Power, Identity, and Interdependence: Rethinking Markets Through the U.S.-China Economic Relationship

Abstract

U.S.-China trade relations are the world’s most consequential economic pairing and remain as relevant as ever in the face of their shift from hyperglobalization into a strategic rivalry. The pressing question is: why do ostensibly "neutral" market exchanges now function as tools of power, coercion, and the source of national identity? Markets are thus not neutral. Economic interactions between the U.S. and China show that these exchanges are shaped by the political institutions that govern them and influenced by national identity and state strategies. We will use a macro-political economic lens to view markets as social institutions, and economic interdependence as a social construct. We will examine the evolution of policy from the first Trump administration to the Biden Administration, and conclude on the present-day second Trump administration. In doing so, we can examine the consistency and stance of these administrations via their policies on tariffs, export controls, technology restrictions, and industrial policy. The conclusion is that economic relations reflect ideology and power. Concerns over national identity and legitimacy shape economic decision-making and this paper ultimately aims to understand economic conflict by integrating political economy with a sociological lens on institutions and identity