Mark Leonard laments the „end“ of „Chimerica,“ a term coined in 2006 by economic historians Niall Ferguson and Moritz Schularick to describe the economic relationship between China and America. A decade ago the superfusion of the twin superpowers aimed to form the axis of the world economy and mark their global dominance. Today, this once unique Sino-American relationship is on the rocks. The end of a peaceful coexistence would usher in a new era of zero-sum rivalry, which could be mutually destructive.

The author says, the ongoing trade war between the world’s two largest economies and Trump’s determination to rein in China’s rise as a science and technology powerhouse will trigger a “possible rupture” of Chimerica. By “threatening the survival” of the Chinese tech giant Huawei, which poses a long-term strategic threat to its US counterparts, the Trump administration has launched a “full-scale decoupling” between the US and China, which together have served as the engine of the global economy.

The author points out that US allies and other countries have been dancing at two weddings, doing business with both China and the US without complications. China is the world’s largest trader in goods and biggest trade partner for more than 120 countries, making it very hard for US allies to stop trading with China. But Washington’s determination to engage in “competition” with China could lead to a fundamental change.

With the trade war escalating, the world will inevitably be divided into two camps. To most countries, the US is, economically and politically, still more important than China. Its imports from the EU, Japan and Canada combined are more than twice its imports from China. Foreign investment in the US is four times that of China. If one day they have to choose between the two, many will decide for Washington over Beijing.

The author says behind the Sino-American conflict are two aspiring strongmen competing for primacy: Trump and Xi Jinping. Blaming America’s decline on China, and accusing allies of ripping the US off, Trump is determined to adopt his nationalist agenda. He has launched a campaign of “creative destruction,” undermining institutions such as the World Trade Organisation and NATO etc that the US had built up and upheld together with its allies.

Buoyed by robust growth since the 1980s, Xi “has radically recast the Chinese political system and put his stamp on economic and foreign policy.” His ambitious Made in China 2025 plan would help the country rise from a low-tech manufacturing economy to a global leader in cutting-edge technologies such as artificial intelligence (AI). This would involve “acquiring Western technology and knowhow, and then driving Western companies out of the Chinese market.”

China, meanwhile, is eager to show the world that its economic model of state capitalism is an alternative to the Western liberal capitalism. The US sees the danger of letting China’s model prevail and wants to defend its core values. China’s process of pro-market and liberal changes, started by Deng Xiaoping in the late 1970s, stagnated and in some cases went backwards. Interest groups within China, which benefited enormoulsy under the state-led model, resisted economic liberalisation and political reforms, and this also translated into a more assertive Chinese foreign policy.

With both leaders pursuing “an agenda of national rejuvenation,” this would no doubt lead to confrontation. Many fear China and the US may find themselves in the Thucydides’s Trap, a deadly pattern of structural stress that results when a rising power challenges a ruling one. Apart from competing for economic and technological hegemony, a military clash in the South China Sea could lead to a wider conflict, if the US seeks to defend the freedom of navigaton.

The author urges the EU to get its act together and wean itself off its reliance on China and the US. By defending its neutrality in the new Cold War between the two economic superpowers, and its sovereignty can the EU “become a coequal power in a tripolar world, rather than merely a pawn in a game played by Trump and Xi.”