China, United States, European Union. (Credits: Adobe Stock)
On January 20, Donald Trump officially returns to the White House. Even before taking back the reins of power, the American president-elect set the tone for his economic policy. For Christian Saint-Etienne, the strengthening of the trade conflict between the United States and China will cost Europe dearly.
The strategic conflict between China and the United States for world domination is imposing itself on Europe. The two countries are engaged in a competition between a dominant power in the international order that wants to remain so – the United States – and a rising power that wants to take its place – China. It's a classic conflict, from Athens and Sparta. Since the 15th century, sixteen conflicts of this type have been recorded, twelve of which ended in war and four in the renunciation of one of the two enemies. The United States is ready to do anything to remain dominant; China too, as Xi Jinping clearly expressed, to replace them.
The conflict between the two giants is divided into two complementary struggles: 1/ to be the dominant geostrategic and military power and 2/ to be the leader in the global IT revolution. Computing, as a science and technology, has been transforming the world for four decades, like steam at the end of the 18th century and electricity at the end of the 19th century. Digital refers to the applications of IT in its interactions with consumers. IT is the scientific, technical, industrial, energy and logistical mutation that makes the planet work.
If IT stops, everything stops! More banking, insurance, logistics and procurement. But also no more water, bread (the ovens are electric) or electricity, telecommunications or hospitals. Computing, which runs electrical systems, itself runs on electricity. The next global wars will begin with the destruction of electrical systems: Ukraine at power 100. The IT revolution is hyper-industrial and investing in the production of computers, microprocessors, robots and electricity is a question of survival .
A struggle for dominance
The trade war between China and the United States is part of this struggle for domination. Trump initiated the trade conflict in 2017 before gradually imposing average effective customs duties of 20% on Chinese imports at the end of 2019, a policy continued by Biden who particularly targeted Chinese imports of American technological products in order to curb the China's IT boom. Trump threatens another 60% increase in tariffs on China by taking the risk, which he mocks, of starting a massive global trade war. At this stage, it is a negotiating position of Trump which could evolve. But the conflict between these two powers will intensify and Europe will pay the price twice.
First, Trump will punish Europe with customs duties and quotas, particularly on automobiles, while forcing the European Union to import more American shale gas. Then, China will dump products on Europe that it will no longer be able to sell to the United States.
The problem is that the European Union, which has practiced international trade openness without real reciprocity of openness, notably from China, since the start of the IT industrial revolution in the 1980s, and which never imposes anti-dumping duties commensurate with the damage suffered by European producers despite more forceful declarations since the start of the 2020s, will find itself caught between a hard place and a hammer. The Union, whose member countries diverge on many strategic issues, is not going to experience a good Trump presidency.
