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China’s ‘Belt & Road’: Impact on trade war with the United States

Authors: David Meyer*, Washington University in St. Louis
Topics: China, Economic Geography, Asia
Keywords: China, United States, trade war, Belt & Road, southeast Asia
Session Type: Paper
Presentation File: No File Uploaded

The “trade war” between China and the United States increasingly has shifted to an “action and reaction” behavior. United States political leaders argue that the trade deficit with China is not sustainable; it harms the United States economy. The recent emergence of this dispute contains contradictions. The relative importance of this deficit peaked a decade ago, prior to the financial crisis of 2008/2009, and the significance of the United States to China’s economy and its trade likewise peaked at that time. China’s “Belt & Road” initiative now includes economies that, in aggregate, along with China, comprise a total economy that surpasses the United States. Trade of China with “Belt & Road” economies now exceeds that with the United States. Regional groupings of countries in the “Belt & Road” initiative diverge significantly in relative importance to China. This suggests China’s trade relationships with these countries will take on diverse approaches. Southeast Asia emerges as a critical economic region for China’s future economic growth and trade, implying that countries of that region will play a major role in the “Belt & Road” initiative. The paradox of the “trade war” between China and the United States points to a major realignment of the global economy—the United States raises the stakes in the “trade war” even as its importance to China is in long-term relative decline.

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