For decades, the U.S. and China have circled uneasily as current and future global superpowers. Now, President Trump's continued escalation of actions against Beijing threatens to push the two powers close to direct conflict.
Driving the news: This week, the U.S. took perhaps its most provocative action yet, springing a trap in Belgium that captured Yanjun Xu, a senior Chinese intelligence operative, and arraigning him in Cincinnati for economic espionage. This afternoon, Xu pleaded not guilty.
- The Xu arrest was the first such U.S. action against Beijing.
- Were the situation reversed — and a U.S. spy be on trial in China — it would create a major political crisis in the U.S., and possibly put the countries on a war footing.
- Thought bubble from Axios China author Bill Bishop: Expect a reaction soon from Beijing, quite possibly including the arrest of an American in China as a spy.
The big picture: This was only one of three substantial U.S. escalations against China this week. The Trump administration also tightened scrutiny of Chinese investment in U.S. technology, and issued new restrictions on the sale of civilian nuclear technology to Beijing.
- Trump and Chinese leader Xi Jinping may meet next month at the G20 meeting in Buenos Aires, the WSJ reports.
But the trio of actions — coming after last month's enactment of tariffs on half of Chinese exports to the U.S., amounting to $250 billion — amounts to a significant intensification of the U.S. offensive against Beijing.
- The White House asserts that it is only seeking redress after a wholesale Chinese assault on the U.S. and Western economies through the theft and extortion of intellectual property.
- And some dangle hope that the relationship can return to what it was once trade and IP issues are resolved.
- But many experts say relations are forever changed — and that the risk of an outbreak of war is growing. "As confrontation increases, the path to conflict is very short because the space to talk has been reduced or even eliminated," Gen. John Allen, president of the Brookings Institution, tells Axios.
The bottom line: One worrying thing is that, while Trump has sought to force U.S. allies to join the offensive, it has failed to do the diplomacy to create that kind of united front....
- If Trump's team is seeking "to out-compete China