US-China trade war reflection of shifting centre for global trade, author says
- Europe, Southeast Asia stand to benefit from US-China conflict, according to Dr Parag Khanna
- By not joining Trans-Pacific Partnership, the US could be cut out of growing Eurasian centre of trade, Khanna says
The rising trade tensions between the United States and China should not be defined simply as a new cold war between the world’s two largest economies, according to international relations expert Dr Parag Khanna.
It is a much broader dynamic that reflects the changing centre of gravity for trade from one focused on the transatlantic movement of goods to Eurasia, said Khanna, the founder of Singapore-based strategic advisory firm FutureMap and the author of six books.
“When it comes to the trade war, there are more than two players,” Khanna said. “This is a many directional tug of war. China’s loss is someone else’s gain. It’s Asean’s. America’s loss is someone else’s gain. It’s Europe’s.”
Khanna, whose latest book is The Future is Asian, is a featured speaker at the Credit Suisse Asian Investment Conference in Hong Kong on Tuesday.
About US$1.6 trillion of trade currently occurs between the European Union and Asia – far outstripping the US’s trade with either region, Khanna said. That is expected to grow to US$2.5 trillion in a decade, he said.
Against that backdrop, the Trump administration is wise to seek reciprocity in trade with China, but the US must remember that Europe is its “geo-economic competitor”, Khanna said.
If the US and Europe speak with one voice when it comes to opening up China, but Europe is the only one who has reached free trade agreements throughout Asia “guess who wins?”, he said. “As a student of diplomacy and strategy, it is not the first time we’ll see where America does the heavy lifting on an issue and Europe steals the prize.”