Abstract
In the context of the American decline, President Trump’s trade war toward a rising China fits into the pattern of a declining hegemon, as predicted by hegemonic stability theory. Trump’s trade policy is driven by his view of trade as a zero-sum game, his fixation on the trade deficit, and his “maximum pressure” negotiation approach. The result - the “phase one” deal - seems to be a trade ceasefire rather than a lasting trade peace between the declining hegemon and its ascending challenger because it stands on a shaky foundation. This “phase one” deal does not address the structural problems in the US-Sino trade relation. Moreover, its goals are unrealistic, and it is built upon a dispute settlement that favors deal determination over rule-based conflict resolution.
Highlights
The Trump administration blocked the appointment of judges to the panel that hears appeals in trade disputes and thereby crippled the dispute settlement of the World Trade Organization (WTO)
We closely examine Trump’s trade war and the resulting “phase one” deal to determine whether the US trade policy under President Trump can be regarded as a manifestation of the prediction of hegemonic stability theory
In contrast to previous presidents, Trump rejects the self-image of the United States as a benevolent hegemon that is willing to maintain the liberal world order while other countries are free riding
Summary
In June, the conflict intensified when the Trump administration raised a 25 percent US tariff on Chinese imports worth $34 billion due to unfair trade practices, such as intellectual property theft. President Trump quickly answered by threatening to impose additional tariffs on imports worth $300 billion, which China planned to retaliate against. Because we do not focus on systematic changes in world trade policy, the analysis should not be misunderstood as a strict empirical test of this theory but rather as a theoretically guided interpretation of the US–Sino trade war It is supplemented by a critical reflection to disclose the flaws and risks of Trump’s understanding of trade, his aggressive negotiation approach, and the bargaining results. Whether the Trump administration’s actions can really be traced back to systematic changes or solely to its worldview, which reproduces previous ideas about the behavior of a declining hegemon, is not answered
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