Our So-Called Foreign Policy: Why Mattis Shouldn’t be Missed

Tags

alliances, allies, America First, Defense Department, defense manufacturing base, deterrence, free-riding, globalists, James Mattis, nuclear war, Our So-Called Foreign Policy, steel tariffs, Trump

Boy! Go away for a few days around the holiday season and the whole world seems to turn upside down! (Especially during the Trump era?) For the purposes of this column, I’m thinking of the resignation of Defense Secretary James Mattis and his “Don’t forget to write” replacement by the President – although of course adding to the sense of tumult have been Mr. Trump’s angry tweets about the Federal Reserve and the stock market swoon that has partly resulted.

Not that the reactions of the nation’s chattering classes to the Mattis departure haven’t been entirely predictable. A prominent figure publicly chides the President, and he’s practically canonized by establishment politicians and their Mainstream Media spokespeople. The more so if he’s a former Trump official. (Google, e.g., “Tillerson, Rex.”) And major histrionics are always added when the dearly departed have been designated the “adults in the room” – i.e., familiar, experienced (and therefore automatically venerated) policy hands who supposedly are the last lines of defense against Trump-induced catastrophes.

But even at a time when Trump Derangement Syndrome has become epidemic, the Mattis-related lamentations stand out for numerous reasons. First, although Mattis’ performance as a battlefield commander has been outstanding – and deserves the respect and gratitude of all Americans – show me the evidence that he’s been a great or even OK leader of the Pentagon. Spoiler alert: There is none. In fact, in two important respects, Mattis has underwhelmed, at best.

He’s displayed absolutely no interest in strengthening the nation’s domestic defense manufacturing base – a vital challenge considering how dependent such production has become on parts, components, and material made in China, an all-too-likely adversary. In fact, Mattis badly failed the President during the early stages of developing the administration’s steel tariffs. In the Defense Department’s official memo commenting on the President’s decision (sought as part of an interagency review undertaken before the final announcement), Mattis never told his boss that Canada is officially considered part of the U.S defense manufacturing base. So levies on Canadian steel justified by national security considerations arguably made no sense.  (Unfortunately, the full Mattis memo is no longer on-line.)

Nor is there any evidence that the Defense Department under Mattis made any progress in reducing its levels of waste, fraud, and abuse. What we do know now based on an official report is what everyone knowledgeable about the subject has known for decades: the scope is massive. Mattis deserves credit for approving this report – the first audit the Pentagon has ever conducted of its own (even more massive) operations. But he served for nearly two years, and the department continued to be poorly run in too many respects.

Mattis’ performance was even less impressive as a strategist. For all his expertise in fighting wars and otherwise deploying forces once the relevant decisions have been made, he’s demonstrated no expertise in helping to figure out what conflicts and threats the nation should prepare for and what interests are essential to defend or promote. And that’s a big problem because, although the Secretary of Defense is far from the only presidential adviser responsible for providing input in the periodic process of developing the country’s official foreign policy strategy, he’s one of the principals.

Worse, everything we know about Mattis’ contributions – the essence of which was made unmistakable in his resignation letter – shows that he remained doggedly devoted to the globalist dogma that the key to America’s security and prosperity is maintaining and advancing the current international order, and especially the nation’s core military alliances. Viewed in a vacuum, these views are eminently defensible. Viewed the (essential context) of recent and present circumstances, they’re a formula for continuing to coddle chronic economic protectionists and defense free-riders, and for open-ended military involvement in hopeless tar-baby regions like the Middle East. At worst, they’re a recipe for exposing the United States to needless military risks precisely because allied free-riding (in the form of pitifully inadequate spending on their own conventional military forces) despite burgeoning aggressiveness from China and Russia has put a growing premium on America’s nuclear forces to maintain deterrence.

Which leads to the greatest irony surrounding the role of the globalist advisers President Trump originally hired and those he still retains: The globalist establishment keeps propagating the meme that they’ve been all that have been preventing a hair-brained chief executive from blowing the entire world to kingdom come. But the greatest dangers (indeed, the only dangers) that the country could be drawn into a nuclear conflict come from the globalist policy of seeking to protect allies or regions marginal to U.S. interests (South Korea, the new Baltic and East European members of NATO) from adversaries that can or will soon be able to hit the American homeland with nuclear weapons.

Only somewhat more defensible is the globalists’ determination to protect South China sea lanes from Chinese designs even though their favored trade policies have greatly enriched and strengthened China for decades – and even though most of the local beneficiary economies have victimized America’s with their mercantile trade policies.

In the process, Mattis and his fellow globalists have either utterly neglected or arrogantly savaged the kinds of America First alternatives that the President has rhetorically championed (though, as argued comprehensively in this article, not carried out consistently). In other words, he has portrayed as impractical or ignorant – along with reckless – a far superior strategy that views America’s strength, wealth, and favored geographic position as the best guarantors of its safety and well-being.

That’s the real reason for the doom- and gloom-saying sparked by Mattis’ departure. And why I wish he had never been appointed in the first place.

Advertisements

Our So-Called Foreign Policy: Fair-Weather U.S. Allies?

Tags

alliances, allies, China, East China Sea, Eastern Europe, France, Germany, globalism, internationalism, Japan, NATO, North Atlantic TYreaty Organization, North Korea, nuclear deterrence, nuclear weapons, Our So-Called Foreign Policy, Pew Research Center, Russia, South Korea, Soviet Union, United Kingdom

Establishment analysts and commentators have looked at the results of the Pew Research Center’s recent survey on overseas attitudes towards U.S. foreign policy under President Trump and decided that their most important findings are that his America First approach is costing America valuable influence on the global stage.

Even if you don’t find those conclusions transparently self-serving – since the vast majority of these analysts and commentators are staunch supporters of a more traditional globalist or internationalist approach – consider this alternative interpretation: The Pew survey strongly suggests that the globalist strategy, which has been in place for decades, has failed miserably in a crucial respect. Even though its core principles have required that the United States accept enormous cost and risks (including nuclear) on behalf of allies all over the world, the Pew researchers have found that even under President Obama – a pretty run-of-the-mill globalist – the populations of these same allies had little appreciation for these American burdens.

For me, the most glaring example is South Korea. As RealityChek readers know, for years I’ve been noting that the rapid recent progress of North Korea’s nuclear weapons program means that the United States’ longstanding commitment to use nuclear weapons if necessary to defend the South from a northern invasion or simply to deter such an attack is now qualitatively more dangerous than in the past. For if North Korea has not already developed the means to launch a nuclear strike that could take out an American city – or two or three – it’s not far from achieving that goal.

The North’s progress was glaringly obvious in 2013, when Pew last asked South Koreans if they believed that “In making international policy decisions, the U.S. takes into account the interest of countries like ours a great deal/fair amount.” Yet that year, only 36 percent of South Koreans answered “Yes.” This year, only 24 percent of South Koreans gave that answer.

Japan is also protected by an American nuclear umbrella – at least in principle. As with the case of South Korea, it hosts large American military forces whose presence aims to bolster the credibility of that promise. And North Korea has actually fired missiles over Japanese territory – meaning that the threat it poses to Japan and to those U.S. forces is anything but merely theoretical. (If only because the American forces in Japan that defend the islands are supposed to help their comrades-in-arms if war breaks out on the Korean peninsula.) Japan is also alarmed by Chinese encroachments in the East China Sea.

But in 2013, only 38 percent of Japanese agreed that American foreign policy takes their interests into account even a fair amount. This year, that number is down to 28 percent.

The security situation in Europe is not nearly as fraught. But Russia has certainly taken actions that arguably threaten the security of new members of the North Atlantic Treaty Organization (NATO) that used to be part of either the old Soviet Union or the Soviet bloc. And as NATO allies, these countries are also entitled to nuclear protection from the United States even though their fates had never before been considered vital American interests and even though Russia retains nuclear forces more than large enough to devastate the United States many times over.

Yet although the new NATO members either border Germany (like Poland) or are located pretty close by, and even though Germans presumably would not want to see Russia reestablish dominance, even in 2013, only 50 percent of Germans believed that Washington takes their interests significantly into account in its foreign policy. The 2018 figure? With Russia at least as menacing? Nineteen percent. And the Germans are anything but outliers, as Pew found roughly the same trend in France and in the United Kingdom (although the share of their populations detecting any meaningful American regard for their interests in 2013 was a good deal lower than in Germany – just 35 percent and 40 percent, respectively).

A common retort by globalists and by allies is that allied populations have no reason to be especially grateful to the United States because these alliances serve crucial American interests, too. But what they forget is that populations (especially from countries whose governments have been champion security free-riders) that don’t believe the United States cares much about them aren’t likely to be populations likely to support the American military when push comes to shove in their regions – as opposed to calling for some version of accommodating the aggressors.

Not that I’m criticizing allied populations. At least in their initial stages, any conflicts will take place almost exclusively on their territories. And P.S. – these kinds of strains were troubling alliance relations for decades before Trump. But the by the same token, the Pew results underscore two truths about U.S. alliances that should be disturbing globalists more than ever.

First, the nuclear risks they still appear to be entirely satisfied with are being run for stakes (the security of relatively small, unimportant countries, as opposed to Japan and the entirety of Western Europe) that are less rationally justifiable than ever. And second, when the United States needs to lead the resistance to aggression, it may have fewer followers than ever.

Our So-Called Foreign Policy: What’s Really Wrong with Trump’s NATO Policies

Tags

alliances, allies, America First, Crimea, Eastern Europe, Korea, NATO, North Atlantic treaty Organization, nuclear deterrence, Our So-Called Foreign Policy, Russia, Soviet Union, The National Interest, tripwires, Trump, Ukraine, Vladimir Putin

As this year’s summit of the leaders of the North Atlantic Treaty Organization (NATO) begins, it’s nothing less than vital for Americans to understand two points about President Trump’s approach to the Atlantic alliance:

First, the President’s globalist critics are right in pointing out that Mr. Trump is thoroughly, and even dangerously, mishandling U.S. relations with NATO.

Second, these critics completely misunderstand why the President is off-base.

The heart of the globalist case against Trump-ian NATO policies goes generally like this: Mr. Trump drastically underestimates the contribution made by the alliance to U.S. national security interests not only in Europe but around the world. Especially worrisome are his threats to reduce America’s military presence in Europe if other NATO members don’t boost their defense budgets to agreed on levels, and the chance that he could strike some kind of a deal with Russian leader Vladimir Putin at their upcoming meeting that would in some way accept Moscow’s annexation of Crimea and designs on Ukraine. The result would be the kind of appeasement that could encourage more Russian aggression against former satellites of the old Soviet Union that are NATO members today, and against the Baltic states, other new NATO members that were part of the Soviet Union proper after being taken over in 1940.  

Yet this critique fundamentally misreads the Trump NATO strategy – at least as it stands this week. Many of the latest alarm bells were set off by a Washington Post report describing a Pentagon investigation of “the cost and impact of a large-scale withdrawal or transfer of American troops stationed in Germany” – where most U.S. forces in Europe are deployed.

Although semi-denied by the Defense Department, the alleged finding seemed consistent with Mr. Trump’s suggestions that if the NATO allies don’t pick up more of the alliance’s military spending burden, America’s commitment to their defense might weaken. (Interestingly, a similar statement was made earlier this year by Defense Secretary James Mattis, who is generally considered a national security traditionalist who values America’s alliances much more than the President).

But widely overlooked in the latest trans-Atlantic tumult are Mr. Trump’s actions – which should speak louder than words. And many of them were nicely summed up in this Associated Press article:

“Notwithstanding Trump’s grumbles about America shouldering the defense burden of Europe, his administration plans to boost spending to support it.

“In the aftermath of Russia’s annexation of the Crimea region of Ukraine in 2014 and its subsequent military incursion into eastern Ukraine, the Pentagon ramped up joint exercises in eastern and central Europe and spent billions on what it calls the European Deterrence Initiative aimed at Russia. After spending $3.4 billion on that initiative last year, the Trump administration has proposed boosting it to $6.5 billion in the 2019 budget year.”

It’s bad enough that a U.S. decision to increase the American military footprint in Europe will completely kneecap the Trump administration’s efforts to push more allied military spending by convincing the allies that continued free-riding and foot-dragging will carry no cost. Far worse is the focus of this new U.S. spending on beefing up the American/NATO presence in Poland and the other new alliance members in Eastern Europe. Indeed, that article about studying cutting American forces in Germany reported that one option being considered was moving some – presumably permanently – to Poland, which borders Russia.

The Poles and the other countries once under the Soviet thumb are understandably heartened by these possible moves. Troublingly, however, this apparent Trump gambit indicates that he’s just as ignorant about the paramount reason for overhauling U.S. NATO strategy as his globalist critics: Because of the alliance’s expansion to cover so many countries so close to Russia, because Moscow has recently been responding so sharply, and because NATO legally requires the United States and all other allies to rally to the defense of any NATO member under attack, the chances have risen that America could become embroiled in a war with a nuclear-armed Russia.

And worse still, the more American units are stationed in Europe, and the more permanent these deployments (so far, they’re periodically rotated in and out), the greater the odds that such a conflict will go nuclear – because defending Russia’s neighbors with conventional forces alone will prove impossible, and because the American forces will become a tripwire whose defeat or impending defeat would generate heavy pressure on any U.S. President to respond with a nuclear strike that would risk Russian retaliation.

A resulting, and tragic, irony: The security of Germany and the countries of Western Europe have for decades been considered vital American interests, primarily because their industrial and technological strength and potential could dramatically affect the balance of global power. The security of the countries to the East have never been considered vital American interests, partly because they have never remotely possessed these capabilities or potential, and partly because geography will always make them fatally vulnerable to Soviet or Russian ambitions.

So the possibly emerging Trump position amounts to assuming greater risks (including of nuclear attack on the American homeland) for assets of much less value.

As I’ve written, the continuation of status quo American policies on the Korean Peninsula poses similar nuclear risks to protect an ally – South Korea – that’s certainly impressive economically but hardly decisive to U.S. safety or prosperity.

I’m still firmly on board with President Trump’s declared intention of replacing longtime globalist foreign policies with an America First approach. But like everything else in life, this transformation can be carried out badly and well. Without a major course change, Mr. Trump’s policies could easily wind up leaving the nation with the worst of both international strategies.

P.S. If you’re interested in seeing how I would deal with the above dilemmas, check out my new article in The National Interest – on what a genuine America First foreign policy would look like, and why it would be far better than its predecessor, or the strange hybrid the Trump administration has created to date.

(What’s Left of) Our Economy: With Allies Like These….

Tags

allies, Asia, auto tariffs, China, Europe, Germany, intellectual property theft, Japan, Robert J. Samuelson, South Korea, steel tariffs, tariffs, The Washington Post, Trade, Trump, value-added taxes, {What's Left of) Our Economy

Nationally syndicated Washington Post columnist Robert J. Samuelson intended this week’s essay to show how foolish, and possibly disastrous, President Trump’s emerging new trade policy will be – including for the national security goals the administration has set. That’s why it’s so ironic that his column instead unwittingly revealed how thin a reed the nation’s long-time security strategy has been, and nowhere more so than in the importance it’s assigned to its long-time security alliances in Europe and Asia.

Samuelson’s piece conveys a warning that the administration’s trade policy moves so far are on course to undermine national security in two related ways: by ignoring the alleged imperative of enlisting its major allies in a multilateral campaign to discipline predatory Chinese intellectual property and related trade and industrial policies that need curbing; and by actually antagonizing these countries and thereby jeopardizing the very existence of those alliances.

This argument conveniently overlooks several big trade and security fundamentals. First, globalist pre-Trump American leaders themselves have insisted that they’ve long tried to create multilateral pressure on China’s rogue economic behavior for years before Mr. Trump became president – though it’s unclear how serious these efforts were. For example, the Trans-Pacific Partnership (TPP) trade deal largely touted by the Obama administration for its potential to curb China’s influence contained a back door for numerous imports with major levels of Chinese content.

Second, it’s anything but obvious that U.S. alliances strengthen American security on net. As I’ve pointed out frequently (including this past week), they continue to expose the American homeland to the risk of nuclear attack even though the Soviet-style kinds of global threats their nuclear guarantees were intended to counter have been (literally) gone for nearly three decades. Moreover, as has been widely reported, the militaries of many of these allies have deteriorated so markedly that their potential as force multipliers for the United States is open to serious doubt.

But Samuelson’s analysis makes no sense even if these considerations are put aside. The key is in his own portrayal of leading U.S. allies – which he describes as livid about recent American steel tariffs, and sure to become even angrier is levies are imposed on their motor vehicle exports to the United States. Indeed, he worries, major auto-exporting countries like Germany, Japan, and South Korea could well become so upset with the United States that they not only retaliate in kind, but unhesitatingly move to supply China with whatever high tech goods and services Washington embargoes or restricts.

In other words, these allies would redouble their efforts to feed the Chinese beast even though all of them face China trade, technology, and/or national security threats of their own, and even though the United States continues to provide them with crucial military protection – including, in the case of Japan and South Korea, from Chinese designs. But these same allies were supposed to be amenable to cooperating with Washington to deal with China? Even more revealing, the allies would choose to intensify confrontation with the United States instead of (finally) proposing concrete steps to deal with the China problem over which they profess concern.

And they would display no interest whatever in meaningfully removing the formidable obstacles they have created to block American automotive exports. (The recently reported German auto-makers’ proposal to eliminate all tariffs in the sector on both sides of the Atlantic would leave in place towering European value-added taxes – e.g., 19 percent in Germany – on motor vehicles and most other imports. No such U.S. equivalent exists either for autos or for light trucks and sport utility vehicles.)

No one can fault these European and East Asian countries from acting in their own perceived interests – or even for trying to have their cake and eat it, too. Indeed, for decades, globalist American foreign policies have encouraged and actively enabled precisely this kind of free-riding. What these countries should be faulted for is posing as allies (let alone allies with justifiably hurt feelings), and worse, as paragons of sobriety and free market values nobly resisting a wrecking ball of an American President. As for any Americans and U.S. leaders who keep fooled by this act for so long and, more important, failing to take the policy hints – shame on them.

(What’s Left of) Our Economy: Martin Wolf Whiffs on the Trump Tariffs

Tags

allies, aluminum, EU, European Union, Financial Times, General Motors, Martin Wolf, Mary Barra, national security, steel, tariffs, Trade, Trump, World Trade Organization, WTO, {What's Left of) Our Economy

I hate to go after the Financial Times‘ Martin Wolf, because he’s definitely one of the world’s smartest and most responsible economics commentators. Unfortunately, his March 6 column on the Trump tariffs fell so far short of his standards – and in fact simply parrots so much wrongheaded and/or simplistic trade-related conventional wisdom – that a response is essential. Let’s take his main arguments seriatim.

Wolf is apparently upset that the tariffs are “explicitly intended to last a long time.” But what could make more sense? If the aim is to spur more American steel and aluminum output, which requires major capital investments that need time to pay off, short-term tariffs, or tariffs with a publicized termination date, are bound to fall way short of their mark. The former will naturally scare off investors that simply have the requisite time horizon; the latter will additionally tell potential capital sources and foreign steel and aluminum exporters exactly when they can resume dumping subsidized product.

Wolf believes that the tariffs will so raise the costs of steel- and aluminum-using U.S.-made products that these industries and their workforces, which vastly outnumber those of the metals-makers, will suffer major losses of global competitiveness. In making this claim, he both overlooks the relatively small steel and aluminum content of many of these products, and oddly dismisses any possibility that these businesses will find ways to offset any notable input price increases with greater efficiencies elsewhere in their operations.

I say “odd” because that’s exactly what conventional economics tells us will happen – at least with companies determined to stay in their respective businesses. It’s one main reason why productivity growth exists at all. It’s also at the least significant that no less than General Motors Chair and CEO Mary Barra has stated that that’s exactly what her company will do: “We would look to find offsets and efficiencies to offset that [higher steel prices] and not have to pass it on to the customer.”

Wolf worries about the spread of what he admits are trade actions confined to steel and aluminum because so many American trade partners will retaliate. I was waiting for him – as a major supporter of free trade – preemptively to scold these countries for not realizing that theory holds that the best way to respond to tariffs is by compensating losers, not by retaliating. But it doesn’t appear to think that this venerable maxim applies outside the United States.

Wolf predicts that this retaliation will take the form of World Trade Organization  (WTO) challenges and safeguards “to forestall diversion of imports on to their markets.” But because the global steel market is a single integrated market (like so many other markets in this era of extensive globalization), such country-specific measures will fail to prevent diversion as completely as have similar past U.S. Measures. That’s probably why the European Union, for example, has hinted that it won’t wait for the WTO Good Housekeeping Seal for any retaliation. Which of course would be illegal according to WTO rules.

Wolf regurgitates the argument that the sweep of the Trump tariffs will hit “friends and allies” – belying the claim that they’re based on national security considerations. As I’ve noted, though, many of these supposed friends and allies have long been directly or indirectly helping make sure that an outsized share of Chinese-spurred global overcapacity in steel and aluminum winds up being sent to the United States. With allies like these….

Wolf expresses bewilderment that the United States would seek protection for its steel and aluminum industries because output in both has been “stable” since roughly 1990. But in the business world, that’s a euphemism for “no growth since roughly 1990.” Does that scream “competitiveness” to you? Moreover, Wolf overlooks the loss of global and U.S. market share for both sectors – not normally a sign of companies or industries with bright or even viable futures. (See here for the steel data and here for the aluminum figures.)

Wolf uses tariffs as his main measure of whether, as many trade policy critics argue, the United States really is the world’s least protectionist major economy. But nowhere in his article does the term “non-tariff barriers” appear – a shocking omission given their prevalence and strong growth as global negotiations have reduced tariff rates worldwide.

Finally, Wolf alludes to the canard that America’s national savings rate is overwhelmingly responsible for its bloated trade deficits. In fact, the relationship between the trade and broader current account balances on the one hand, and the savings rate on the other is a mathematical identity. As such, it says nothing whatever about causation – which could easily flow the other way.

It’s understandable that Wolf doesn’t like the Trump tariffs per se – I’ve been critical of them in some respects myself. But the scornful tone of his article, and its utter failure even to consider obvious rejoinders (much less address them) indicates that something deeper is at work here: One of our most thoughtful and knowledgeable economics analyst has come down with a bad case of Trump Derangement Syndrome.

(What’s Left of) Our Economy: The Case for Trump’s New Metals Tariffs

Tags

alliances, allies, aluminum, China, inflation, manufacturing, overcapacity, steel, subsidies, tariffs, Trade, trade law, Trump, World Steel Association, World Trade Organization, WTO, {What's Left of) Our Economy

President Trump has announced his decision to impose tariffs on U.S. imports of steel and aluminum – cue the trade war hysteria. And the national security hysteria. And the inflation hysteria. Here are some talking points I hope the administration will feel free to steal as it defends the decision in the days leading up to the release of the final tariff plan:

>Many countries have declared their intention to retaliate against the American tariffs with higher barriers to U.S. exports. Curiously, they are overlooking the Chinese government-subsidized overcapacity at the root of the long-time distortions in world steel and aluminum markets.

>Many of these countries want the problem tackled multilaterally. But the World Trade Organization (WTO) has failed to stem this overcapacity (or deal effectively with many other forms of Chinese trade and broader economic predation), and a G20 forum specifically addressing the steel issue has produced nothing since its founding in December, 2016.

>Although major steel-producing powers like the European Union have imposed their own steep tariffs on shipments from China, the global glut has continued. One reason may be that, since the global economic recovery took hold in 2010, according to World Steel Association data. the United States has been the major steel producer that has suffered by far the greatest loss of global production share by volume. (See this post of mine for the 2010 figures and the Steel Association’s latest report for the most recent – January, 2018 – figures.) And as of the most current World Steel Association data (2016), the United States is also the steel producer with the highest steel trade deficit by volume (21.7 million tons). 

>As a result, charges that American steel tariffs in particular will jeopardize the rules-based global trade system seem to be arguing that this system requires the United States to remain as the world’s dumping ground for government-subsidized steel.

>A much more constructive response from America’s trade partners would be finally getting serious about shutting down China’s overcapacity and placing market forces back in the saddle for global steel pricing. The Trump tariffs should be seen as a signal that the United States will no longer accept world steel trade patterns that treat the United States as the fall guy, and should therefore act as a spur to achieve genuinely meaningful multilateral results.

>The above gaming of global steel trade by so many American trade partners also explains the need for the kinds of sweeping measures made possible by the national security-oriented Section 232 of U.S. trade law, rather than the narrower curbs required by, say, the countervailing duty statutes.

>Fears have been expressed in the U.S. foreign policy community, and by the Trump administration’s Defense Department, that certain tariff schemes may needlessly harm America’s relationships with key security allies. Those voicing such concerns should also explain why countries that would permit these U.S. measures to undermine alliance relationships should be seen as reliable partners when overseas crises erupt.

>Tariff opponents contend that America’s use of an allegedly bogus national security rationale for the curbs will open the doors for other members of the WTO to use equally specious justifications for their own tariffs on numerous products. These opponents seem to forget that most of the world’s major economies, which rely heavily on export-led growth resulting from large trade surpluses, so far have encountered little difficulty in protecting their own domestic markets via a wide range of both tariff and non-tariff trade barriers.

>New national security rationales for new tariffs will be especially suspicious if used by the numerous American security allies that have been free-riding on U.S. defense guarantees for decades – and skimping on their own defense spending. These allies include Germany, Japan, South Korea, and Canada.

>Tariff critics also insist that the American economy will suffer major harm from foreign retaliation. They seem – oddly – convinced that U.S. trade partners that rely heavily on net exporting to the United States for their growth have nothing to fear from further the American trade restrictions that may result. Will these countries really launch trade attacks on one of their best customers?

>Tariff opponents focusing on economic impacts argue that the measures will increase the cost of a key American manufacturing input, and reduce the competitiveness of domestic steel-and aluminum-using industries. They seem to fear that these industries cannot become or remain globally competitive if such inputs are priced via free market mechanisms, rather than kept artificially cheap due to foreign government decisions.

>These economically focused tariff opponents also seem to believe that the current U.S. economy is one characterized by companies that enjoy considerable pricing power. Given inflation that has long undershot the Federal Reserve’s target, that’s a difficult argument to understand.

>In addition, those with an economic focus appear unconcerned about the prevalence and spread of government interventions in trade flows not only in steel, but in a wide variety of traded goods. If foreign governments conclude that they can subsidize and dump two key American industries out of existence, why would they stop with steel and aluminum? How can a growing presence of foreign government-subsidized goods (and services) help strengthen free markets in the United States and enable Americans to reap their maximum gains? And how can such growing foreign intervention help the global economy as a whole progress toward reaping the maximum gains of unfettered trade?

Over to you, Mr. President!

Our So-Called Foreign Policy: Why America’s Alliance Strategy Can’t Have it All

Tags

alliances, allies, burden sharing, China, defense spending, Financial Times, Germany, James Mattis, Japan, NATO, North Atlantic treaty Organization, North Korea, nuclear war, Our So-Called Foreign Policy, Russia, smothering, South Korea, Trump

Decades ago (literally!) I came up with an insight that’s stood the test of time pretty well. When my main professional focus was American foreign policy, I began realizing that the best way to describe the U.S. approach to its major security alliances with East Asian and European countries was to call it a “smothering strategy.” That is, American leaders were trying not only to protect Japan and Western Europe specifically from communist aggression. They were also trying to make sure that those critical regions never exploded into major war again – and principally, that Germany and Japan never resumed their roles as aggressors.

The characteristic U.S. solution? Washington would try to smother these German and Japanese impulses by removing their need to conduct any kind of independent foreign policies of their own in the first place. That’s why the United States pledged to take care of both their national security interests (with dangerous nuclear defense commitments) and their economic interests (by opening its economy much wider to their exports than vice versa). As a result, for decades, Germans (and other Europeans) and Japanese could avoid the expenses of maintaining big military establishments and concentrate tightly on the peacetime pursuits of life, liberty, the pursuit of happiness – not to mention building great wealth.

How good was this insight? To me, the proof of the pudding was America’s determination to preserve these alliances almost unchanged even after the Cold War ended, the Soviet Union disappeared, and China had not yet launched a drive to boost its influence in East Asia. To put it bluntly, U.S. leaders were still terrified that, if they were forced to face the world on their own once more, the Germans and Japanese would go bonkers again.

But this past week came some evidence that the smothering strategy is still firmly in place – despite the election of an American President who has complained loudly as a candidate as well as in office about how these arrangements are inexcusable rip-offs of the American public and especially taxpayers. At a big national security conference held each year in Germany, Trump administration officials expressed alarm at the prospect that some European initiatives to boost military spending that have barely advanced past the talking stage could might result in European forces at least sometime operating independently of their alliance with the United States – the North Atlantic Treaty Organization (NATO) – and even excluding America.

According to a Financial Times account of the meeting, U.S. Defense Secretary James Mattis reacted by insisting that these European Union “defence plans…enhance Nato’s common defence rather than detract from it. And he put down an important marker: there was, he said, a clear understanding that common defence is a Nato mission that belongs to Nato ‘alone’.”

In other words, the Trump administration has now fallen into both of the traps that ensnared U.S. alliance policy during the Cold War. It has assured the allies that its commitment to their defense is absolute – including the risk of fighting a nuclear war on their behalf – thereby gutting any incentives for them to stop “free riding” on the United States militarily and bearing a greater share of the defense burden. And it has made clear that, although it wants the allies to assume more responsibilities for their own defense, it opposes the allies gaining any more control over their own defense. Instead, the United States must remain firmly in charge.

As a foreign policy realist, who believes that national interests are much more important than particular alliances, and can clash with the preservation of these alliances, I don’t blame the Trump-ers for wanting to have their cake and eat it, too on this score – i.e., more allied resources to use as Washington wishes. Nor do I blame the Europeans for wanting as much defense assistance from Americans as they can get while continuing to skimp on their military budgets.

But as an American, I wish the administration would recognize two fatal flaws in this alliance strategy status quo. The first is the un-realism of straining to freeze alliance structures in place when the common enemy that represented their raison d’etre has been gone for nearly thirty years. The second entails the needless dangers created by continuing to provide nuclear guarantees – and the tripwire forces needed to draw it into Armageddon – for these allies when not even the partial revival of Russian and Chinese threats (along with North Korea’s development of ever more advanced nuclear weapons) has fostered consensus in how to handle them.

Of course, dissolving these alliances will entail risks. But the risks of trying to square these circles look far greater. And when considering the nuclear threats they now pose (from those North Korean as well as Chinese forces that are much more capable of credibly threatening the United States with nuclear attack, along with Russia’s Cold War holdover arsenal), they look harder to justify than ever.

Our So-Called Foreign Policy: More Upside-Down U.S. Thinking on the Korea Crisis

Tags

alliances, allies, globalism, North Korea, nuclear war, Our So-Called Foreign Policy, South Korea, The Wall Street Journal, tripwire, Trump, Walter Russell Mead, Winter Olympics

It was great to see earlier this month that Walter Russell Mead was chosen by The Wall Street Journal to be its regular foreign affairs columnist. Mead has often (though not always) been an important voice for a broadly realist approach to American foreign policy (meaning one that understands the need to set at least some finite priorities because not all good things are possible simultaneously). He’s also been a serious and insightful student of U.S. diplomatic history. Therefore, his new position seemed to guarantee that some badly needed diversity would be added to a Mainstream Media pundits lineup that has long been completely dominated by globalists of the left and right. (The Journal has specialized in the latter.)

That’s why it was so disappointing to see that in his recent, second Journal offering, Mead has lapsed into the thoroughly bizarre (but characteristic) globalist habit of viewing America’s security alliances as mattering more to the United States than to the allies.

The passage in question comes about a third of the way in. According to Mead, the real diplomatic winner of the current Winter Olympics in South Korea is not, as widely reported, Kim Yo Jong, the visiting sister of North Korean dictator Kim Jong Un. Instead, it was South Korean President Moon Jae In. That’s a perfectly reasonable conclusion. So was the first part of Mead’s explanation: “Mr. Moon got a political boost from Ms. Kim’s visit and the appearance of a thaw between the Koreas, but he avoided the backlash from appearing naive or overeager.”

It’s the second part of the author’s analysis that has gone off the deep end: Moon “also reminded the Americans that South Korea cannot be taken for granted; without Seoul’s support, the Trump administration’s North Korea policy is unsustainable.”

Actually, in a narrow sense, Mead makes a novel and (disturbingly) convincing case for this proposition: The campaign to force North Korea to the nuclear bargaining table

“has been Mr. Trump’s most effective diplomatic and political effort to date. The administration has moved B-1 bombers and F-35 fighters to the Korean Peninsula during annual military exercises. It has reached out diplomatically to countries ranging from China to Indonesia. It has coordinated speeches by officials at the Pentagon, State Department and White House to keep the government on message.

“This is the sort of orchestration that the Trump administration, and the president in particular, is supposed to be too undisciplined to carry out. The relative success of the North Korea process suggests that Mr. Trump and his staff may be more capable than critics expected in operating the complex machinery of American power.”

It’s certainly possible that, at least in an unwitting way, the President and his aides place precisely this value on their North Korea strategy. But if so, the administration would be prizing image-making over elements of strategy that are not only fundamental, but existential – and needlessly exposing the United States to the risk of nuclear attack in the process.

For even if the Trump-ers are clinging to the appearance of success or competence in their North Korea policy, the overriding reality is that American power right now is the only obstacle currently blocking a North Korean military conquest of the South, or a South Korean future dominated by endless blackmail from the militarily superior North.

Consequently, although a successful American North Korea strategy could burnish the Trump administration’s resume, and possibly shore up its domestic political support, for South Korea, it’s literally a matter of national survival at worst and of genuine independence at best.

Unfortunately, moreover, Mead’s column also explicitly makes the broader and completely ludicrous globalist argument that allies like South Korea enjoy at least as much leverage in these relationships as the United States. And as a result, he too overlooks the yawning asymmetry in the respective sets of national interests involved.

Hence his contention that crucial to any diplomatic effort to denuclearize North Korea is “the need to keep America’s alliances united. The Winter Olympics kerfuffle should remind the White House that maintaining coordinated policies with Mr. Moon will be vital in the months and years to come.”

Far more important to recognize, however – and especially given the emergence of nuclear risk to the U.S. homeland – is that by virtue of geography and military power, the United States boasts inherent options in the Korean crisis that South Korea lacks. And the principal such option is washing the nation’s hands of this entire mess.

So if any party to this relationship needs to avoid taking the other for granted, it’s South Korea. All the more so because, as I’ve written, the “tripwire” mission of U.S. forces in South Korea aims to ensure that, in the event of war, Washington comes to the South’s rescue with nuclear weapons – and before too long could thereby trigger a successful North Korean nuclear strike on an American city.

That’s not to say that South Korea lacks the right to take the lead in Korean Peninsula diplomacy, or any legitimate interests in doing so. It merits exactly these rights and interests, precisely because no country outside the peninsula has remotely comparable stakes in a peaceful resolution.

But by the same token, the United States has the right to insist that any country expecting America to run catastrophic risk on its behalf pay a price in the form of deferring to its judgment. And for the sake of the American people’s security, their leaders have an overriding obligation to remind such allies that, if they’re unhappy with these terms, they will be more than welcome to handle whatever threats they face on their own.

Making News: Back on Nationally Syndicated Radio on Trump Tariffs — & More!

Tags

alliances, allies, burden sharing, defense, Gordon G. Chang, IndustryToday, John Batchelor Show, Making News, manufacturing, tariffs, Trade, Trump, wages

I’m pleased to announce a return engagement on John Batchelor’s nationally syndicated radio show tonight. The segment, slated to start at 10 PM EST, will deal with the new tariffs President Trump has imposed on imported solar panels and washing machines, and whether these steps will usher in a new era of U.S. trade policymaking.

You can listen live at this link to what’s sure to be a great discussion involving John, co-host Gordon G. Chang, and me. And as usual, I’ll post a podcast of the interview as soon as one’s available.

In addition, IndustryToday.com just posted my recent RealityChek item on wage stagnation in U.S. manufacturing. Click here to see it.

Moreover, that article referred to in yesterday’s Making News item about alliance defense burden-sharing can be accessed for free after all. Just click here.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Our So-Called Foreign Policy: The Establishment Goes Farther Off the Deep End on North Korea

Tags

alliances, allies, China, Cold War, deterrence, James Jeffrey, Japan, North Korea, nuclear war, nuclear weapons, Our So-Called Foreign Policy, Russia, South Korea, Soviet Union, The Atlantic, Trump

James Jeffrey’s new post in The Atlantic on the North Korea nuclear crisis has so much to commend it. (Yes, there’s a “but” coming, and it’s enormous, but let’s give him his due.)

The former U.S. Ambassador to Turkey and Iraq valuably reminds readers of the dangers of assuming – as per the latest conventional wisdom – that North Korea’s motives for developing nuclear forces potent enough to threaten the American homeland are purely defensive. This confidence, he notes, may be convenient for justifying a call for the United States to clear the way for a negotiated solution to the crisis by backing off its longstanding insistence on Pyongyang’s denuclearization. But no one aside from Kim Jong-un himself can have any confidence in assessing what’s inside his head.

As a result, Jeffrey also recognizes that the nuclear deterrence strategy that helped prevent Soviet and Chinese aggression during the Cold War (and so far seems to be helping curb Russian and Chinese expansionism nowadays) is far from guaranteed to work against a leader with a history of erratic and even violent behavior, and who is heir to a regime with a similar history – including absorbing enormous sacrifices to “reunify” the Korean peninsula under its rule. (At the same time, Jeffrey seems to undercut these arguments at the end by calling the denuclearization goal unreasonable, and signaling his support for a compromise that would leave the North with “some nuclear capability” in exchange for “a ‘temporary’ diplomatic solution that stops North Korean development of systems that can strike the U.S.”

In addition, Jeffrey forthrightly explains that both the Cold War deterrence strategies and their latter-day Korean counterpart depended on a gamble that involved putting the U.S. homeland at risk of nuclear attack, and denying an American president any real choice but to push the nuclear button that would surely bring this about.

Finally, the author understands that U.S. security interests could be powerfully served – and deterrence on the Korean peninsula strengthened – by encouraging South Korea and Japan to develop their own nuclear weapons (although he never addresses the objection that neither country would likely go to these lengths as long as they can free-ride on the American defense guarantee).

So Jeffrey deserves great credit for going beyond conventional foreign policy thinking in many important respects. But in the most important respect by far, he’s solidly inside the consensus – which astonishingly, and let’s face it – derangedly – believes that there is any objective that the United States could achieve that’s worth any significant risk of nuclear attack on one or more major American cities.

Specifically, the author believes that North Korea may indeed have aggressive aims, and that the nuclear forces it will soon possess will be powerful enough to keep the United States on the sidelines if he attacks the South for fear that he will strike at the American territory. As a result, he believes that “the possibility of military action against North Korea could be understood not as a ‘good thing,’ but as the ‘least bad.’”

And although he does not call on the Trump administration to launch a “preventive war” to take out the North Korean nukes, he insists that steps that could result in such an attack on the United States, namely “a preemptive strike (or generating a credible threat of one to frighten China to act against Pyongyang), however awful, could be the least risky” way to a avoid several even worse alternatives.

And what are these alternatives? On top of the conquest of the South, and “abandoning 80 years of global collective security,” or watching “China intervene to ‘check’ Pyongyang, thereby pulling South Korea (and Japan) into China’s security orbit and ending the security regime the U.S. has maintained in the Pacific since 1945.”

I agree that these would be important setbacks for American interests. But would they be worse than watching several major U.S. metropolitan areas become burning, glowing wastelands? This is where I get off the boat – and I believe anyone with a lick of sanity should follow.

Do you and the rest of the American people agree? I strongly suspect the answer to both questions is “Yes,” but re the latter, here’s what’s most outrageous, and indeed unacceptable: We have no way of knowing, because all wings of the nation’s foreign policy establishment have pursued a strategy of hiding these risks from the public.

That’s why I keep contending that, given North Korea’s impending ability to hit the United States with nuclear weapons, the only policy capable of eliminating this threat (to the extent possible) is pulling the American forces out, thereby removing any reason for North Korea to launch a nuclear strike on American territory, and allowing the powerful, wealthy countries of the region handle Kim anyway they wish. Alternatively, let’s at least put this question – literally one of life and death – directly to the Americans who have been hoodwinked for so long and who would pay the price of hewing to the status quo, and see what they think.