Has the US already lost to China? Trump’s policies and the shifting global order

In Trump’s ideal world, these two policies will result in the world’s best companies rushing to the US to make it a manufacturing powerhouse and create lots of high-quality, dignified jobs for Americans. Prices will come down because more will be produced, and government deficits (borrowings) will come down since the US won’t be fighting wars far away from its shores. Over time, the US will surge ahead of the pretenders to the throne (such as China) as the sole global superpower.

Impact of Trump’s policies

In the real world that most people inhabit, the consequences are almost exactly the opposite. Trump’s policies have led to centuries-old allies like Canada rethinking their association with the US even as they bring adversaries (such as Russia and China) and potential friends (such as India and Brazil) to join hands.

Many are increasingly marking this moment as the time when the US accelerated its own demise as a superpower and, far from holding back China’s rise, advanced it. Sample what Jamie Dimon said recently during an interview. Dimon is the Chairman of the Board and Chief Executive Officer of JPMorgan Chase & Co.,a global financial services firm with assets of $3.2 trillion and operations worldwide.

When asked what is his “biggest worry right now”, Dimon said: “My biggest worry is that 30 years from now, we may read a book titled ‘How the West Was Lost’. It could describe how, starting with Russia’s invasion of Ukraine and terrorism in the Middle East, Iran, Russia, North Korea — with some help from China — were able to dismantle the post-World War II order of law and stability. That system had been quite successful… In this scenario, the world fragments into competing power bloc bilateral alliances, resembling the pre-WWI or pre-WWII era, where every nation has to figure out how to protect itself. And in that environment, the strongest nation — China — could leave others acting as its vassals.”

At the going rate, such a book and many others on this topic will likely be written much sooner. But it is interesting to note two books that have already been written on this very topic. Anyone who wants to understand how US-China rivalry could play out, and especially how it may do so to China’s advantage would find it worth their time to read them.

Both are written by Kishore Mahbubani, who is currently Distinguished Fellow, Asia Research Institute, National University of Singapore. But he has also been a career diplomat for more than 3 decades with Singapore Foreign Service, and has served as President of the UN Security Council.

The first one, which came out in 2018, is titled “Has the West Lost It?: A Provocation”. This book talked about the West (not specifically the US) and saw its rise over the past 200 years as an aberration. “A brief comparison of the past 200 years with the previous 1,800 years will provide the answer. From AD 1 to 1820, the two largest economies were always those of China and India. Only after that period did Europe take off, followed by America.

Viewed against the backdrop of the past 1,800 years, the recent period of Western relative over-performance against other civilizations is a major historical aberration. All such aberrations come to a natural end, and that is happening now.”

By pointing out the West’s strategic errors, hubris and blindness, Mahbubani argues that “the era of Western domination is coming to an end”. In this book, he stated that while it is not inevitable that China will lead the world, “it is inevitable that the world will face a troubled future if the West can’t shake its interventionist impulses, refuses to recognize its new position, or decides to become isolationist and protectionist.”

Here’s an example of that, mentioned in one of the footnotes. “The European leaders, especially Merkel and Macron, were right to warn Trump in private that the American decision to withdraw from the Paris Agreement would increase the likelihood of a world led by China.”

According to the minutes from May 2017 G7 meeting obtained by Der Spiegel, Angela Merkel, the German Chancellor, told Trump,“If the world’s largest economic power were to pull out, the field would be left to the Chinese.” When Trump decided to withdraw, Macron said resignedly: “Now China leads”.

However, this book was, as Mahbubani puts it, “a gift to the West” as it “reminds the West how much it has done to elevate the human condition higher than ever before. And it would be a great tragedy if the West were to be the world’s primary instigator of turbulence and uncertainty at the hour of humanity’s greatest promise.”

By 2020, Mahbubani came out with a much sharper book, titled “Has China Won?: The Chinese Challenge to American Primacy”. This one placed the two main protagonists squarely in front of each other and analysed their strategic strengths and the mistakes they needed to avoid to win the world, as it were. It is another matter that the author expected — like most others — that the Trump era would be over either by 2021 (when he loses to Biden) or by 2025 (when a new President takes over in case Trump wins against Biden in 2021).

As it happens, thanks to Trump’s loss in 2021 and his remarkable comeback against Kamala Harris to win the election last year, Trump and his policies are absolutely central to what is happening in this game of great powers. In a quaint way, Trump’s delayed second term ensures that this book doesn’t sound dated; indeed, it is an essential read.

Playing the long game

So, has China won? That framing is a provocation, as was the title of his other book. (Source: amazon.in)

So, has China won? That framing is a provocation, as was the title of his other book. The point Mahbubani makes is that the US seems to lack a long-term strategy towards China, even though now it is absolutely clear — this was written in 2020 — that the geopolitical contest between the US and China will continue for the next decade or two.

What is remarkable about the US establishment is that for all the issues on which the country is polarised, there seems to be one issue on which Trump enjoyed complete support — that China poses the greatest threat to the US. Mahbubai quotes everyone from Trump’s former Chairman of Joint Chief of Staff to George Soros (a billionaire who spent millions to prevent Trump from getting elected) to Democratic Party leaders such as Chuck Schumer and Nancy Pelosi to underscore this point.

And yet for all this consensus, there is a surprising lack of strategy or a faulty strategy at best. For instance, one of the ways in which the Soviet Union lost out to the US during the Cold War was in trying to match the US on defence spending. But even at its peak, point out Mahbubani, the Soviet Union’s GDP was only 40% of the US. It is no wonder that the Soviets could not keep pace with the US. But China is not fighting the US in the same manner; it has learnt that lesson from the collapse of USSR. It is instead focussed on building up economic might. It is not difficult to imagine that in the next three decades, Chinese GDP will dwarf the US.

What will the US do then? Is the massive defence spending justified for the US when China is not playing that game? Similarly, the US won the Cold War by stringing up alliances across the world and by leveraging its soft power. Today, it is hurting its allies, eroding its credibility, and rapidly losing its soft power. Another similar mistake is that the US is abusing the power of the US dollar in an ad hoc manner instead of building an international case for its economic sanctions.

This is eroding trust in its biggest weapon for controlling and shaping the world order: The dominance of the US dollar in international trade. Yet another mistake is to treat the face-off with China in the same light as the Cold War: A war between capitalism and communism. But Mehbubani says that it only shows that the US doesn’t even know its rival. “For example, is America making a fundamental error of perception when it views the CCP as a Chinese Communist Party? This would imply that the soul of the CCP is embedded in its communist roots. Yet, in the eyes of many objective Asian observers, the CCP actually functions as the ‘Chinese Civilization Party.’ Its soul is not rooted in the foreign ideology of Marxism-Leninism but in the Chinese civilization.”

In essence, the author argues that America is making the classic strategic mistake of fighting tomorrow’s war with yesterday’s strategies. And from the evidence of the past five years since this book came out, it is hard to argue otherwise. Both these books are riveting reads and provide heaps of perspective on the US, China and how this rivalry may play out. Since the author is based out of Singapore, he furnishes an alternate and deeply insightful perspective for readers across the world, and provides analysis for those living in countries such as India or Japan or Australia to wrap their heads around the tectonic shift taking place right in front of us.