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Monday, Jun 02, 2025

Former world leaders warn US-China trade dispute could lead to new cold war

Former world leaders warn US-China trade dispute could lead to new cold war

Kevin Rudd is among a coalition of former leaders who have urged the US and China to settle their differences
The ongoing trade war between the US and China, with its associated decoupling of the two powerhouse economies, was a step in the direction of a new cold war, a coalition of former world leaders has warned.

Writing on behalf of the global leadership foundation in an opinion piece published in the New York Times overnight, former prime ministers Kevin Rudd of Australia, Helen Clark of New Zealand and Carl Bildt of Sweden have urged presidents Donald Trump and Xi Jinping to end their trade dispute for the sake of the world at large.

Labelling the dispute the “single greatest threat to global economic growth today,” the coalition of former leaders, which also includes François Fillon of France, Joe Clark of Canada, Enrico Letta of Italy, Jan Peter Balkenende of the Netherlands, Felipe Calderón and Ernesto Zedillo of Mexico and Han Seung-soo of South Korea expressed anxiety over the wider impact of the clash.

“Such a [further] decoupling [of the two economies] would present a long-term threat to global peace and security,” the leaders wrote.

“It would also effectively constitute the first step in the declaration of a new cold war. As with the last cold War, many nations would be forced to choose between the two powers. And that is a choice none of us wants to make.”

The former leaders have suggested a year’s end deadline, recommending the World Trade Organisation be allowed to step in and address issues with some of China’s trade practices.

The open letter to China and the US comes as Trump is expected to meet with the Chinese vice-premier, Liu He, at the White House, with discussions between the two warring trade nations recently opening up.

On Thursday, trade officials from the US and China met for the first time since July, raising hopes of a limited trade agreement that could negate Trump’s planned tariff increase on Chinese goods.

The US had intended on raising tariffs against another US$160bn of Chinese goods on 15 October, having already imposed tariffs on more than US$350bn of products.

Cracking down on China’s trade practices had been a key campaign issue for Trump in the lead up to his 2016 election win. Most recently, the US president used his spotlight on the UN stage to double down on his message.

“Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of intellectual property and also trade secrets on a grand scale,” Trump said in September.

“As far as America is concerned, those days are over.”

The theft of intellectual property by Chinese companies was a key sticking point in the trade negotiations, with the US demanding better protection of American IP from China, along with an end to cyber theft.

Australia, through Peter Dutton, briefly waded into that debate on Friday, with the home affairs minister telling journalists that while Australia’s relationship with China was “very important” it reserved the right to criticise what it saw as wrongdoing.

“We won’t allow theft of intellectual property and we won’t allow our government bodies or our non-government bodies to be hacked into,” Dutton said.

“The cyber world that we’re on the cusp of is hardly imagined by many Australians. 5G, the internet of things, the connectivity … devices around the world that will be upon us within a matter of years, is part of the reason the government made a decision not to allow certain vendors into the 5G market.

“We will work closely with all our international partners. It is right we call out where people have done the wrong thing.”
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