In 2014, eminent political scientist Graham Allison wrote an influential book called “Destined for War: Can America and China Escape Thucydides’s Trap?”
The subtitle referred to a famous passage in Thucydides’s “History of the Peloponnesian War”:
“It was the riseof Athens, and the fear that this inspired in Sparta, that made warinevitable.”
Allison surveyed the history of the past 500 years and found 16 cases in which a major nation’s rise has disrupted the position of a dominant state. In 12 of those instances, the result was war.
And thatincludes two of the most horrific conflicts in history: World War I was caused in no small part by the rise of Imperial Germany, and WWII was caused by the rise of both Nazi Germany and Imperial Japan.
Allison sounded an alarm that another conflict was brewing because the rise of China was threatening US hegemony.
There was nothing inevitable about a U.S.-China conflict, he wrote in 2014, but the odds were that one would eventually erupt.
I’ve been thinking about Allison’s warning now that President Donald Trump has launched a trade war against China. (Allison told me on Friday that he has been “hearing the same echoes” of his own warning.)
Trump initially targeted the whole world with his so-called reciprocal tariffs (which were far higher than the tariffs other nations charge US exports), but after a bond market rout, he reduced tariff rates on most countries to a still-high 10 percent.
At the same time, Trump escalated tariffs against China - the third-largest U.S. trading partner - to an eye-popping 145 percent. Not backing down, Chinese leader Xi Jinping responded by imposing 125 percent tariffs on US goods.
Trump did slightly relax the tariffs on Friday night by exempting smartphones and other electronics from the highest rates.
But if the rest of the “reciprocal” tariffs remain in place, they will essentially block two-thirds of China’s exports to the United States, thereby making a recession likely.
That, in turn, would raise the risk of even more apocalyptic scenarios such as a global depression or even an actual war.
Allison emailed me that “the good news is that most tariff or economic wars don’t become hot wars.
The bad news is that some do. And if I compare the likelihoods of hot wars in cases in which there was no trade war to cases with a trade war, in the latter case the odds goup.”
Indeed, history is replete with examples of trade wars turning into shooting wars.
The Anglo-Dutch naval wars of the 17th and 18th centuries were theresult of commercial competition between Britain and the Netherlands.
The colonial competition for resources in the late 19th and early 20thcenturies helped lead to WWI.
The long road to Pearl Harbor began with the United States promulgating an “open door” policy that blocked Japanese designs on China by insisting that all nations should have equal access to its market.
When Japan began invading China in1931, the United States responded with economic sanctions, first targeting exports of scrap metal and aviation fuel to Japan, followed by raw materials such as iron, brass, copper and, finally, oil.
As Allison noted, it was the oil embargo, which threatened to strangle the Japanese economy, that led Japan to the desperate gambit of attacking the US fleet at Pearl Harbor.
This preemptive strike was designed to prevent the United States from interfering with Japan’s campaign of conquest in East Asia, including of the resource-rich Dutch East Indies and French Indochina.
In his book, Allison sketched out a scenario - “unlikely but not impossible” - for how a trade conflict between the United States and China could end in a nuclear war. It begins with a president determined to stop China from overtaking the United States economically. His grievances include “Chinese cheating on trade agreements, currency, intellectual property, industrial subsidies, and artificially cheap drug exports.”
To level the playing field, this president labels China a currency manipulator and threatens tariffs of up to 50 percent.
China responds by blocking some US exports to China, interfering with the operations of U.S. factories in China, and selling some of the $1 trillion in US Treasurys that it holds.
The American president escalates by demanding repayment of $1.23 trillion for US intellectual property stolen by China.
As the conflict escalates, China activates malware that leads to US stock market crashes and wipes out millions of accounts in US banks. To prevent any more damage, the American president dispatches a stealthy drone to attack the headquarters of PLA Unit 61398, China’s version of the National Security Agency. But China detects the attack and retaliates by launching missiles at the US air base in Japan that launched the drone.
It’s easy to dismiss this fictional scenario as far-fetched, but, until the past week, it was also pretty far-fetched to imagine a US president imposing 145 percent tariffs on China.
(In Allison’s worst-case scenario, the tariffs are “only” 50 percent.)
And China’s ability to carry out cyberattacks is very real: The Wall Street Journal reports that a Chinese official in December implicitly acknowledged to US counterparts that Beijing had been behind intrusions into computer networks at “US ports, water utilities, airports and other targets” in retaliation for “increasing U.S. policy support for Taiwan.”
What might China do now in response to US tariffs that threaten its economic well-being?
China has every incentive to expand its range of responses beyond raising its own tariffs because it imports far fewer goods from the United States than the United States imports from China.
This is an unprecedented crisis, and it is impossible to predict how it will play out, but it’s important to remember how tragic miscalculations have led to war before.
None of the combatants in WWI wanted to fight a long and costly war, but they nevertheless “sleepwalked” (as one historian termed it) into one in August 1914.
By Christmas of that year, the Western Front had become a stalemate.
Rational actors on both sides should have ended the carnage rather than allowing it to continue for four more years. But by that point, both sides had suffered such heavy losses that backing down was unthinkable.
As in so many conflicts, grievances accumulate, national honour is aroused, and a war lasts farlonger and exacts a far greater toll than anyone wanted or anticipated.
Even if the US-China trade conflict stays cold, a similar dynamic is likely to prevail - the more economic losses the two sides suffer, the less likely they will be to back down.
Both Washington and Beijing will probably feel compelled to keep going until they can claim some kind of “victory,” and the costlier the conflict, the greater the compensation that will be demanded as part of any settlement.
What is needed now is heroic self-restraint of the kind exercised by President John F Kennedy and Soviet leader Nikita Khrushchev during the 1962 Cuban missile crisis.
Kennedy, in particular, was acutely aware of the risks of an accidental war after having just read Barbara Tuchman’s “The Guns of August” about the outbreak of WWI.
He engineered a secret deal that would have the Soviet Union remove its nuclear missiles from Cuba in return for a promise to remove obsolete US Jupiter missiles from Turkey.
WWIII was averted. Today, we are in desperate need of a similar face-saving deal between Trump and Xi (perhaps similar to the one they reached during Trump’s first term) before the trade war between the two largest economies escalates and does irreparable harm to the entire world. Both leaders are proud men who cannot be seen to surrender - but both have an interest in ending this unnecessary conflict before it’s too late.
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