Strategic Significance of the Breakdown of the U.S.-China Trade Negotiations

Dr. Kisoo Kim

Senior Research Fellow, the Sejong Institute

kskim@sejong.org

Executive Summary

○ As various trade theories suggest trade dispute between the U.S. and China can be analyzed in multi-dimensions: a tariff-oriented conflict in bilateral relations, a dispute over unfair trade practices within the current international trade system, and a competition of hegemony between the two countries to gain the upper hand in international economic system and global strategy.

○ Hegemony competition with the intensity of trade war between the U.S. and China can briefly explain the reason for the breakdown of negotiations. The U.S. demanded China to change its entire economic system, which completely differentiates from that of the U.S., and in reality China could not accept such claim.

○ Although the U.S. and China agreed to resume their negotiations at the G20 summit, the prospect is not rosy.

○ In the near future, South Korea should reflect the expert’s opinion that the U.S. is playing a game that cannot be beaten, and China, on the other hand, a game that cannot be won, in its international economic policy.

※ Translator’s note: This is a summarized unofficial translation of the original paper which was written in Korean. All references should be made to the original paper.

※ This article is written based on the author’s personal opinions and does not reflect the views of the Sejong Institute.