The Second Cold War
The Fine Line
Here we go again. Another standoff between two world superpowers that will define the geopolitical world for years to come. Except, this time, it will be different.
During the first Cold War, most of the worry was about the possibility of nuclear warfare between the US and the Soviet Union. The two superpowers despised each other and the threat indeed was very real. However, the two nations had little to do with each other economically and were not very intertwined in that area. But when it comes to the US and China, things are very different.
The US and China practically rely on each other's economies. The two are each other's biggest trading partners and any disturbance in relations or trade between the two tends to have a huge impact on world markets. For example, during the US-China trade war, prices on many consumer products increased due to higher tariffs on imports. This caused a knock-on effect which affected many global companies such as Apple (who rely on China for manufacturing) who had to increase the price of their electronics, much to the dismay of its customers.
However. Many also have the same concerns as some did during the first Cold War when it comes to the possibility of military conflict. The US and China have been increasingly at odds with one another in places such as the South China Sea. You see, China claims that they own the area whilst the US sees this claim as false and says that China threatens US interests in the area. This is where it gets concerning. One misstep/miscalculation could lead to a full-blown military conflict between the two superpowers. The two are walking a very fine line between partnership and competitorship.
The Issue of Taiwan
Taiwan, in all likelihood, will be the flashpoint between the US and China...
With China increasingly threatening to take Taiwan by force, the US has come to Taiwan's defense by re-affirming its commitment to protecting Taiwan from an invasion from China.
You see, in the aftermath of the Chinese Civil War, the democratic government fled to Taiwan where it has formed its own democratic nation. But the problem is that China claims Taiwan to still be apart of China and wishes to "reunify" the island with the mainland. The US hopes by re-affirming its defense of Taiwan that China may be dissuaded from invading the small island. But, this is unlikely. China's desire to "reunify" Taiwan is rooted in a deep, ideological belief in the "One-China" policy.
Therefore, in all likelihood, China will eventually attempt to take the island by force if some type of agreement is not reached. This would almost certainly result in a military conflict between the US and China. Which is why it is important that Taipei and Beijing agree to compromise and work towards an agreement
Who is to blame for the current tensions between the US and China?
Whilst US-China relations were bad before the pandemic, the coronavirus certainly made them even worse. China faces accusations from the US that it had not done enough to contain the virus at the source. The US has also questioned whether or not China was too slow to warn the world of the virus. Trump has made China an important part of his campaign and has repeatedly blamed China for the US' coronavirus situation in an attempt to deflect from his own failings on containing the virus within his own country.
With the US and China being so economically reliant on one another, the outcome of this standoff is likely to be one of economic catastrophe.
China and the US will most likely continue to decouple economically and this will spell disaster for the global economy. Consumers will face higher prices and therefore consumer spending will suffer. Aside from that, we have seen what happens when the US becomes too economically isolationist before... and the world felt the effects well beyond its economies.
So, here we go, once again threatened with the possibility of mushroom clouds forming around the globe. But the economic threat is much more certain than war.
Talk about a double whammy!