'Dangerous dynamic': Coronavirus threatens new 'Cold War' between US and China

WASHINGTON – President Donald Trump has accused China of a coronavirus cover-up, suggested the government may have allowed the disease to spread, and threatened to extract a “substantial” price from Beijing for the pandemic.

Chinese officials have charged the Trump administration with willful ignorance, dangerous mismanagement and even attempted “blackmail.”

The near-daily bomb-throwing between Washington and Beijing has alarmed national security experts who fear a new “Cold War” is brewing between the two superpowers at a moment of global crisis. 

"This is such a dangerous dynamic for the world," said Rachel Esplin Odell, a China expert with the Quincy Institute for Responsible Statecraft, which advocates restraint in U.S. military policy.

“Both governments are trying to profit domestically off the other's failures," she said, fighting fire with fire as the world burns.   

The fallout could be far-reaching – prolonging the pandemic, deepening the global economic crisis, jeopardizing delicate trade talks and opening new geopolitical rifts, Odell and others said. 

"This is kind of the archetypal issue on which you would hope to have cooperation among the whole world – but especially among leading powers – because the downside is so high when you don’t have it," said Jacob Stokes, a senior China policy analyst with the U.S. Institute of Peace, a nonpartisan institute.

Worst in 'nearly 50 years'

So far, there is no indication the heightened tensions will lead to a military confrontation, although the U.S. Navy conducted a "freedom of navigation operation" recently in the South China Sea, in an area Beijing claims as its territory. 

But U.S.-China relations are "the worst they’ve been in nearly 50 years," said Stokes, a former national security adviser to Vice President Joe Biden.  

One of the first casualties could be the much-touted trade deal Trump and Chinese Vice Premier Liu He signed at the White House in January – a "phase one" agreement that White House officials said would be followed by a broader pact dealing with more contentious issues. 

More:What the fight between Biden and Trump over China means for the 2020 election

It's unclear if China will be willing or able to follow through on its commitments in phase one, which included a promise to buy an extra $200 billion in American goods and services over the next two years – from agricultural products to cars to medical instruments.

Stokes said that pledge was going to be hard to fulfill in normal economic times. With China's economy now shrinking because of the pandemic, President Xi Jinping's government may seek to renegotiate or renege on the deal.

"And can you have phase two if phase one didn’t work?" Stokes said. "That’s a big challenge."

On Monday, Trump's treasury secretary, Steven Mnuchin, said he expected Xi to follow through on the January agreement despite the increased tensions and the economic crunch. 

"If they don't, there would be very significant consequences in the relationship and in the global economy as to how people would do business with them," Mnuchin said in an interview with Fox Business Network.

But even as Mnuchin hopes to preserve the trade deal, Trump has floated the idea of imposing new tariffs on China and trying to extract reparations for the economic and human toll of the pandemic. 

"They made a horrible mistake and they didn't want to admit it," the president said Sunday during a Fox News virtual town hall. "They tried to cover it. They tried to put it out, just like a fire," but they failed, he said.

The president said he's looking at ways to make China pay, but he did not offer specifics.

"We haven't determined the final amount yet," Trump said last week when asked about possible reparations. "It’s very substantial."

If Trump follows through on threats of new tariffs or other economic retaliation, it could dramatically worsen the economic crisis, Odell. 

"It would have a chilling effect on the global economy and markets," she said.

A senior Chinese official, Executive Le Yucheng, dismissed Trump's remarks as a "farce" and likened the idea of reparations to "blackmail." In an interview April 29 with NBC News, Le accused the Trump administration of doing nothing for 50 days after China locked down the coronavirus' epicenter and warned of its deadly spread.

Yong Wang, who directs the American studies center at Peking University in Beijing, said relentless rhetoric from the Trump administration blaming China for the coronavirus outbreak risks a new "Cold War." It could also undermine the view of America among the Chinese public, he said.

"It used to be taken for granted in China that the U.S. political system was reasonably trustworthy. That has started to change," he said.

Like many Chinese political experts and government officials, Wang believes Trump’s accusations against China are part of a ploy to deflect domestic criticism of his own handling of the pandemic. Trump has seen his poll numbers slip in recent weeks, with Biden holding a slim lead in several battleground states.

China has also come under fire for its lack of transparency over the outbreak, particularly in the initial stage, when it censored information about the virus and silenced doctors who tried to raise alarms. That sparked an intense backlash inside China – which Xi quickly moved to stifle – as well as abroad. 

Even now, U.S. officials and health experts have questioned whether China's infection rates and death toll can be trusted. Raising further concerns, Beijing has restricted access to its research on the virus, according to a CNN report.

The U.S. is not the only country angry over China's handling of the virus, and other world leaders have already seen the potential fallout from picking a fight with Beijing. In Australia, the prime minister, Scott Morrison, called for an independent inquiry into the origins of the coronavirus. China's response was swift and included threats of an economic boycott of Australian products and accusations that Morrison was engaging in "despicable opportunism."

Does Trump need to tread carefully?

The desire to make China pay is understandable, said Dan Blumenthal, director of Asian studies at the American Enterprise Institute, a Washington, D.C., think tank. But Blumenthal, a former Pentagon official in the George W. Bush administration, said Trump has to tread carefully because of America's reliance on China for medical supplies. 

"He doesn’t want to get into a war of words with Xi for reasons of Chinese medical equipment exports and other critical things we need," he said. In the long term, American politicians and the public will "want to be far less dependent" on China and will support efforts to separate the two economies. But such an effort could take years, and it will come at a price, he said.

"U.S. leaders are going to have to be very upfront with the public that for a time these products will be costlier," Blumenthal said. 

Wang, the Peking University expert, said that if the U.S. pushes ahead with threats to seek coronavirus-related damages against China or to "decouple" the two economies, it probably would backfire. China is already starting to show signs that it will be the first economy to recover from the crisis, putting Beijing in a stronger position to retaliate if relations deteriorate further.

Wang also said that if the U.S. tries to alienate China diplomatically, then Beijing will move to form deeper alliances in Europe, Asia and around the world.  

"Let’s be clear: China doesn’t want any of this to happen. It wants to cooperate," he said. "But it will be prepared to mount economic counterattacks if China hawks in the Trump administration continue on this dangerous path." 

Asad Majeed Khan, Pakistan's ambassador to the U.S., said his country has not felt pressure to choose between two important allies so far. But the heated rhetoric is concerning, he said.

"Obviously when you have tensions escalate between two of the largest economies in the world and the most powerful countries ... at a time when the world needs to come together," it can undermine the global capacity to deal with this extraordinary challenge, Khan said.

China video mocks Trump response 

Odell said that whether the Trump and Xi like it or not, the U.S. and China must work together now on everything from the development of a vaccine to the global supply of medical supplies. 

The world needs U.S.-China economic integration and political collaboration "to get through the current crisis," she said.

For now, there are few signs that will happen any time soon. 

In a startling propaganda video, China's government has openly mocked Trump's attempts to down play the virus. The animated video, posted on April 30 by China's state-run Xinhua news agency, uses Lego-like figures to promote a narrative that China handled the outbreak responsibly while the U.S. dithered. 

"We discovered a new virus," says a warrior figure intended to represent China.

"So what?" chirps a Statue of Liberty, a Trump stand-in. "It's only a flu" and "It will magically go away in April."