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US could launch a trade war with China within months, former US defence official says
China needs to make significant moves to rein in North Korea ‘in next few weeks’ or face punitive US trade moves in early 2018, Graham Allison predicted

Signs that the US government may launch a trade war against China are bargaining chips being used by Donald Trump’s White House to force Beijing to do more to contain North Korea’s nuclear weapons programme, a US political scientist and bestselling author said. 
 
Graham Allison, a former dean of the Kennedy School of Government at Harvard University, told the South China Morning Post that unless China takes significant action to constrain North Korea “in next few weeks”, the US will hit China with unilateral trade measures “early in the new year”.
 
“If the Trump administration undertakes these unilateral initiatives, the Chinese government has already said it would retaliate,” Allison cautioned. “So we could – in six months – find ourselves in a trade war that would be very damaging to both countries.”
 
Allison argued in his book, Destined for War, that war between the US and China in the decades to come is “much more likely than currently recognised” unless the two nations find an escape from “Thucydides’s Trap” – Allison’s coined phrase for the natural, inevitable conflict that occurs when a rising power threatens to displace a ruling power.
Thucydides was a 5th-century BCE Greek historian and politician who wrote that what made the Peloponnesian War inevitable was “the growth of Athenian power and the fear which this caused in Sparta.”
 
Allison, a former director of Harvard’s Belfer Centre for Science and International Affairs, also served as special adviser to the secretary of defence under President Ronald Reagan and as assistant secretary of defence for policy and plans under President Bill Clinton.
 
Soon after Trump’s first state visit to China in early November, the US signalled that the president’s administration was weighing a half-dozen trade enforcement actions to “fundamentally challenge Chinese trade practices”, with specific decisions expected by early next year, The Wall Street Jou r nal reported.
 
The bilateral tensions over trade frictions appear unsmoothed despite the signing during Trump’s Beijing visit this month of more than US$250 billion worth of business deals.
“The overall approach [towards China] now is not to negotiate over crumbs, not celebrate small deals that will have limited impact [on Chinese trade practices], ” one US official was quoted in the Journal.
 
Allison said in the interview that it is “clear that the US is on course to demand more Chinese adjustments [on trade issues]. Trump is determined to shrink the bilateral trade deficit with China.”
 
In the third quarter of 2017, the US’s trade deficit in goods with China reached US$103.1 billion, up 6.7 per cent from the same period a year earlier. Meanwhile, US exports to China in the latest period climbed 13 per cent, according to the most recent report from the US-China Economic and Security Review Commission, a US Congressional advisory body.
 
“It’s likely Xi will find ways to be more accommodating [on the trade agenda],” Allison predicted.
 
For Trump’s part, he appears prepared to compromise – more than he would otherwise – on the economic agenda, which right now can be “a bargaining chip” to deal with the security agenda, to achieve his top goal of reining in Pyongyang’s nuclear ambitions, the political scientist said.

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