US-China rivalry will adapt, spread into other areas: Pascal Lamy

“Bumpy” US-China relations will persist for decades as the rivalry shifts from trade to the weaponisation of strategic sectors and supply chains, according to a former head of the World Trade Organization.

Bilateral ties will experience “ups and downs, and to and fro, and left and right”, said Pascal Lamy, former WTO director general, during a media event at the China Europe International Business School in Shanghai.

“Their geostrategic competition… will not abate,” he said. “If you have both the ambition to be No 1 and the feeling that the other one is a threat for you, it leads inevitably to this.”

US President Donald Trump and President Xi Jinping agreed to a year-long trade truce in South Korea on October 30, reducing tariffs and easing some export controls. The meeting rekindled hopes of a thaw in tensions after the trade war escalated in April.

However, containing China’s rise is widely understood to have bipartisan support in Washington, while Beijing has demonstrated that it will retaliate when its interests are threatened.

Lamy noted that a broader trend has emerged beyond Trump’s attention-grabbing tariffs: “decoupling where there is a strategic sensitivity in what you produce on the one side and, on the other side, weaponising where you have comparative advantage”.