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When it came to sheer brutality, the ‘Thrilla in Manila’ was epic in scale and savagery. As he slumped on his stool battered and near blind with bruised, closing eyes, Joe Frazier was stopped from going out for the 15th and final round.

Across the ring in this requiem for heavyweights, an exhausted Muhammad Ali wearily raised his arms in mute celebrations after retaining his world heavyweight title in the twilight of 1975.

More than 40 years later, another punishing encounter between two economic global heavyweights, China and the United States, is potentially unfolding in what is being billed as the ‘Trade War Beyond The Shore.’

On Tuesday, the bell went for rounds three and four when Washington published a list of up to 1,300 Chinese products, which could be hit by tariffs worth at least US$50 billion. Within hours, China came back with a counter-punch, covering 106 US imports worth the same amount.

“The question now is whether the US chooses to escalate further. If so it would be a paradigm shift for global markets,” Viraj Patel, a currency strategist at ING Groep, told Bloomberg News.

Last month, President Donald Trump’s administration announced plans to tax certain Chinese imports in retaliation for what it sees as unfair practices surrounding intellectual property rights.

“[This is] in response to China’s policies that coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises [which] bolster China’s stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans,” the United States Trade Representative agency confirmed in a statement.

The last reference was aimed at Beijing’s ‘Made in China 2025’ policy to replace advanced tech imports with domestic products.

US list

Strategic sectors involving information technology, robotics, aircraft components, new energy vehicles, pharmaceuticals and advanced shipbuilding and marine engineering are part of the initiative.

They also figure prominently on the US list, which will be forwarded for public consultation before being rolled out.

“The proposed list of products is based on extensive interagency economic analysis and would target products that benefit from China’s industrial plans while minimizing the impact on the US economy,” the office of the US trade representative, Robert Lighthizer, said in a statement.

Before its tit-for-tat response, Beijing reacted with a stern warning wrapped up in an offer to “intensify” talks to cool rising trade tensions.

The Ministry of Commerce strongly “condemned” the latest move by Washington and confirmed it would take “reciprocal measures.”

“We have the confidence and capability to respond to any US protectionist measures,” Lu Kang, a spokesman for the Chinese Foreign Ministry, said in a statement reported by the state-owned China Daily.

“The US action has recklessly disregarded the 40 years of China-US economic cooperation, which was mutually beneficial in nature. It has recklessly disregarded the outcry from the business community and interests of consumers,” he added.

A more measured tone came from Cui Tiankai, the Chinese ambassador to the US. He followed Beijing’s line that “protectionism would not protect anybody,” but tempered those remarks by calling for renewed efforts on the diplomatic front.

“We are always ready to continue and intensify our dialogue and communication with the US on any possible economic or trade issues, but we need reciprocity. Our goodwill has to be met by the same degree of goodwill,” he told CNBC television.

On Monday, Cui weighed into round two of this verbal slugfest after China wheeled out tariffs worth $3 billion on an array of US imports. A month earlier, Trump had announced he would target cheap steel and aluminum imports as the opening bell sounded for round one.

It was all part of the White House’s broader plan to rebalance the record $375 billion trade deficit, which the US racked up with China last year, and punish the world’s second-largest economy for what it sees as widespread violations of American intellectual property rights.

“If they do [impose new tariffs] we will certainly take counter-measures of the same proportion, and of the same scale and same intensity,” Cui told the Washington media with prophetic insight.

Yet despite the rhetoric, these early exchanges in the ‘Trade War Beyond The Shore’ have drawn mixed reactions from analysts, business leaders and academics.

Shane Oliver, the head of investment strategy at AMP Capital Investors in Sydney, felt the proposed US tariffs would have a limited impact on Chinese shipments to the US, which totaled $506 billion last year.

Only danger

He felt the only danger was that Washington might retaliate for Beijing’s reprisals. “The main risk is that China’s response leads to a counter-retaliation by the US,” he told Bloomberg News.

His view was endorsed by Ian Goldin, a professor at the University of Oxford in the United Kingdom. “Trade tension is a zero-sum game and no country has ever succeeded in this environment if there is a trade war,” he was quoted as saying in the Chinese media.

Still, Carlos Gutierrez, the Commerce Secretary under former US President George W. Bush, admitted he was concerned that the dispute could spiral out of control as the bellicose language inflames an already combustible situation.

He pointed out that “wars start” with battles and the “battles have started.”

An even darker scenario was painted by Wei Jianguo, the former vice-minister of commerce and now the executive deputy director of the China Center for International Economic Exchanges, a government-linked think tank.

He called the US decision to draw up a list of tariffs as a bid to “strangle China’s high-tech innovation.” “China does not want to see a trade war,” Wei told the Washington Post. “But if Trump insists, China is not afraid of it.”

Just like the ‘Thrilla in Manila,’ the gloves are not coming off, they are just going on.

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