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The U.S. – China Trade War is Much More Than A Prisoner’s Dilemma

Source: https://www.japantimes.co.jp/opinion/2019/09/01/commentary/world-commentary/u-s-china-spat-just-trade-war/#.XYUXSpNKg0o

 

For the past year, the U.S. has engaged in tit-for-tat tariffs against China in an effort to contain its perceived unfair trading practices and intellectual property theft. The article published by the Japan Times explores the relationship between the U.S. – China trade war and how it can be viewed as a prisoner’s dilemma. Moreover, the article explores the historical conflict of Athens and Sparta, and how it can be similarly applied to the U.S. and China. Ultimately, the article implies that China’s actions in the past several years indicate a deviation from Nash equilibrium, which has now caused a full-blown trade war between two international superpowers.

This article strongly correlates to the idea of game theory and the prisoner’s dilemma. More specifically, the idea of Nash equilibrium and pure dominant strategy is strongly implied within the context of international relations and current events. For example, if a country were to raise tariffs, that one country would win. But if another country were to retaliate, then both countries lose. This deviation from Nash equilibrium is what is currently being observed between the U.S. and China, and why the global economy is suffering as a result. In addition, the implications of these actions are much broader than the prisoner’s dilemma. In fact, it has a strong correlation to how the rise of Athens caused Sparta to respond defensively to Athens in order to assert its “greatness”. The relationship between Athens and Sparta is extremely similar to China’s rising influence and the U.S.’s reactionary policies. Ultimately, the historical consequences are more severe than people are letting on, and it is most likely best for both countries to return to cooperation, or “Nash equilibrium”.

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