China and the US have just entered a new round of escalating their trade conflict with China's decision to impose trade tariff on US$75 billion of American goods and the US’s counterattack by raising duties already imposed on US$250 billion and soon on further US$300 billion of China's shipments to the US. The moves were taken just before the next round of bilateral trade talks already scheduled for next September in Washington. They did it in full awareness that escalating this conflict could complicate and hamper their trade talks and delay any related agreement they must and can reach.
Who will be able to endure the pain till the end?
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The question is, why?
The answer can only be that their bilateral dispute has already gone too far for them to go back, scale down their confrontation and make one of them the first to retreat without fearing to lose face and be considered as weak. Their dispute is not only bilateral between the US and China but has also become sensitive and complicated domestic affair in both the US and China, challenging the leadership in both countries.
The answer can only be that US President Donald Trump still believes that his strategy of "maximum pressures" would work everywhere in this world, especially in the case of trade dispute and strategic comprehensive competition with China. He knows very well that his trade conflict with China causes great damage and losses to America and the Americans; but greater are his pretensions that the US can force China to kneel and to comply with all US demands and then he would sell that result as a significant and great victory for America. In this way, all harm and losses would be forgiven.
China was pushed against the wall and has no other alternatives than to fight back with the same measures available to avert pressures from inside and prevent precedents, whatever they might cost.
This ongoing conflict posts the most dangerous uncertainty for the world economy and trade, the world politics and international relations. Both the US and China will finally pay high, very high prices for it and the longer their dispute last, the higher and more painful these prices will be for them. That is why the two will sooner than later start to deescalate and to solve their conflict. Until now, they all had proven more than once that they can very quick and abruptly reverse their decisions taken previously.
