With trade war initiated by U.S. President Donald Trump, the global political and economic situations continue to be turbulent. With the U.S. government imposing the tariffs of 25% and 10% on imports of steel and aluminum respectively, the U.S.'s stance on trade negotiations has become tougher.
This decision has enraged the European Union, the Great Britain, Canada and Mexico. The meeting of the G7 finance ministers held recently has become a "G6+1" meeting. After a telephonic conversation with the U.S. President Donald Trump, the British Prime Minister Theresa May stated on June 5th that the United States' imposition of punitive tariffs on steel and aluminum imported from the European Union is "unjustified and deeply disappointing". However, they agreed to discuss this issue further later this week at the Group of Seven (G7) summit in Canada. French President Emmanuel Macron and Trump also made some "terrible" calls, but they also failed to salvage the situation. Canadian Prime Minister Justin Trudeau denounced the U.S.. imposition of high tariffs on the grounds of "national security" as "unacceptable". Canada announced that it would retaliate by imposing duties on U.S. products such as steel and aluminum products worth of US$16.6 billion.
It should be emphasized that these trade disputes not only caused trade tensions, but also affects the international relations, including the breakdown of strategic, value and geopolitical alliances, causing structural changes in the global conventional order.
As an independent strategic think tank in China, Anbound has noticed the change in this world's paradigm. Anbound's chief researcher Chan Kung has proposed the new world paradigm of "1+3", which is a new framework of international relations that may emerge in the "Trump Era". The three economic powers ("3"), namely China, Germany, and Japan may form an economic bloc to counter the economic monopole ("1") formed by the superpower United States. The important characteristic that marks the difference between the two blocs is the attitude towards globalization, including the economic and trade interests of all countries and the values of globalization. In particular, the uniqueness of "Trump Era" has made it possible for the first time that China could form an alliance with Germany and Japan based on economic values to counter the U.S.
Being U.S.'s traditional ally, Europa still hopes for the transformation and "return" of the U.S. A recent analysis of the Financial Times suggests that the Western mid-sized powers should unite and strengthen co-ordination in this turbulent world, and "…this co-ordination could either be seen as preserving the current international order until the US reverts to normal, or, more gloomily, the start of a process of building alternative structures to defend liberal values". Europe and Japan will not immediately accept China to be their economic ally of common values. The West sees that although China has taken a position closer to the consensus of the mid-sized powers on issues of climate and trade, China is still not a democratic country and it is actively promoting its "authoritarian values" abroad. Obviously, even in this unique period, for the West and China to bridge their differences, it would be necessary to overcome great difficulties to achieve some progress.
The viewpoint of the Financial Times holds that both the United States and China are increasingly "tempted to break free of the constraints of international agreements and to use their power to achieve their goals, unilaterally". All these changes have caused difficulties for various mid-sized powers. Unlike the superpowers, Germany, France, Japan and the United Kingdom cannot show their strength, but they are participants in international affairs and have economic and security interests on a global scale; they need a world of rules. This common problem creates an opportunity for mid-sized powers that want to support a global rule-based order to form an informal coalition. The analyst believes that it is possible for the mid-sized powers to unite and jointly maintain a world based on rules and rights rather than strength and power. In concrete terms, Japan, Germany, the United Kingdom, France, Canada, and Australia can try to establish a group of six countries on a small scale. These rich democracies may have similar values, and common interests in many areas, including both trade and investment, as well as maintaining international human rights standards.
This "Middle-Powers Alliance" is the European version of the solution, and "1+3" is the Chinese version. Obviously, the "Middle-Powers Alliance" is to preclude China, and its most basic reason is the issue of common interests and values. If China is to promote the new "1+3" paradigm in the future, it must expand the compatibility of "1+3" and gradually form the concept with Europe and Japan. In this "Trump Era", there are many common interests and values foundations between China and these mid-sized countries.
It should be emphasized that China must have a rational process in its foreign exchanges. It is unlikely that China will get "internationalized" immediately; the cost and lessons to be learnt will certainly be there. The process of rationality may include: the first step is to listen to others; this is because China does not have much right to speak. The second step is to selectively follow and find a country that is willing to take the lead and be its supporters; this will form a community of interests. The third step is to become the leader and bring-up everyone else. Summing up the experience of China's development over the past few years, we believe that China may be in the third step, and this might be too early instead China should return to the second step for some time. Take the "1+3" as an example; if China tries to lead the "1+3", the EU will have issue with this because in the past the EU had always wanted to take charge. For "1+3", if China appears as a supporter, the result will be different, and China would not have to worry much about it.
Interests drive changes in the international circumstances, and it took longer than a day or two for the United States to move towards protectionism; this is a matter that is determined by the pattern of domestic interests in the United States. EU still hopes to win back the support of the United States in the future, though this is not easy. Therefore, China must have a strategic patience for the "1+3" new world paradigm.
