With the uncertainty of China’s rise, tensions between the United States and China have increased. Some have predicted a “new form of Cold-War style confrontation”. However, this is not likely because of the United States and China’s economic interdependence. The tensions between the two states will not escalate into a serious conflict because of the commercial peace between the two.
Countries that trade more with each other are less likely to fight wars with each other because trade between countries makes war more costly and increases the size of the bargaining range. Trade can make leaders less risk-inclined. “With trillions invested in U.S. treasuries…China has a huge stake in a more robust U.S. recovery. And the prospect of a rapidly growing consumer sector in China creates enormous opportunities for American agriculture and industry” (Gordon).
Serious conflict between China and the US would not benefit either country and a “Cold-War style confrontation” is not favorable either since both economies are so reliant on each other. A negative impact on the US’ economy will result in a negative impact on China’s economy and the possibility of “mutually assured economic destruction” is enough incentive to avoid the escalations of any tensions.
Although critics of the commercial peace argue that trade can generate new frictions between countries, this will not affect the China-US relationship because of the extent of the economic interdependence of the two states.