How scared should you be of ‘the China squeeze’?

“CHINA beats you with trade, Russia beats you with war,” mused US President Donald Trump on Aug 11. His reflection came mere hours before he extended a fragile trade truce with China for another 90 days.

After months of tit-for-tat tariffs, the Sino-American trade war has settled into uneasy stasis. But China is using the time to hone a sophisticated arsenal of devastating economic weaponry. Even as the sides contemplate a broader deal to stabilise the planet’s most important trading relationship – worth US$659 billion (S$843.7 billion) each year – China knows that its power is not in what it buys, but in what it sells.

That is a far cry from the last time Chinese President Xi Jinping and Trump went head-to-head on trade in 2019. Xi agreed to buy more American goods in a deal much criticised in China. It fitted a clumsy pattern.