The agreement reached during President Xi’s April 2017 meeting with President Trump at Mar-a-Lago on a 100 day plan to ease trade tensions did not have a long shelf life. For several months, the agreement appeared to have defused any intentions to consider more contentious protectionist measures. Accusations regarding currency manipulations also evaporated, as did concerns about cyber-security violations for economic gain. From China’s perspective, President Trump’s assurance that the U.S. would not play the Taiwan card removed the most contentious of concerns from the agenda. All this seemed to suggest economic issues would not become intertwined with security and political concerns. Yet, over the summer, signs that this would not necessarily be the case become apparent and this was confirmed by the lack of significant progress in the July U.S.-China Comprehensive Economic Dialogue (CED).

The likelihood that trade and foreign investment factors will continue to be a source of tension is discussed in my recently published book: Cracking the China Conundrum―Why Conventional Economic Wisdom Is Wrong (Oxford University Press, July 2017). These tensions stem in part from basic misunderstandings of the nature of the trade and investment relations between the U.S. and China that has contributed to an unnecessarily antagonistic relationship. These negative and highly emotional perceptions are nurtured by insecurities in the mindsets of both nations and reflect the mistrust between their respective civilian and military leaders. Contrasting political systems and cultural norms of society have always made it difficult for these two nations to work together. But ironically, with President Trump’s election and President Xi’s consolidation of authority, the potential for conflict is now greater not because of these differences but because of commonalities in their personal aspirations....

The article was originally published in Washington Journal of Modern China.

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