Despite the trade war between the US and China, the endless blacklists of Chinese companies in the US, along with the new Biden Administration’s anti-China stance, and the US government’s barrage of criticism of the EU-China Comprehensive Agreement on Investment (agreed in principle at the end of 2020) the truth is that in early 2020 the US and China signed, and maintain in force, a Trade Agreement called “Phase 1”, suggesting an intention to deepen the relationship in subsequent phases.
This US-China Trade Agreement is as complex and broad as the EU-China Comprehensive Agreement on Investment, and in line with the then prevailing US narrative, includes an obligation for China to purchase large quantities of US goods.
Reading the international news, one would say that the increasing deterioration of relations at various levels between the US – currently, the only superpower – and China – the biggest of the new emerging powers – would preclude the existence of such a Trade Agreement. However, not only did not prevent it (the Trade Agreement was not denounced), but negotiations have been underway for further implementation..
Behind the diaphanous cloak of official American rhetoric on a new consensus on China – implying a global demonization of China in direct proportion to its growing international influence – there is a pragmatic policy of cool-headed American policymakers who see the difficulty in having a consistent American policy beyond a general internal consensus of “get tough on China”. American think tanks and elites are well aware that the current trade war will change practically nothing and they want to put an end to it; but they are well aware of the internal political difficulty should some constancy of direction not be maintained and by articulating contradictory interests: American companies want access to the huge market of Urban China but American leaders have projected the country as an evangelist of democracy and civil and political rights and have been held hostage to this discourse (with occasional exceptions when access to energy sources are concerned or geo-strategic considerations that may jeopardize the Pax Americana).
Both elites and policymakers are well aware that in the multipolar world in which we find ourselves and in current international relations, economic interdependence is often necessary and irreversible; for example, funding the Biden Administration’s ambitious plans for infrastructure, social and military investment requires there to be no hesitation by major borrowers of US Treasury bonds (China is second with about 15% of the total). Otherwise, interest rates will rise and place a drag on the issuing of bonds by American companies, slowing down the pace of post-pandemic economic growth. And it is indeed unlikely that China will reduce its purchase of large amounts of US Treasury Bonds.
In short, the American rhetoric of confrontation towards China serves to neutralize the matter in domestic political debate and American tabloid culture; however, if we want to understand the real US policy, we must closely follow the negotiations around the US-China Trade Agreement.