The Roots of the China-US Financial Cold War

Recent years have seen a steady escalation in China-US tensions, with many now claiming that the two countries are in a new Cold War. Analogies with the 20th-century conflict between the United States and the Soviet Union, however, are misplaced. At the outset of the Cold War, there was no meaningful trade or investment between the US and the USSR. With virtually no economic relationship to begin with, there was little to lose from strategic disengagement. Today, globalization has interwoven and integrated economies and supply chains around the world to an extent that would make a decoupling between China and the US not only economically damaging, but also quite likely to lead to a cascading set of international conflicts.

How did we find ourselves in this precarious position? And how can current tensions be de-escalated?