COVID-19 fuelling US-China rivalry

The COVID-19 pandemic has simply rearmed the view of risk analysts at Verisk Maplecroft that US-China tensions are likely to continue their steady increase as strategic competition between the world’s two superpowers mounts.

The coronavirus is currently the major friction point in bilateral relations, but there are a host of economic, strategic and security issues that will rise up the agenda once the pandemic is eventually contained.

In an update from Hugo Brennan, principal Asia analyst, he says the fact that the world’s two largest economies have so far proved unable to cooperate effectively, and have instead engaged in widespread nger-pointing, provides an indication of just how far the bilateral relationship has deteriorated since the Global Financial Crisis – arguably the last major global emergency on this scale.

In January the two sides only agreed to a temporary ceasere on trade rather than a lasting peace deal. The Trump administration has denied that it is considering cutting tariffs on imports from China in order to ease pressure on US consumers, as it would send the wrong signal to Beijing.

President Trump’s recent comment that China’s purchases of US goods were “a little on the light side, and I’m being nice when I say that” also suggests that he still expects Beijing to full the commitments it gave as part of the Phase One trade deal, despite the adverse effect that COVID-19 continues to have on China’s economy.

It looks increasingly likely that China will fall short of these ambitious targets, which means that the Phase One trade deal and associated rollback of some tariffs is by no means secure.