Image credit: AP Photo/Alex Brandon
by Amy Karam
June 8, 2018
If you are holding your breath for the U.S.-China trade war threat to be over so that you can get back to business as usual, think again – or take a really deep, long breath.
The U.S.-China trade war sparring, as damaging as it is to the global economy, is only the symptom of a much bigger issue and challenge. The real issue is that there is a global economic power-shift taking place between these two superpowers. The trade wars are simply a reactive response to this awakening — a power struggle. The greater issue to be concerned with is that this is actually a war on ideology. The West is now waking up to the reality of new global order and trying to hold on to its past ability to influence trade practices – but it might be too late to preserve the way it has been.
How did we get here? The aggregate GDP of G7 member states with developed democracies was nearly 70% of the global economy three decades ago and with this economic power came the opportunity to govern global trade protocol. The member nations shared similar values, democracies, and part of their charter was to assist emerging nations in their development plans. They were successful in contributing to this last goal and, as a result the aggregate GDP of the G7 has decreased to nearly 50%. Emerging economies like China grew to the point where they earned a place at the table and the G20 was created. However, some of these new members do not share all of the values of a democratic state, play by different rules, and so there is a new playbook in the global economic, geo-political, trade order of today.