That said, China’s economy has changed significantly in recent years, and these sorts of responses are more counterproductive than ever for them. The trade war has put those changes on display, as the Shanghai Stock Exchange has seen a 17-percent drop in three months while the yuan dropped 3.7 percent in June — its largest one-month loss ever.

As China has consciously begun the shift from an export-based economy to a finance capitalist economy the same monetary changes that used to benefit their productive sector now prompts capital flight from their securities to those priced in dollars. U.S. fiscal policy has also dramatically expanded debt, almost all of which has been bought by domestic holders, diluting China’s potential impact on bonds and interest rates.

The bottom line is that the present trade conflict or any other purely economic dispute with the United States is liable to be negotiated at the boardroom table and not on the battlefield.

That said, the trade pressures to pick sides should be concerning for the United States. The Trump-led attack on the Turkish economy is a case in point. Emerging markets like Turkey have had an awful year already, driven in large part by capital flight prompted by the tax reform billpassed by the GOP Congress and signed by Trump last year. New U.S. sanctions on top Turkish officials and tariffs on steel and aluminum prompted retaliatory Turkish action on U.S. autos, alcohol and tobacco.

The United States is now considering broad-based tariffs on all Turkish imports to the United States, sending the Turkish lira to all-time lows, down more than 25 percent for the year. Turkish-U.S. trade is relatively tiny — around $5 billion total, or less than a rounding error for Apple’s valuation, for one example — but the geopolitical implications are significant.

As Saudi Arabia and its Gulf allies freeze out Qatar, as Syrian leader Bashar Al Assad secures victory in his civil war, and as Iran is fully cast out of the U.S.-led order, a clear geographic bloc against the United States and its allies is consolidating.

This is why many U.S. security experts were so hostile to the idea of ending the Iran Nuclear Deal. No less than U.S. Army general Joseph Votel, the current commander of U.S. Central Command, has expressed his support for the Joint Comprehensive Plan of Action or JCPOA, as the Iran deal was formally called. Even U.S. Defense Secretary James Mattis and then-Secretary of State Rex Tillerson were warm to the deal. It integrated Iran into the global economy in return for their submission to weapons inspection.

Now their economy is facing devastating economic sanctions with the boldest diplomatic concessions they’ve ever clearly not enough for the United States. This is likely to benefit hardliners, which will only draw the anti-U.S. bloc together further.

This is happening just as China’s multi-trillion dollar Belt and Road Initiative is focusing on major investments in the Central Asian economies lying between their territory and this bloc. Just as trade disputes of yore helped harden the sides of the World Wars, the present policies are combining with other projects and pressures to create the conditions for a major dispute in the future. Whether this comes in years or generations, and whether it gets interrupted by more conciliatory arrangements remains to be seen.

U.S. trade policy has rested on the idea that maintaining the free flow of global capital–and therefore the unrestrained ability of the mega rich to get even richer–will help the elites of the world figure things out behind closed doors with no need for wars or democratic oversight. Since the Second World War most military conflicts have been about keeping poor countries that want to buck this system in their place.

Trump believes that this rigged game still isn’t paying out enough for the United States, however, and so he’s demanding new rules. These changes are unlikely to prompt wars in the short run, but the last time we had to square things away anew we had 30 years of war and 100 million dead. These are the first steps of the biggest shakeup since that time, and anybody who knows their history has to be concerned for the future.

The heir presumptive to the Austro-Hungarian Empire gets killed by a motley band of Serbian nationalists. A national dispute erupts over control of certain Czech border areas. Trade disputes can create the conditions for major wars, but nobody knows what will set them off. Trump’s policies are certainly doing the former, time will tell what shall do the latter.

This first appeared in WarIsBoring here.