The struggle between the United States and China is not a new Cold War. The two countries are geopolitical competitors, enmeshed in a zero-sum contest for influence globally, and especially in the Pacific region. Economically, however, they remain cooperators, via their complex and contested trade relationship, which neither nation is in a position to abandon, despite ambivalence and reluctance on both sides. The trade relationship does not have the features of a zero-sum game. Although it entails gains and losses for each side, depending on how it is structured, trade is by definition a realm of potential positive sum interaction: If the trade weren’t beneficial to both sides, one or both would give it up.

There is, therefore, basic structural dissimilarity between this global moment and the Cold War, in which the West and the Soviet bloc competed geopolitically, and for the most part refused to trade with each other on a meaningful scale. The simultaneous presence of a zero-sum geopolitical contest and a positive-sum trade arrangement is what makes the United States-China relationship something new: a Cool War, not a cold one.

The Cool War has undergone two important developments since I first described it in 2013 in a book called—you guessed it—Cool War. Development in the direction of greater conflict was highly predictable—and indeed predicted. The most predictable part of the change was the emergence of an American leader who ran for office on a nationalist, anti-China agenda, alongside the inevitable nationalist response from the Chinese. In this sense, Donald Trump’s China rhetoric and policies, which deviate importantly from those of his predecessors, can be understood as steps in the gradual ramping up of the Cool War. A less predictable—at least in my view—development was Xi Jinping’s self-conscious pullback from the model of generational leadership turnover that the Chinese Communist Party had pioneered since Deng Xiaoping stepped down from the political stage in 1990. Xi’s emergence as a dictator, complete with his own cult of personality, is mostly explicable as a reaction to the problem of pervasive corruption among the senior ranks of the party. But it can also be seen as a consequence of the Cool War imperative to take bold regional steps in opposition to the United States’s efforts at containing China.

The current state of play in the Cool War—and its future trajectory—can best be analyzed by breaking the conflict into three interwoven spheres: geopolitics, trade, and cyber conflict. The first two are genuine policy domains, while the third is, properly speaking, just a set of tools used by the parties to affect the two other spheres. The reason for treating cyber conflict separately is thus not conceptual but practical. It is sufficiently new as a form of military-economic warfare that it benefits from being understood on its own terms as a distinctive set of practices that differ from the familiar missiles and tariffs that I will be discussing in the contexts of geopolitics and trade.

In what follows I will offer two distinct, interrelated arguments. First, during the late Obama and early Trump administrations, China made important gains in its geopolitical struggle for hegemony against the United States. Those gains are now driving an American reaction, including the U.S. withdrawal from the Intermediate Range Nuclear Forces Treaty (INF) with Russia, which is aimed at countering the Chinese missile threat.

Second, the rise of populist economic nationalism, not only in the United States but also in Europe, has weakened China by driving a politics of protectionism. That, in turn, has led to a reconsideration of the liberal international trade regime that drove China’s spectacular export-led growth in the first place.

Geopolitics

The structure of the geopolitical conflict between the United States and China derives from the classic model of zero-sum competition between, on the one hand, a status-quo power that enjoys medium- or long-term advantages, and, on the other, a revisionist power that is rising and seeking influence commensurate to its newfound stature. Accepting that this is the nature of the conflict doesn’t require believing that the United States will insist on being the world’s sole global superpower, or even believing that China wants to be a superpower on par with, or superior to, the United States. It is enough to understand and accept that the United States enjoys a web of global power relations, particularly in the Pacific region, that it would prefer not to lose or substantially readjust; and at the same time that China has a strong national interest in not being contained or controlled by the United States. These conditions suffice to produce a structural conflict in which any gains for China in its regional power position are corresponding losses for the United States, and that any power losses for the United States, not only in the Pacific but more broadly around the globe, are gains for China.

A fair amount of attention has been devoted to the question of whether there is some law of history according to which there must eventually be a military conflict between a status quo power and a revisionist one—the view that Graham Allison memorably nicknamed the “Thucydides trap.” The truth is that inevitability (or its opposite) is essentially an academic-theoretical question, albeit one of interest to politicians. The practical question for United States-China geopolitical relations is much simpler: Can either side accommodate itself to the geopolitical vision of the other? And if not, how will the conflict proceed?

Consider Britain, which accommodated itself to the rise of the United States to global power status, even as it fought two world wars against Germany’s rise to the same status. With only mild reluctance, Britain was able to accept the American rise. By the time the United States had supplanted the UK definitively, it would have been pointless for the British to resist. If the United States today looked at China the way British foreign policy elites looked at the United States from the late nineteenth century until the middle of the twentieth, major geopolitical conflict between the United States and China could arguably have been avoided.

The point, however, is that almost no member of the American foreign policy elite today thinks that China shares the United States’s political values, the way the British once thought of the Americans. Nor do many Americans believe that China’s regional geopolitical rise in the Pacific might actually benefit the United States, as some British observers like Rudyard Kipling thought about America’s rise in the very same region a century and a quarter ago. The United States, therefore, cannot accommodate itself to a vision in which China replaces it at the center of the hub-and-spoke security relationship our country currently enjoys with its Pacific allies.

Similarly, the Chinese political elite currently in power seems not to believe that China can comfortably allow the United States to continue to pursue its policy of regional geopolitical domination or even containment. At one time, it would arguably have been rational for Chinese policy intellectuals to maintain that China’s interests would best be served by continuing economic growth under a global and regional security umbrella provided by the United States. So long as the United States pursued a liberal trade agenda, that argument had the benefit of allowing China to free-ride on the expensive undertaking by Americans of providing a safe global environment for trade.

But China’s national pride would always have run in the other direction. A onetime major power that has been repeatedly humiliated and repressed is likely to seek significant freedom of movement once its economic growth makes that geopolitical option available. Today, in the wake of growing American protectionism, that national pride can now be supplemented by concerns that the United States might try to exploit its geopolitical power to achieve economic advantages over China.

Given the reality of conflict, China has, in recent years, noted a series of geopolitical successes—even as the United States has ceded ground through a series of defeats, many of them self-inflicted. China’s successes can be measured primarily in three ways: through its military growth, through its extension of political influence by means of infrastructure projects in strategic regional locations, and finally through its efforts to establish suzerainty over the South China Sea by aggressively asserting rights to disputed minor islands. One way to understand all of these Chinese successes is to ask whether any would have been thinkable before, say, the Administration of George W. Bush. In each case, the answer is a definitive no. All would have been viewed by the United States as unacceptable breaches of a regional power structure dominated and underwritten by the United States.

Consider each of these successes in turn. First, China’s military capacity has been growing at a genuinely extraordinary rate. Reported growth has hovered around 10 percent for well over a decade, and it is possible that the real figure is substantially higher. China has a home-built aircraft carrier, launched in April 2017, and several more on the way. Alongside its existing nuclear and ICBM missile capability, China has been developing the next generation of missiles, including very long-range missiles designed to reach aircraft not within the immediate sphere of battle, and to target planes and ships used for radar and refueling. Significantly, these medium-range missiles are of a type that the United States has been banned from deploying under the INF, a treaty China never signed.

Second, the Belt and Road Initiative (BRI) marks the first steps of another big Chinese geopolitical success. It aims to transform China’s relationship with some 65 countries through major—and to the countries in question, much needed—infrastructure investments that typically include grants, loans, and Chinese firms doing substantial parts of the building work. Such projects carry risk in the form of backlash from recipient countries that may come to be saddled with debt that they cannot pay back. Yet at the most basic level, the initiative as a whole has begun to function. It is already shifting China’s role in the Pacific, Central Asia, and beyond.

The BRI establishes China as much more than a large trade partner for surrounding countries. The initiative instead makes China a senior, potentially dominant geopolitical partner for any country that chooses to engage. That all this is accomplished without major financial risk to China, and without troops or military bases, makes it an even more impressive instantiation of geopolitical advancement. It would be inconceivable for the United States at this stage of its history to undertake such an initiative, for both political and economic reasons; and equally inconceivable that any such initiative by the United States would be welcomed by recipient nations.

Finally, China’s third important geopolitical advance comes in the form of its de facto victory in the South China Sea, accomplished by building artificial islands in the disputed Spratly chain. Although not formally recognized by other states, the new outposts give China the credible capacity to claim territorial control and ownership of sea and air routes. Alongside the territorial expansion have come increasingly aggressive naval and aerial threats to foreign—especially American—vessels and aircraft. This is geopolitical-territorial expansion at its most basic. Five years ago it seemed like a bold, if risky, endeavor. Today it looks like a fait accompli.

The United States has signally failed to stop any of these Chinese advances. In the wake of the U.S. withdrawal from Iraq and the drawdown from Afghanistan, Barack Obama announced a “pivot” to Asia that was intended to signal a will to limit China’s expansion. But the pivot turned out to be largely symbolic, as Obama showed no inclination to adopt an explicit containment strategy.

Donald Trump came into office downplaying any concern about China’s geopolitical rise; instead, he focused on the United States-China trade imbalance. This seemed at first to represent a double reversal of prior U.S. policy. Not only did Trump back away from the liberal view of trade espoused by Obama and Bush, he also seemed prepared to concede geopolitical influence based on the neo-isolationist notion that U.S. allies should “pay for” more of their defense relationship with the United States. As a consequence, Japan and South Korea, traditional U.S. defense allies, both began to explore strategies for self-protection in an environment of reduced U.S. protection. (For Japan, this meant greater military capacity and a potential constitutional change to allow the aggressive use of force; for South Korea, it meant improved relations with China via an opening to North Korea.)

As Trump’s foreign policy has evolved, hawkish figures like John Bolton, Trump’s national security advisor, and Secretary of State Mike Pompeo have shifted the China strategy. The centerpiece is now the imminent U.S. withdrawal from the INF—a move directed much more at China than at Russia, the actual treaty partner. Specifically, withdrawing from the treaty enables the United States to counteract China’s increasing development of short and intermediate range conventional missiles—missiles whose deployment would massively disadvantage the United States in an air war with China.

The INF withdrawal is classic geopolitical counter-strategy—a recognition that China cannot be allowed to develop a military advantage to which American forces would be vulnerable. It signals that, so long as Bolton and Pompeo hold sway, the United States will adopt a geopolitically tougher stance on China than it has at any time since the end of the Cold War.

This reactive mode could also be read to indicate that China’s geopolitical gains may have pushed too far, too fast. China’s optimal strategy, pursued for decades, has been to advance geopolitically just far enough that the United States would not respond by treating China as a military threat. The INF withdrawal, however, suggests that China has now reached and exceeded that point. Going forward, the United States is likely to scrutinize Chinese moves much more closely—and be more prepared to respond.

Trade

The subject of United States-China trade relations is enormously complex and contested. From 60,000 feet, however, the crisis set off by the election of Donald Trump, complete with huge tariffs and reciprocal threats of mutually self-destructive trade wars, can be understood as follows.

China’s 30-plus year period of enormous, unprecedented, trade-driven economic growth corresponded to what already seems like a golden era of liberal international trade. More than two-thirds of this extraordinary period came in the post-Cold War age, when the United States’s global hegemony delivered a mostly peaceful global environment. (The great exceptions being the contained wars in the former Yugoslavia, Afghanistan, and Iraq—none of which hampered international trade.)

The liberal trade regime had not been designed with China in mind, and it did not always fit China’s preferences, as my colleague Mark Wu has shown. At the margins of the trade regime, China sought to gain what advantages it could; and China may have been planning eventually to demand systematic changes in its favor. Nevertheless, in the main, China willingly participated in the trade regime’s governing institutions, most prominently the World Trade Organization. The reason isn’t hard to see: Liberal trade was the necessary avenue for China’s immense growth.

But before China could mount a challenge to the rules of the liberal regime, a wave of populist protectionism swept the United States and Europe—the wave that brought the Brexit referendum to the UK, and Donald Trump’s presidency (not to mention Bernie Sanders’s candidacy) to the United States. Historians will be debating the causes of this populist wave for generations to come. In both the United States and UK, the moment corresponded to a sustained period of economic recovery from the 2008 recession. The decline of United States manufacturing, and of the relatively well-paid middle-class jobs that went with it, had already been going on since the 1970s, and had not faced any special inflection point. The populist wave’s anti-immigrant aspects might arguably have been fueled in Europe by the millions of refugees fleeing the Syrian civil war. But this disaster did not touch the United States, except symbolically.

It may be that the best explanation for the timing of the wave is simply that center-left and center-right parties in the United States and Europe had, for a generation, both shared a common commitment to liberal trade. The result may have been an artificial consensus, where left and right populists failed to have their voices heard within their respective parties. Once the party structure began to give way, however—via a referendum in the UK and the breakdown of the old Republican establishment in the United States—protectionist views that had always been latent in the population were able to emerge.

Regardless of the causes for this timing, Trump’s populist protectionism could have only one main target—namely China. It became convenient to blame China for the decline in United States manufacturing. The emergence of a new Chinese middle class could be described as a transfer of that middle class from the United States, even though these two processes took place at a significant historical distance from each other. In this simplified view, the great wealth disparities created in the United States by the outsized growth of the technology and finance sectors in the years of the information revolution could be, as it were, blamed on outsourcing to China, instead of being understood as symptoms of internal United States dynamics of class and wealth.

It now seems extremely unlikely that the United States will see a return to the public advocacy of international trade for at least the next decade. The liberal trade orthodoxy of every presidency since Ronald Reagan’s now seems politically discredited. Whether or not liberal trade is actually responsible for the decline of the American middle class and the growth of wealth disparity (not precisely the same thing) no longer particularly matters. The causal explanation has become political common sense. It is unlikely to be abandoned for some time, both because it seems to prescribe a solution—namely protectionism—and because it manages not to blame domestic United States institutions or structural economic forces associated with information-driven wealth.

All this is potentially a serious problem for China. On its own, China has realized for well over a decade that it needed to move away from export-driven growth as its improving economy raised production costs. But that process is much easier to manage if it can proceed on China’s own internal timing—and if it can be delayed by the continued development of cheaper labor in different geographical areas of China.

In contrast, massive tariffs would represent a major exogenous shock to China’s economic well-being. As of this writing, Trump and Xi still have the capacity to negotiate a deal that would avoid an all-out trade war. And it seems more likely than not that Trump will step back from the brink, especially if United States markets were to weaken substantially because of the threat. Regardless of a deal, however, China is now on notice that it will not be able to rely on a continuation of the liberal trade order that existed during the period of its rapid rise. This could be described as a consequence of China’s success; but it could also simply represent the internal political dynamics of the United States and Europe at this fragile moment in their histories.

Geopolitics and Trade Interact

Until now, the geopolitical and trade spheres of the United States-China relationship have proceeded on mostly separate tracks. Indeed, their orthogonal character is much of what has made the struggle a Cool War, not a cold one. But there are signs that the two tracks may begin to converge. Consider cyberwarfare, a tool that properly speaking cuts across both domains.

For years, China has effectively used cyberattacks on American intellectual property targets as an effective asymmetrical tool. Stealing secrets from U.S. firms both weakens the United States in trade and also potentially threatens American national security. It creates asymmetry in both spaces. Economically, the United States is hampered by its traditional refusal to share stolen foreign corporate secrets with private U.S. firms, a constraint that is irrelevant to China, with its plethora of state-owned enterprises. From a military perspective, cyberwarfare narrows the still massive conventional weapons gap between the United States and China, because the United States does not want to retaliate conventionally, and the cyber gap is far smaller.

The Obama Administration took this issue seriously enough to expend resources to negotiate an agreement with China in order to limit cyberattacks. Yet as United States-China trade tensions grew in the early Trump Administration, the attacks were resumed—and the United States has had no effective tool to retaliate. Appreciating the weakness of its position, the United States is now seeking asymmetric new tools for its response. One salient example is the arrest, in December 2018, of Meng Wanzhou, the CEO of Huawei and daughter of its founder. This personalization/criminalization approach breaks the usual bounds of trade negotiation norms and tends in the direction of the spy arrests and exchanges familiar from the domain of espionage, a classic geopolitical game.

The pattern of attack and counterattack is emblematic of an increased risk of spiraling conflict that in certain ways crosses the traditionally divided domains of shooting wars and trade wars. This increased risk in turn reflects the heightened tensions associated with the populist-protectionist turn in United States policy.

It is therefore fair to say that the Cool War has entered a period of relative turmoil, in which the rules of the game are being renegotiated and reconsidered by both sides. In retrospect, the Obama-era stage of the Cool War featured much greater continuity with both the United States and Chinese policies of the previous decade. The United States’s commitment to liberal international trade, and China’s cautious, consensus-driven foreign policy helped manage the United States-China relationship.

Both of those predictable regularities are now gone, very probably not to return in the foreseeable future. Bottom-up populist protectionism in the United States and leader-driven nationalism in China threaten to make the Cool War much cooler than it has been. The historical story of the United States-China struggle has reached the end of the beginning.