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Opinion

If Trump Abandons the TPP, China Will Be the Biggest Winner

By Pankaj Ghemawat

Pankaj Ghemawat

It’s significant that Trump did not, in his first post-election video address, mention his proposals from the campaign to declare China a currency manipulator.

The phrase “Thucydides Trap” refers to the likelihood of tensions and even war between an established power and a rising challenger. Even before Donald Trump’s election to the U.S. presidency, the relationship between the U.S. and China was often cast in these terms, with analysts such as Graham Allison concluding that war was not an unimaginable outcome. How, if at all, do Trump’s election and recent pronouncements influence our assessment of that relationship?

It’s significant that Trump did not, in his first post-election video address, mention his proposals from the campaign to declare China a currency manipulator or to slap punitive tariffs on Chinese imports. Such steps may, of course, still be on their way. And if they are taken, they may yet provoke a meltdown of globalization. In the words of Xi Jinping at his steeliest, there is no alternative to cooperation. If the U.S. did try to “punish” China on trade, the Chinese could retaliate in kind against the likes of Boeing or Apple — or even dump U.S. governmental debt.

Read the full article in Harvard Business Review

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Pankaj Ghemawat is a Global Professor of Management and Strategy and Director of the Center for the Globalization of Education and Management.