Thomas L. Friedman’s column – The US-China ‘supply chain’ war will hurt everyone | Thomas L. Friedman’s Column: US-China supply chain war will harm everyone

Thomas L. Friedman is a three-time Pulitzer Prize winner and columnist for The New York Times.

When Donald Trump invited Xi Jinping to Washington for his inauguration this month, many raised eyebrows. Of course, foreign leaders don’t traditionally attend US presidential inaugurations, but I think Trump’s idea was really good. I have recently returned from a trip to China and if I had to picture the relationship between these two countries today, I would picture it as two elephants looking at each other through a straw.

The US and China have other things to talk about besides trade and Taiwan, the most prominent of which is who is the undisputed heavyweight champion of the 21st century. The three biggest challenges facing the world today are: uncontrolled AI, climate change and the chaos spreading from failed states.

America and China are the world’s AI superpowers. They are also the world’s two largest carbon emitters. And they have the world’s largest navies, capable of projecting power on a global scale. In other words, America and China are undisputedly the two biggest powers in the world today.

This is why we need an updated Shanghai Agreement. This is the document that was prepared to normalize US-China relations after Richard Nixon’s visit to China and meeting with Mao Zedong in 1972. But today we are more focused on spoiling our relations with China.

I spent a week in Beijing and Shanghai, meeting Chinese officials, economists and entrepreneurs, and the reality is that while we were fast asleep, China has made a giant leap forward in high-tech manufacturing of everything .

If anyone hasn’t told Donald Trump yet, let me point out that his nickname on Chinese social media is ‘Chuan Jianguo’ – which means Creator of the Chinese Nation. Because, during his first term as president he fearlessly criticized China and bombarded it with tariffs, which prompted Beijing to step up its efforts to achieve global dominance in electric cars, robots and scarce materials. Double it. At the same time, it should become as independent as possible from America’s markets and equipment.

Jim McGregor, a business consultant who lived in China for 30 years, told me that China had its ‘Sputnik moment’ – his name was Donald Trump. Trump made China aware of the fact that it needs to work with all hands to take its scientists and manufacturing skills to new levels.

The China that Trump will face after assuming his second term is an unbeatable export-engine. Her manufacturing strength has multiplied in the last eight years, while consumption by her people is still very low.

China’s export-machine is so strong today that only very high tariffs can slow it down. And by responding with much higher tariffs, China could begin to deprive American industries of critical supplies that are no longer available nearly anywhere else.

No one needs this kind of supply-chain war in the world today. The Chinese themselves would like to avoid such a fight. They still need the US market for their exports. But they will not give up easily.

Remember that in 2000 the US and its allies accounted for the vast majority of global industrial output, while China contributed only 6 percent, even after two decades of rapid growth. But according to the data of the United Nations Industrial Development Organization, by 2030, China will be contributing 45 percent to global manufacturing and alone will be at par with or surpassing America and all its allies.

If the US does not use this time to respond to China, as it did after the Soviet Union launched Sputnik, the world’s first artificial satellite in 1957, it will lose this race to China.

While America was fast asleep, China has taken a giant leap in high-tech manufacturing of everything. If nothing is done, China will soon overtake America in this area. (from The New York Times)