Trade Tariffs Fuel Competition Between The U.S. And China for Global Dominance

CRE.Converge 2018Bisnow interviewed Stratfor Vice President of Global Analysis Reva Goujon in advance of her keynote presentation, “Geopolitical Gamesmanship,” at CRE.Converge 2018, Oct. 15-17, in Washington, D.C. Read an excerpt of the article below and register today for commercial real estate’s premier event.

When the U.S.’ $34B tariff on Chinese exports went into effect last month, it signaled to the world that a fight for economic power is underway.

An emerging economic force for decades, China’s exponential growth in recent years has begun to threaten the U.S.’ position as a global superpower. President Donald Trump has employed tactics such as tariffs in an effort to tip trade agreements in favor of the U.S.

It is a game of cat-and-mouse that could cost the global economy $430B. For Stratfor Vice President of Global Analysis Reva Goujon, tariffs are an obsolete strategy for dealing with global trade competitors in a modern economy.

“We are in this era of an emerging great power competition,” Goujon said. “This isn’t something that the current generation is all that used to, and it’s being played out primarily between the U.S. and China. The U.S. hasn’t faced a peer competitor like China in its history.”

Beyond tariffs, changing policies on investing in technology have been a sign of the growing competition between the U.S. and China. While tech has traditionally benefited from the cross-pollination of ideas at an international level, security questions have started to emerge on whether the U.S. should restrict the technology being used by China, and impose restrictions on U.S. companies investing in Chinese tech, Goujon said.

AT&T recently pulled out of a deal to carry a smartphone from Chinese company Huawei, and Congress proposed a new bill preventing branches of the U.S. government from working with service providers that use any equipment from Huawei or Chinese firm ZTE for security reasons.

From an industrial perspective, China has also been more lenient than the U.S. on laws impacting certain businesses. China, for instance, has limited restrictions on technology like drone delivery and automated vehicles, paving the way for accelerated progress in those areas.

“Technological competition is also a key battleground,” Goujon said. “When we talk about artificial intelligence development, in both the commercial and military spheres, this will be a game changer in the coming years. Whereas in the West, we are going to be rightfully concerned and trying to figure out concerns about data privacy, antitrust laws and ethics concerns, those concerns will not apply equally to China. That gives China time and space to catch up.”

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