Battle of the Great Powers:

Implications of the Sino-American Tensions on the Modern World Order

Introduction

The Sino-American relationship has experienced a rapid deterioration in recent years, marked

by escalating tensions since the inauguration of Donald Trump as the President of the United

States in 2016. The adoption of protectionist policies by the US, driven by concerns over the

trade deficit with China, resulted in a trade war characterized by the imposition of tariffs.

These actions have strained diplomatic relations between the two countries, which was

further strained by geopolitical tensions in the Asia-Pacific region, particularly in the South

China Sea. The Biden administration has continued to maintain a firm stance against China,

sustaining trends of economic decoupling and diplomatic distrust between the two countries.

While the adverse impacts of deteriorating trade and diplomatic relations between China and

the US on both countries are undeniable, it is essential to analyze the global implications of

this trend over the past decade. Former US Secretary of State Henry Kissinger, a key figure in

the establishment of formal relations between the US and the PRC in the 1970s, has

emphasized the significance of close relations between the two major powers in stabilizing

world order (Lau, 2023). Thus, this paper aims to provide insights as to why the United

States, as the most influential nation in the world, should engage China as a rising power.

From the rivalry of great powers to the disturbance of global order

The recent US-China tensions have detrimentally impacted the world order in two ways: By

the disruption of the global economy through growth slowdown and supply chain disruptions,

and the damaging of international diplomatic relationships due to geopolitical complications.

One of the major economic impacts of the US-China trade war would be its disruption of the

global supply chain, which Huang and Smith (2020) find to have hindered the incentive for

major investments around the world. Normally, global supply chains function based on the

principle of comparative advantage, which encourages developing and developed countries to

each play different roles according to the efficiency or cost of producing certain goods.

However, the introduction of protective tariffs can be seen as a political intervention of this

free-market policy, putting multinational corporations at greater production risk as they

accommodate such policies by basing their production in countries with less comparative

advantage instead. Dorsey (2019) further noted how the American actions have inspired the

rise of protectionism around the world, for example in India’s adoption of tariffs in June

2019, showing the side effects of the US-China trade war in impeding global trade.

The strategic competition between China and the US has had a significant impact on the

global political order. Both countries have pursued strategies to expand their global influence,

including enhancing bilateral trade with third countries and proliferating regional conflicts,

such as those in the Middle East and Southeast Asia. Consequently, these actions have

strained bilateral relations and alliances among countries, as smaller nations are essentially

compelled to choose sides between the two great powers. Singapore and Saudi Arabia serve

as notable examples of this dynamic. For Singapore, a nation that has traditionally enjoyed

close ties with both great powers, Peng (2022) points out how the deteriorating

Sino-American relationship has caused a dilemma in its diplomatic policy. Acknowledging

how picking sides would negatively impact Singapore’s diplomatic power and economy, the

country continues to treacherously balance its realistic need for economic cooperation with

the Chinese, and the American pressure for Singapore to align with their strategic interests.

Chivvis et al. (2023) noted the reservations of Saudi Arabia on America’s confrontational

stance towards China, given the promising prospects of Chinese economic cooperation. This

marked a major diplomatic disagreement between the two traditional regional partners of the

Middle East, contributing to the damaging of Saudi-American relations, as Saudi Arabia

seeks greater collaboration with China in terms of trade and security. Therefore, scholars

including Peng (2022) and Zaidi & Saud (2020) have raised fears that such aggressive actions

by China and the US to consolidate allies indicate the brewing of a second Cold War, which

would submerge the entire world into a ‘Thucydides Trap’, dividing international politics for

years to come.

Prospects of greater Sino-American cooperation

In opposition to the ‘Thucydides Trap’ theory, Zaidi and Saud (2020) identified the American

hostility towards China as an overreaction, with China’s limitations in military reach and

global influence, in addition to their socio-economic problems related to growth slowdown

and aging population. Given the significant impact brought by the hostility between the

world's two major powers on the global economy and political landscape, the rapprochement

of China and the US can be recognized as a crucial element for the restoration of a peaceful

world order. This section of the essay will explore the potential ways in which US-China

cooperation could be enhanced. Specifically, as the leading global power, the US should seek

to resume its economic and diplomatic engagements with China.

The restoration of global trade depends on the resumption of normal trade relations between

China and the US. It is clear that the US has failed to achieve its goal of recouping the trade

deficit by initiating the recent trade war against China, a point echoed by Dorsey (2019),

Huang & Smith (2020), and Zaidi & Saud (2020). Therefore, the time has come for the US to

reinitiate cooperation with China through the abolition of import tariffs on Chinese goods.

Looking forward, Zaidi & Saud (2020) optimistically view that it is only natural for the US

and China, the two leading economies of the world, to eventually restore their relationship as

close trading and economic partners. This would represent positive prospects for a full

recovery of the post-pandemic economy.

Furthermore, international organizations and agreements could represent valuable

opportunities for the US to incentivize diplomatic cooperation with China. As pointed out by

Zaidi and Saud (2020), China's active involvement in global affairs through these channels

can enhance its sense of responsibility as a rising global power. This has been demonstrated

in the past through China's admission into the World Trade Organization in 2001, and its

participation in the American-led global anti-terrorism initiatives in the early 2000s. As such,

not only would the bilateral trust and understanding between China and the US be fostered,

but the world order would also be stabilized by the intricate cooperation of these two major

global powers (Zaidi & Saud, 2020).

Conclusion

To conclude, it is important to recognize that the ‘Thucydides Trap’ perceived by the US is

not an inevitable outcome, and the protectionist economic policies have proven to be harmful

for both the US itself and the world order. Sino-American tensions of the past decade have

far-reaching international consequences, including disruptions to the global economy and

supply chains, as well as the straining of global politics due to the US-China strategic

competition. In light of concerns that this might escalate into a new Cold War, this paper

stresses the urgency for the US, as the world's most influential power, to engage with China,

the leading rising power, in order to mitigate the global implications of this rivalry. By

pursuing enhanced economic cooperation and diplomatic dialogue, the US and China can

work towards reducing tensions and promoting stability in the global order.

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