US-China trade spat: Part of a wider Containment 2.0 in the making?

IT must have been obvious to China that the Trump administration's trade war is more that just about unfair trade practices. No surprise then, that Beijing called off further talks late last week.

As things stand, about US$200 billion in Chinese goods face a levy of 10 per cent, which will more than double in January. The latest round of tariffs comes on top of a 25-per-cent levy already imposed on about US$50 billion in Chinese imports. In turn, Beijing imposed retaliatory tariffs, ranging from 5 to 10 per cent on more than 5,000 items despite a warning that Washington will immediately launch Phase Three - tariffs on another US$267 billion in imports - if China targets US agricultural products tit-for-tat. As China's list includes meat, nuts, alcoholic drinks, chemicals, clothes, machinery, furniture and car parts - a lot of which come from US states that supported Donald Trump in the 2016 presidential election - stand by for another round of tariffs. The Chinese like to speak of the need for negotiation to settle differences, but the Trump administration is not interested in any offer from Beijing; rather, it wants to force US multinationals to pull out their investments from China and to cut off its access to US technology and markets.

Washington's actions must be seen against the backdrop of geopolitics, rather then just economics. President Trump is surrounded by foreign policy hawks who see China as an existential threat to America. They want the US to push back on every front.