America vs. Russia and China: Welcome to Cold War II

A serviceman carries a air-to-ground missile next to Sukhoi Su-25 jet fighters during a drill

The Second Cold War is a rematch among the same teams.

May-June 2018

“That’s why we have to make sure the United States—and not countries like China—is the one writing this century’s rules for the world’s economy. . . . Right now, China wants to write the rules for commerce in Asia. If it succeeds, our competitors would be free to ignore basic environmental and labor standards, giving them an unfair advantage over American workers. We can’t let that happen. We should write the rules.”

In its attempt to defend the TPP from populist and progressive criticism, the Obama administration mobilized national-security officials and foreign-policy figures to argue that the agreement was an essential part of a comprehensive anti-Chinese alliance system led by the United States. In January 2017, for example, Republican senator John McCain denounced Trump’s decision to withdraw the United States from the TPP on geopolitical grounds: “My concern is that we consign the Asia-Pacific region to China.”

The Trump administration has scuttled the TPP, while the TTIP is dormant because of domestic opposition in Europe and the United States. In “The President’s 2017 Trade Policy Agenda,” the Trump administration repudiated the preference for multilateralism of its predecessors since the end of the Cold War for an “America First” approach to trade:

“For more than 20 years, the United States government has been committed to trade policies that emphasized multilateral and other agreements designed to promote incremental change in foreign trade practices, as well as deference to international dispute settlement mechanisms. . . . [As a result] we find that in too many instances, Americans have been put at an unfair disadvantage in global markets. Under these circumstances, it is time for a new trade policy that defends American sovereignty, enforces U.S. trade laws, uses American leverage to open markets abroad, and negotiates new trade agreements that are fairer and more effective.”

Critics of the Trump administration frequently portray his economic nationalism as a catastrophic reversion to mercantilism, which could produce an uncontrollable spiral into trade conflict and world war. This is overblown. It neglects the fact that the preference of Trump and his advisors for bilateral agreements shares the same objective as Obama’s more multilateral approach: stopping further losses of the United States’ domestic and global market share to state-backed Chinese firms.

As part of its economic strategy toward China, the Trump administration is resisting the classification of China as a “market economy” instead of a “non-market economy,” a helpful status which China claims as its right under the terms of its accession to the WTO in 2001. Alarmed by China’s “Made in China 2025” blueprint for acquiring foreign technologies for the benefit of Chinese, both Republicans and Democrats in Congress are considering expanding the supervision of Chinese investments by the Committee on Foreign Investments in the United States, which reviews the national-security implications of mergers and acquisitions involving foreign actors.

Economic sanctions are another instrument of great-power rivalry in the era of Cold War II. In the case of Russia, U.S. sanctions policy focuses on pressuring Russian and foreign individuals and firms to punish the Russian government for its policies in Crimea and Ukraine. The Office of Foreign Assets Control of the U.S. Department of the Treasury supervises sanctions that target the Russian financial, energy and defense sectors, among others. Trump’s desire for better relations with Russia and Russo-American collaboration against ISIS and other shared threats has been thwarted by the stiffer anti-Russian sanctions that Congress enacted in the summer of 2017.

IN COLD War II, Marxism-Leninism’s nature as a militant faith added an ideological dimension to the geopolitical struggle that had been missing from the world wars, which had been characterized by strange-bedfellow alliances like the alliance of Soviet communists with the American and British capitalists, and of white supremacist German National Socialists with Japanese imperialists. During the first Cold War, Western democracies were divided among anticommunists, procommunists and anti-anticommunists.

Some claim that Cold War II involves global ideological struggle pitting liberal democracy against a new authoritarianism, symbolized by Vladimir Putin and Xi Jinping—and Donald Trump. In one version of this argument, there is also a rivalry in the economic sphere between liberal capitalism, which is alleged to support a “rules-based liberal global order,” and nefarious state capitalism or economic nationalism of various kinds. A new “Beijing consensus” of authoritarian state capitalism is supposed to menace political and economic liberty simultaneously.

This is unpersuasive. American allies include Egypt, a military dictatorship, and Saudi Arabia, a despotic monarchy. Putin’s strongman politics has more in common with that of Erdoğan in Turkey, a NATO ally, than with the rule of Communist Party “princelings” like Xi in China. Ironically, in their privileged backgrounds and technocratic approach to policy, the closest American parallels to the nepotistic princelings of the Chinese establishment are dynasties like the Clintons and the Bushes, not the populist outsider Donald Trump.