While the outcome is uncertain, it is clear that Trump’s attempt to shake up current bilateral relations between the two superpowers will be a key theme for 2017 globally. We expect that China will take a wait-and-see approach, especially in front of the 19th National Congress of the CPC later this year. However, as the U.S. shies away from multilateral or regional trade agreements, such as TPP, China will quickly fill the space.

Apart from various niches of the political and academic intelligentsia, America’s relationship with China is one that continues to be largely and mutually beneficial but misunderstood, and one that is generally swept under the carpet in favor of America’s Euro-centric view of the world.

Trade protectionism won’t bring new opportunities to the US, because the global markets have become highly intertwined and interdependent, and the new president’s massive fiscal stimulus plan conflicts with contractionary monetary policy.

The degree of monetary easing in the major economies is unprecedented and has nearly gone to the extreme, but risk preference and incremental capital gains are the key factors that determine capital flow. International policy coordination can prevent systemic risk from spreading in foreign exchange markets, credit markets and asset cost as well as cross-border capital flow.

China is prepared to expand its presence in the Western hemisphere should the new U.S. president’s protectionist nationalism turn from campaign rhetoric into political reality. It may be premature to cite China as the “defender of free trade,” yet if Mr. Trump pursues a protectionist trade policy, and American consumers feel the rising prices on automobiles, televisions and thousands of other goods produced at cheaper cost abroad, Latin American economies geared for global export markets may look particularly competitive beyond their region.

However histrionic the demagogic oratory of President Trump has been, his strategy to revitalize American manufacturing will be better served by exporting more to China, not decreasing Chinese imports. China’s gigantic market has thus become the golden apple of discord in an accelerating geo-economic competition between the United States and Germany, which already enjoys significant production networks within the Middle Kingdom. Yet unlike the days of the Boxer Revolution and the alliance of eight Western nations, China can this time choose her major commercial partners.

A trade war, such as some are predicting, harms both countries, creates uncertainty for many other countries, and is an activity that does not belong anywhere in the interconnected global world of the 21st century. I believe this will be averted. Instead, I truly believe the two presidents are pragmatic and understanding of the stakes involved, and will start a communication and negotiation process that results in wins for both countries.

Like a slow motion train wreck, we can see what’s coming, but are powerless to stop it. No longer do facts matter. No longer is there appetite for cautious deliberation. No longer can we assume cooler heads will prevail. The guardrails and emergency brakes that prevented the relationship from running off the tracks in the past have fallen into disrepair. Where else to go, but into the abyss?

Nine years after the global financial crisis, while many economies are on the mend, anxiety lingers about the negative side of economic globalization. Populist and protectionist forces dismiss globalization as working against ordinary workers and widening economic inequality. Should globalization be blamed for all the problems facing the world? Is a reversal of globalization the way forward?

The full American tax reform is an enormous topic, but its impact at home is what matters, not whether the trade deficit barrows. Similarly, Beijing will respond forcefully to anything like a 35% across-the-board tariff aimed only at China. But in the case of the current BAT, China is best served by focusing on fixing its own house.