Minxin Pei says, although the current trade standoff between China and the US is dubbed the „new cold war“, it is fundamentally different from the Cold War between the US and the Soviet Union. We know the heavy cost the old Cold War inflicted on the US: Its expenditures for nuclear arms and weapons-related programmes between 1940 and 1996 consumed nearly $5.5 trillion in adjusted 1996 dollars. That was 29% of all military spending and 11% of all Federal Government spending.

The author says the “new cold war” is the ongoing state of political and economic tensions between China and the US, involving the world’s two largest economies, “that are closely integrated both with each other and with the rest of the world.” And the “most decisive battles” in this Sino-American rivalry “will thus be fought on the economic front (trade, technology, and investment), rather than in, say, the South China Sea or the Taiwan Strait.”

In this new era of Cold War-like confrontation with China, the US would need to win “not through ideology or even weaponry, but through economic pressure, and the winning strategy will not be one that weaponizes only America’s greed. In this sense, by nickel-and-diming its allies, the US is effectively disarming itself.” Even if the US succeeded in isolating China economically, the “victory will not come cheap.” Apart from shouldering its own costs, the US would have “ to compensate its allies for the losses they incur.”

Given Trump’ treachery against America’s oldest and staunchest allies, some of them are reluctant to side with his administration, knowing they might not be rewarded or compensated for it. Playing a zero-sum game, the US might consider severing “its commercial ties with China, if it were “to win this cold war.” And it would need to “persuade its allies to do the same.” There is the danger that this conflict could divide the world into two camps, and force the international community to chose one side or the other.

The US had recently called for keeping Huawei out of America’s potentially lucrative 5G telecoms market, even though doing so could cost US companies billions of dollars. So far, “only Australia and New Zealand have complied with the US demand to ban Huawei.” While Canada has not yet made a decision, European countries have “defied” the US. South Korea and India have “similarly resisted US pressure to exclude Huawei,” leaving the administration out in the cold.

Trump had in the past “displayed an utter lack of concern for its allies’ economic interests” by imposing tariffs on steel and aluminium imports. Now he might hurt them more by targeting European and Japanese cars. He had even gone further by demanding allies to pay the full cost of stationing American troops on their territory, plus 50 percent more. Acting secretary of defence, Pat Shanahan said yesterday that the Pentagon will not ask ally nations to follow Trump’s formula of “cost plus 50.”

Although Trump’s tough stance towards China receives wide support, critics fear he might be cowed into submission, when it comes to securing “short-term wins.” He could declare victory should China promise “to purchase large quantities of American soybeans and energy products,” while ignoring “the systematic changes” that Beijing needs to oversee to improve its unfair trade practices. “Such opportunism makes US allies doubt America’s resolve in an economic confrontation with China, fueling fear that they will shoulder high short-term costs for nothing.”

America’s decades-old allies have come to the conclusion that loyalty is a one-way street for Trump. Apart from the “lack of vision” Trump has taken the US on a path of isolationism. On his watch the country has lost its “own economic leverage” and political influence on the world stage. He seems to have taken a page out of Putin’s playbook – as both leaders no longer can halt the gradual decline of their countries, they might as well seek to weaken the others, in order to make their countries appear strong.