Their origin story is, by Keynes’s own telling, a little absurd. When she was at The Economist and trying to launch an economics podcast, she auditioned several co-hosts, including Bown. They were pleased with their wonky pilot, but a colleague confided: “By the end of it, I lost the will to live.” Keynes knew she had a match. “I was like, ‘Cool, he’s the guy I want to do my podcast with.'”

Their schedule was naturally interrupted when Keynes gave birth last year and decided she needed a new project, so calling Bown was the obvious move. The result is How to Win a Trade War, their first book together. It published this spring—right as President Donald Trump boarded Air Force One for Beijing to meet President Xi Jinping—and it may be the most useful thing you can read to understand what just happened, and what comes next. As Fortune caught up with Keynes and Bown, they were backstage in New York, beaming at their forthcoming appearance with Jon Stewart on The Daily Show.

At a moment when the White House is improvising trade strategy in real time, Keynes and Bown offer something rarer: a historical framework for what actually works—and a bracing argument that America is still getting it wrong.

The Trump-Xi summit formed a natural news peg, Keynes said, but so did April 2, the one-year anniversary of Trump’s tariffs liberation day, and Keynes expects many more to come.

“This whole summer is going to be real busy with trade stuff, because basically, the Trump administration is going to be rebuilding its tariff wall, we’re going to have all the results of the investigations,” she said, referring to the investigations needed to erect new tariffs after the Supreme Court struck down many of Trump’s as unconstitutional. But the main thing, she and Bown said, as they recently argued in The New York Times, is the Beijing summit left the core economic conflict unresolved.

Beneath the headline diplomacy of Beijing summits and tariff truces, Keynes and Bown contend, the U.S.-China economic rivalry has moved into terrain that America is not well-equipped to navigate—and Washington needs to study its rival more carefully than it has been willing to admit.

“There’s still a lot of learning that we have to do,” Keynes said. “We don’t live in a perfect world.”

A big part of their book, she explained, is that countries have to use some “imperfect tools” to look after their interests, and try and manage the consequences as best they can.

America’s industrial policy problem

Chief among those imperfect tools: industrial policy.

For generations, the U.S. has been philosophically squeamish about government intervention in markets, whereas China has had no such reservations, being quite literally a centrally directed Communist economy at heart. What is instructive, the book explains, is that when China decided to dominate its electric vehicle and battery markets, it didn’t just fund R&D. It also created the domestic demand to absorb what it built through local content requirements and state-directed purchasing. The U.S., by contrast, poured billions into the CHIPS Act to boost domestic semiconductor production but never mandated that anyone actually buy the chips.

“They didn’t force anyone else to actually buy the chips that Intel was going to make,” Keynes said. “And that was a problem.”

It’s a contrast that goes back further than the current rivalry. Silicon Valley itself, Keynes and Bown agreed, is a clear example of American industrial policy: The Department of Defense and NASA together accounted for roughly half of all U.S. semiconductor demand in the industry’s infancy, creating the market that made the technology viable.

“I don’t think anybody knew at the time how amazing semiconductors would ultimately be,” Keynes said. The U.S. stumbled into it. China, by contrast, is doing it deliberately—and at scale.

China’s rare earths gambit makes the point sharply. The decision to restrict exports of minerals critical to defense and clean energy wasn’t improvised.

“They didn’t just fall into that,” Keynes said. “They learned about those supply chains. They had a strategy to become the world’s leader.”

President Xi has articulated it explicitly in his “dual circulation” doctrine: Make the world dependent on China, while insulating China from dependence on anyone else. Rare earths and permanent magnets were a proof of concept. The AI chip race is the next front.

Bown and Keynes were careful not to advocate for copying the Chinese model wholesale. China’s system is wasteful and politically captured: The country currently has more than 100 EV companies competing at a loss because the government refuses to allow bankruptcies and let the market consolidate.

“They need to let some of those firms go bankrupt and create a more efficient market,” Bown said. But their core argument is the U.S. is making a mirror-image mistake: adopting a piecemeal version of industrial policy as competition is peaking and seeing industries struggle to take off.

The Trump administration isn’t anti-industrial policy, Bown and Keynes argued. It’s true that Trump gutted much of the Inflation Reduction Act’s clean energy industrial programs, but he simultaneously expanded CHIPS Act tax credits from 25% to 35%. Of course, in an unprecedented move for a Republican White House, it has taken equity stakes in private companies, including Intel.

Bown noted China has hundreds of firms under explicit state control, unlike the Intel situation where America rides along as a minority shareholder. They’re known as “state-owned enterprises,” or SOEs, and they have some benefits.

“These companies,” Bown explained, “are not just maximizing profits. They’re doing other things. They’re achieving other objectives on behalf of the Chinese government. We think sometimes that may be employment stability. Maybe they’re thinking longer-term or they’re thinking about national security.”

“They actually have access to a lot more data than I think we have,” Keynes said of the SOEs. “There’s a much closer relationship between a lot of companies and the government, which is going to give them access to information,” Bown said, concluding, “I think they’ve been thinking harder about a lot of these issues.”

Keynes and Bown suggested the White House is still working out its own theory of economic competition.

“I’m not sure that taking equity stakes in companies is the right way to go,” Keynes said, though she acknowledged the underlying problem is real. Rare earths producers have historically struggled to stay solvent, and some form of government backstop may be unavoidable.

The book isn’t just a diagnosis of problems, it proposes tools. One that Keynes flagged on The Daily Show is wage insurance: a program that subsidizes the income gap when workers displaced by trade take lower-paying new jobs. The evidence, she said, suggests it “actually can pay for itself, which is kind of never heard of in economic policies.” It’s the kind of imperfect-but-workable instrument the book consistently advocates for: unglamorous, politically awkward, and probably necessary.

Winners and losers

The book’s historical sweep reveals another consistent pattern: Trade wars are rarely what they look like from the outside.

Beneath the high politics are corporate incentive structures, industry concentration levels, and supply chain logistics that often determine outcomes more than any presidential proclamation. During Trump’s first term, the steel industry lobbied hard for tariffs while the aluminum industry (more globally integrated and dependent on imports) quietly fought against them. The difference came down to industrial structure: Domestic steel producers had every incentive to push for protection; aluminum companies knew tariffs would hurt their own supply chains.

In the current era, something similar played out at larger scale. Official data showed a steep drop in imports from China, but Keynes and Bown argue the trade largely rerouted through Vietnam, Mexico, and other intermediaries, with some companies simply underreporting values on customs forms. Companies adapted rather than resisted. And once they rebuilt their supply chains around the new reality, many stopped pushing for a reversal.

“Once they start adjusting, they don’t want to have to go back,” Keynes said.

This dynamic prompted an exchange with Jon Stewart when The Daily Show host asked where corporations fit in the trade war, and Bown described multinationals as “the soldiers” executing strategy.

Stewart pushed back immediately: “They’re not soldiers, they’re mercenaries—they’re Blackwater.”

Bown didn’t disagree: “We can’t expect them to fight our battles for us,” he said. “Unless you incentivize them to, unless you create the right regulations to force them to behave in certain ways, they’re just going to act in their own interests.”

Keynes observed some nuance on this issue in her talk with Fortune, noting the U.S. Chamber of Commerce has been pretty critical of Trump’s tariffs, but their language was often about the impact on small business.

“I think among the bigger players, there was the sense that, you know what, they were sort of going to stay out of some of this and maybe do bilateral conversations with the president.”

The next trade war is already starting

Bown told Fortune he saw Europe as the next flashpoint—currently being flooded with cheap Chinese exports across EVs, chemicals, and industrial goods.

“They’re sort of where we were in a lot of this stuff in 2017, 2018,” he said. A China-Europe trade collision, he suggested, could reshape the global economic picture more dramatically than anything that comes out of Beijing this week.

Keynes argued on The Daily Show Trump has compounded this strategic problem by picking fights simultaneously with Europe, Canada, and Mexico at precisely the moment those allies were needed to form a united front against China.

“What would have been good is to work with allies,” she told Stewart. “Europe was going to try to deal with the China issue, but now it’s having to also deal with the U.S. issue at the same time.”

As for the summit itself, the economists said it wasn’t a win for either party. The structural forces at play—China’s supply chain dominance strategy, America’s decoupling push, the rare earths standoff—aren’t the kind of thing that gets resolved in bilateral meetings. There’s a temptation, Keynes noted, to read the current stalemate as a new normal, but she was skeptical.

“We used to be in a kind of hegemonic system where you didn’t need stalemates—there was no point in trying to poke the U.S. because it would just, you know, smash you to smithereens,” Keynes said. “Now we’re in a world in which wrestling matches are more common because it’s not obvious who is the dominant actor.”

“And that so that is a situation,” Keyes continued, “or a setting that lends itself to more stalemate-like situations.” But Trump knows one thing after the last several rounds of talks with China: “The U.S. is working extremely energetically to to get rid of the rare earths chokehold.”

“This is the new world,” Keynes said. “It’s not going away. We’re going to be in this for a long, long time. This is not a President Trump thing.”

How to Win a Trade War is out now from Simon & Schuster.