The United States and China are locked in a Cold Peace

Tensions between the United States and China have risen substantially. The Trump tariffs remain firmly in place. Washington is searching for ways to limit the spread of Chinese technology companies while giving funds to U.S. firms. China is trying to curtail its vulnerability to the United States’ long reach. In this atmosphere, one might imagine that trade between the two countries has plummeted. In fact, it recently reached an all-time high.

Welcome to the strange new world we live in. China and the United States are becoming more adversarial toward one another in every way and yet they are both part of a global economy that is deeply interdependent and has a dynamic of its own. Tensions rise but so does trade. It’s not just with the United States. China and Australia have seen growing disputes, attacks and counterattacks. Last year, China publicly aired 14 grievances with Australia and warned it not to “make China the enemy.” And yet, Chinese purchases of Australian goods recently hit a record high.

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