The US-China rivalry runs through energy and minerals

The frame is the one Allison coined. When a rapidly rising power seriously threatens to displace a ruling power, the normal outcome is war, often a catastrophic one. What makes this more than an analogy is the mechanism he attaches to it. The danger is not that either side chooses war; it is that the rivalry magnifies misperception and multiplies miscalculation, so a small spark can start a spiral nobody wanted. His example is the assassination in Sarajevo in 1914, a tiny event that burned down Europe. His test for whether the decisions were rational is retrospective: by 1918 every combatant except the late-arriving United States had effectively been defeated, so given a do-over none of those leaders would have chosen what they chose. He says both Xi and Trump understand the present rivalry in these terms.

The second move is symmetry of grievance. China’s story of itself runs from being the center of the world for all of history to the last two hundred years, in which Westerners with technology arrived to humiliate it, what the Chinese call the century of humiliation. That makes the current project a rejuvenation rather than an aggression. The American story is the “80, 80, and 9” record: eighty years without great power war, eighty since nuclear weapons were used in war, and nine nuclear-armed states rather than the twenty-five once forecast for 1970, all of which Americans attribute to their own leadership and guardianship of an international order. Allison’s point is that each side’s reading is intelligible from inside the other’s history, and that this buys nobody a pass. It only means the motivations are more complex than a simple threat assessment, and that if diplomacy as usual forecasts history as usual, the forecast is catastrophe.

The turn in the conversation is the tariff fight and what it revealed. Allison describes an escalation ladder in which tariffs went to 40, 60 and 100 percent with Xi matching each move, and then to 145 percent, where Xi stopped at 125 and did not match. That is the point at which the Treasury Secretary called it what it was, an embargo. China then choked off the supply of rare earth magnets and other items, and within a week or two American production lines including the F-35 and the Ford Explorer were facing shutdown. The American reversal was immediate, and Allison notes that Trump and Bessent both described being caught out unusually candidly. The lesson he draws is not that China won a round. It is that the two economies are entangled in each other at a depth where each one’s survival and wellbeing now requires some cooperation from the other, which is much harder to act on than simple rivalry. He reaches for the business term co-opetition and the example of Apple depending on Samsung, its fiercest competitor, for critical iPhone components, and Tim Cook’s answer when pressed on it: life is complicated. The open question he leaves is whether American strategists, and the American public, can tolerate that much complexity. Taiwan is where it is most dangerous. He believes, and believes Xi believes, that China would choose war over an independent Taiwan even if the war were ultimately catastrophic for China, because no Chinese leader could survive that outcome domestically. Against that, the strategic ambiguity arrangement has held for the more than fifty years since relations were re-established, which is his evidence that an irresolvable issue is not necessarily an unmanageable one.

Energy enters mostly as a stress test rather than as a flashpoint, and this is where Allison is most careful. He says he does not see a clear path from the Iran war and the closure of the Strait of Hormuz to a US-China conflict, because the two countries share an interest in reopening it, and he adds that maybe he is not being imaginative enough. What the shock exposes instead is uneven preparation. China was the only country making substantial additions to its strategic petroleum reserve in January and February, before the attack on Iran, and it has diversified into solar, wind and nuclear to the point that oil is a small share of its energy consumption. Producers and net exporters are fine. The pain lands on Japan, India, Indonesia, the Philippines and much of Europe, and on Ukraine, since higher oil revenue funds Russia while the weapons that might have gone to Kyiv are absorbed by the Middle East. Asked what it would take to reach a stable hundred-year version of the 80-80-9 world, he leads with the negative case and gives it the higher probability: an order under assault by a wrecking ball, unravelling to some tragic outcome. His optimistic case is not a plan but a precedent. The people who built the post-1945 order were improvising daily rather than executing a design, and it has been renovated repeatedly since, including the recovery of thousands of Soviet warheads after 1991. Renewal is possible in each arena, energy included, but he says it would require imagination and initiative well beyond anything currently visible.