Maximum Pressure, Minimum Deal: President Trump’s Trade War with a Rising China*

Abstract

In the context of the American decline, President Trump’s trade war toward a rising China fits into the pattern of a declining hegemon, as predicted by hegemonic stability theory. Trump’s trade policy is driven by his view of trade as a zero-sum game, his fixation on the trade deficit, and his “maximum pressure” negotiation approach. The result - the “phase one” deal - seems to be a trade ceasefire rather than a lasting trade peace between the declining hegemon and its ascending challenger because it stands on a shaky foundation. This “phase one” deal does not address the structural problems in the US-Sino trade relation. Moreover, its goals are unrealistic, and it is built upon a dispute settlement that favors deal determination over rule-based conflict resolution.