The deteriorating US relationship with China is more and more frequently being called a “cold war” and compared to the long-lasting rivalry with the Soviet Union. Even before the latest breakdown in US-China trade talks, it seemed like negotiations would at best produce a settlement of specific economic issues, and leave the broader relationship pretty frosty.

But a true “cold war” with China, if the administration does decide to go down that route, is in practice unlikely to play out in the same way as the US-USSR confrontation. This is for the simple reason that the US and Chinese economies are already intertwined to an enormous degree. By contrast, the US basically did not trade at all with the Soviet Union, and trade with its successor states has remained quite minimal. I find the simple chart below to quite striking. So for the US, a cold war with China is much more economically risky than isolating the Soviet Union ever was.

Another way to look at the US trading relationship with China is not to compare it not with historic rivals, but with other major trade blocs. It is a simple but important point that the majority of US trade is with friends and allies: Canada and Mexico, Europe, and the Asian democracies of Japan, South Korea, and Taiwan. The US has allies in the Middle East, but these alliances can be somewhat uncomfortable ones given the autocratic nature of the governments (Turkey, Egypt, Saudi Arabia). In any case the US economic integration with the Middle East is really quite small. China stands out for how it is, at the same time, both a political rival to and economically integrated with the US.

So from one perspective, the US economic relationship with China is too large and important to be casually endangered, even if it does need repairing. From another perspective, China is too different politically from the US to be permitted this degree of economic integration. I don’t know which perspective will end up dominating.