN noted. “Instead, this latest document… emphasized the U.S.-China economic rivalry above all.”

This change is one that challenges the framing of the U.S.-China relationship as a second Cold War. 

After World War II, the communist Soviet Union and the capitalist and democratic United States emerged as the two dominant global powers. The rivalry between these two superpowers was in terms of their starkly opposing ideologies, and the different economic systems under which both operated. The blocs led by them were largely separated by the flow of goods, finance and technology. While some limited exchanges did occur, particularly in commodities, the overall structure – while varying over time – remained one of high insulation. 

That is not the case now. 

The ideological faultlines that sustained the Cold War no longer exist. The same framework, therefore, no longer applies. Unlike the Cold War, the current global trend is more toward political and strategic fragmentation rather than economic decoupling.

A Different Landscape

Today, the world’s economic landscape is fundamentally different. Production happens in multiple stages, in several countries, through global value chains. Intermediate goods pass several borders before the final goods are produced and traded. This means that any economic decoupling between political groupings is very costly to achieve, at least in the short-term.  

What is observable is a degree of fragmentation in trade. Recent

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