US and China Close Consulates in Escalation of ‘Trade War’

By Mike Talavera

In late July, China ordered the US consulate in Chengdu to close as a “legitimate and necessary” response to the Chinese consulate in Houston being forced to close the week prior by a Trump administration order, accusing the consulate of being a base for Chinese spies.

Fires could be seen inside the Houston consulate before it closed. Hopes of making progress on the trade deal between US and China, Phase 1 of which had been signed at the beginning of the year, also seem to be going up in flames.

The recent escalation follows a US federal jury indictment in July of two Chinese nationals, charged with a wide-ranging hacking campaign over the past 10 years. Among the terabytes of data stolen by the two, it is suspected that US trade secrets, such as technology designs, source code, and pharmaceutical chemical structures, were targeted.

The US move against foreign spies coincides with Iran’s execution last week of a suspected CIA informant involved in the January 3 US drone strike assassination of general Qasem Soleimani.

Along with allegations of espionage, the Houston Chinese consulate is also blamed for bullying US oil companies operating in the South China Sea. Earlier this month, the US State Department released a statement which took a harder stance against China’s claims to the sea, and this week both imperialist powers sent military reinforcements to the region.

The precarious state of the trade deal nonwithstanding, it must be recognized that this back and forth between the two imperialist countries is largely symbolic and that the struggle between the two countries involves both collusion and contention.

Ordering the closure of the consulate is one way that US imperialism, the sole hegemonic superpower, has been compelled to respond to the rising threat of Chinese imperialism, but it has also benefited greatly from China’s growing manufacturing output and the opening of its markets since the capitalist restoration initiated by arch-revisionist Deng Xiaoping.

Likewise, China counts on US imperialism as its main export customer. The trade deal, which is still in the works despite this saber-rattling, serves both imperialist countries and moreover it serves finance capital, meaning imperialist powers remain dominant while the oppressed countries of the world stay superexploited.

The two countries appeared to be coming to terms on a trade deal, their interests were always in the service of finance capital, which ultimately seeks domination, not cooperation. Now that the world economic crisis has deepened, diplomatic pretenses have been dropped and gloves have come off, revealing the inter-imperialist conflict at the heart of US-China relations.

Trump himself is anxious to appear tough in the face of plummeting poll numbers before the November election. Scapegoating the Chinese consulate plays into his racist campaign tactics, like referring to COVID19 as “Kung Flu” to rally his reactionary base. However, his colossal failure of handling the coronavirus pandemic, the widespread repression of the protests following the May Uprising, and the desecration and removal of US monuments has made it difficult for him or the US imperialist state he represents to maintain the appearance of invincibility.