Why Not Nip It in the Bud? A Reigning Power's Economic Choice in Balancing against a Challenging Power

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Why does a reigning power not supplement military balancing against a challenging power by reducing bilateral trade ties? This seminar explores how these two factors together constrain the reigning state's decision over bilateral commerce when balancing militarily against the challenging state. First, when its leading industries depend heavily on economic inputs from the challenging state, forgoing trade can inflict a significant loss on the reigning state's own economic capacity. Second, if alternative trading partners exist for the challenger, restricting trade has only limited impact on the challenging state's economic performance. When these two conditions are present, and bilateral trade is restricted, the reigning state is in a position to lose more economic capacity than the challenging state. Accordingly, the reigning state would decide to maintain trade ties with the challenger in order to preserve its own relative power position. Only when both of these conditions are absent, the reigning power can inflict relative loss on the challenger and thus would abandon bilateral trade in order to complement military balancing. This claim is tested against case studies of the reigning powers' economic responses to challenging powers since the late nineteenth century. The seminar will also examine whether the United States would be able to contain China both economically and militarily if Beijing were to grow more assertive and openly challenge the U.S.-led international order.

Please join us! Coffee and tea provided. Everyone is welcome, but admittance will be on a first come–first served basis.