The Interpreter: Trump’s Tariffs: Another Retreat From the Postwar World Order

That’s a difficult question for several reasons. One, no country like China (an enormous command economy but one reliant on foreign trade) existed in the 19th century. Two, Beijing itself has seemed uncertain about whether it wants to maintain or break the American-led order.

China joined the World Trade Organization in 2001 but has chafed against its rules. The country relies on American-imposed stability in parts of the world other than its own, but challenges that dominance in Asia.

Chinese companies need access to the enormous American market, and Chinese consumers rely on American products and services. But China also benefits from closing some markets that would otherwise be American-dominated, for instance on smartphone software, which gives Chinese firms space to grow their products.

The Interpreter: Trump’s Tariffs: Another Retreat From the Postwar World Order
The Interpreter: Trump’s Tariffs: Another Retreat From the Postwar World Order

Maybe hardest to know is whether China’s command economy is better- or worse-suited than the American free market economy to advance the national interest within a system of closed international trade.

Newsletter Sign Up

Continue reading the main story

Subscribe to the Interpreter Newsletter

Understand the world with sharp insight and commentary on the major news stories of the week.

Thank you for subscribing.

An error has occurred. Please try again later.

You are already subscribed to this email.

View all New York Times newsletters.

  • See Sample
  • Manage Email Preferences
  • Not you?
  • Privacy Policy
  • Opt out or contact us anytime

We often hear comparisons to the Cold War, which supposedly proved that the American economic system prevailed over the Soviet-style command system. But the Soviet economy collapsed largely because it relied on commodity prices, a vulnerability that remained in place during Russia’s catastrophic free-market 1990s and still today.

And the American economy was more centralized during the Cold War than is widely remembered. Though Americans told themselves that their geopolitical advances sprang naturally from private enterprise, many came from state-led projects, such as those that developed the space program or the internet. The country also poured money into strategic industries such as automobiles and steel during a period, the 1950s and 1960s, when vast international markets were opening up.

Yet now the United States is drifting into a strange place where it really does have the decentralized, unguided economy that it told itself it had during the Cold War, but it is now also closing access to the international trade that such a system requires.

And China, long unwilling to choose between an open or a closed world, is being pushed toward the latter. The country certainly presents itself as economically self-sufficient, something that becomes more true as its middle class grows into a robust domestic market. And its ability to direct vast resources to state-led projects, such as solar power or artificial intelligence, do promise the sort of geopolitical gains once achieved in the United States.

But the modern Chinese economy really dates only to the early 1990s, and it has always relied on American-led free trade, particularly access to the United States itself. While many critics of Mr. Trump’s tariffs argue that a self-imposed American decline will naturally aid China’s rise, this is merely another version of Mr. Trump’s zero-sum worldview. Maybe it’s correct. But it’s also possible that China, however tentatively, bought into the American-led order for a reason, and that the decline of this system will hurt Beijing, as well.

The safest bet, however, is almost always on the forces of the status quo. Mr. Bush’s 2002 foray into protectionism also initially looked like an end to the then-much-younger era of Chinese buy-in to the liberal world order. It wasn’t, and this might not be either. Time will tell.

The Interpreter is a column by Max Fisher and Amanda Taub exploring the ideas and context behind major world events. Follow them on Twitter @Max_Fisher and @amandataub.

Continue reading the main story

Similar Posts