President-elect Joe Biden should aim to strike a grand bargain with America's democratic allies.
The achievement of the Trump administration was to recognize the authoritarian threat from China. The task of the Biden administration will be to work out what to do about it. Donald Trump's instinct was for America to run his fight single-handed. Old allies were henchmen, not partners. As Joe Biden prepares his China strategy, the economist concludes that he should choose a different path.
This beginning of a second Cold War differs from the first one: The rivalry with the Soviet Union was focused on ideology and nuclear weapons, whereas the new battlefield today is information technology. The protagonists in the second are interconnected. The Chinese Communist Party has understood that tech is the path to power.
Trump's abusive solo response has had some success, as he has browbeaten some allies to stop buying gear for 5G networks from Huawei; but in the long run this approach favors China. It has already accelerated China's efforts to create is own world-class chip industry and Europe is increasingly unwilling to leave itself open to American pressure.
A grand bargaining would turn that conflict with Europe into collaboration: Rather than be consumed by squabbles, the allies could share an approach to issues like taxation, takeover rules and supply chains. Instead of leaving America isolated, a grand bargain would help it keep ahead in the race for tech dominance by bringing in the gains of closer co-operation with like-minded countries.
Even though such an agreement requires all parties to make major concessions, a grand bargaining would help focus competition with China on tech, potentially enabling detente in areas where collaboration is essential, such as curbing global warming, health, and arms control. A grand bargain could make the world safer by making it more predictable.
Jan Mueller
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