The United States is on the brink of a trade war with China, with a president who has threatened to impose tariffs on China and who has said he will impose tariffs if Beijing does not pay a “fair price” for American goods.
The stakes are high in the global race to build the next generation of advanced, advanced, and cheap technology, from solar panels to artificial intelligence.
The stakes are particularly high in China.
The country is the world’s second-largest economy and the third-largest in the world after the US and the EU.
The US and China share a vast territory and strategic choke point along the Chinese coast, known as the South China Sea, where China has built a powerful military presence.
The two countries have fought a string of territorial disputes over the South Chinese Sea, with China asserting its exclusive economic zone (EEZ) in the South and the US claiming the strategic waters of the Paracel Islands.
But the current trade dispute, over the disputed Scarborough Shoal in the Spratlys, is more significant.
China claims the vast swathes of the South, which are claimed by Vietnam, the Philippines, Taiwan and Brunei, as its own.
The South China Strait is also known as Senkaku in Japan, a chain of islands that is also controlled by China.
The Philippines is a major trading partner for China and has been pressing Beijing to recognise its claim to the South as part of its sovereign rights.
In a sign of growing tensions between Beijing and Washington, the Chinese government on Friday banned foreign journalists from attending the inauguration ceremony in Washington.
China’s foreign ministry also threatened to cut off financial aid to Washington unless the US agreed to recognise the Philippines’ claim to parts of the sea.
But the most significant challenge facing the US is that its relationship with China is deeply intertwined with the US-led coalition fighting Islamic State (IS, also known by its Arabic acronym ISIS) in Syria.
This week the Pentagon issued a warning to China not to send its “little brother” fighters to join US forces in the fight against IS.
In September, the Pentagon said US military commanders had ordered that US special operations forces avoid working with China.
China has been one of the most influential and active players in the coalition fighting IS in Syria, helping to train and equip Syrian rebel groups, providing air support and training local militias.US Secretary of State Rex Tillerson told lawmakers on Thursday that the US would “be prepared to work with China” in Syria if the two sides agree on a plan to destroy IS.