(What’s Left of) Our Economy: The Public Outscores the Experts on China Trade Policy

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(What's Left of) Our Economy, allies, America First, Blob, Center for Strategic and International Studies, China, CSIS, elites, globalism, multilateralism, tariffs, Trade, trade war, Trump, World Trade Organization, WTO

So many big takeaways from a new poll on U.S. and global attitudes toward China and U.S. China policy (both the economic and national security dimensions), I hardly know where to begin! But if I could only write a lede paragraph for a single news article (or blog item), here’s what I’d say: The American public is a great deal more sensible on how to deal with the People’s Republic than so-called “thought leaders.” And what I mean by “more sensible” is more “America First-y” and less globalist.

The survey was conducted by the Center for Strategic and International Studies (CSIS), a Washington, D.C.-based think tank not only squarely in the globalist camp, but a charter member of the globalist, bipartisan U.S. foreign policy “Blob” (which includes a sizable trade and economic sub-Blob) that exerted dominant influence over America’s course in world affairs until Donald Trump came along, and whose supposed expertise still mesmerizes the Mainstream Media.

Of special interest, CSIS sampled opinion from everyday Americans, those so-called thought leaders (whose follower-ship, as implied above, is greatly diminished), and thought leaders from countries that are U.S. allies or “partners.”

The gap between public and elites on China policy views seems widest on the economic and trade issues that President Trump has made so central to his approach towards the People’s Republic, and the CSIS survey contains decidedly good news for him and his fans in this area: The general public is much more supportive of the “go-it-alone,” unilateral sanctions and tariffs imposed by Mr. Trump to combat and/or eliminate Chinese transgressions in this area than the Blob-ers.

Although a multilateral approach (using “international agreements and rules to change China” economically) won plurality backing among the general public (34.8 percent), fully 69 percent of the U.S. thought leaders favored this route. Yet nearly a third of the U.S. public (32.8 percent) endorsed employing “U.S. government tools like sanctions and tariffs”, versus only three percent of the deep thinkers.

As I’ve written repeatedly, (e.g., here and here) a multilateral China trade strategy is bound to fail because international institutions (like the World Trade Organization) are too completely filled by countries that either rely heavily on China-style predation to compete in the global economy, and because even (or especially?) longstanding U.S. treaty allies had been doing business so profitably with the People’s Republic that the last development they wanted to see was a disruption of the pre-Trump status quo. So support for multilateralism in this case can legitimately be taken as support for do-nothing-ism – especially since the vast majority of these elites so enthusiastically pushed for the reckless U.S. expansion of commerce with China that’s lined many of their pockets, but that’s undermined American prosperity and national security.

The CSIS poll, moreover, provides some indirect evidence for this argument: Nearly as high a share of the foreign thought leaders backed a multilateral approach for dealing with China economically (65 percent) as their U.S. counterparts. And their support of U.S.-only approaches (seven percent) was only slightly higher than that of the U.S. thought leaders’ three percent. (The foreign thought leaders may be slightly more gung ho for America going it alone due to confidence that their own products will fill any gaps in the China market left by U.S. producers shut out by the trade wars. On a net basis, though, their countries are coming out losers this year.)

At the same time, one surprising (at least to me) economics-related finding emerged from the survey: Whether we’re talking about the American people generally, or thought leaders at home or abroad, just under 20 percent favor substantial decoupling from China as the best economic approach for the United States.

When it comes to messaging, however, the survey isn’t such great news for Mr. Trump – and Trumpers – on China trade issues. On the one hand, answers to the question on evaluating his performance in this area can – although with a stretch – be interpreted to show majority support for the view that his record has achieved noteworthy gains. Principally, 27.8 percent of U.S. public respondents agreed that the President’s China measures have “been effective in producing some tactical changes in Chinese economic policy” and 9.9 percent believe they have “been effective in forcing long-term changes.” Those groups add up to 37.7 percent of the sample.

Another 20.5 percent checked the box stating that Trump policies have “hurt U.S. consumers and exporters but protected important U.S. industries.” A case can be made that at least some members of this group would give these policies good grades, or that many would give them partly good grades, possibly bringing the total for positive views somewhere in the mid-40 percent neighborhood.

Much more certain, however, is that the most popular single answer (with 41.8 percent support) was that the trade war “has damaged U.S. economic interests without achieving positive change in China.”

Also signaling a Trump China messaging problem – as with much other commentary, the CSIS survey mostly measures China policy success as changing Chinese behavior. In my view, that goal is much less important – because it’s much less realistic, at least in terms of producing verifiable reform – than protecting U.S.-based producers from China’s economic predation. The relative resilience shown by domestic industry both throughout the trade war and into the CCP Virus-induced recession indicate that this goal is being achieved. But neither the President nor his economic nor his campaign team mentions it much, if at all.

CSIS’ polling also found that fully 71 percent of U.S. thought leaders gave Trump’s China economic policies the big thumbs down – and although they don’t vote, their aforementioned influence in the Mainstream Media could partly explain why broader American opinion on the Trump record seems so divided. (For the record, foreign thought leaders weren’t asked to rate the Trump strategy.)

But having established that everyday Americans have a good deal to teach the experts on China trade and economic policy, how do the two compare on China-related national security policies? As indicated above, the gap here isn’t nearly so wide, but worth exploring in some detail – as I’ll do in a forthcoming post!

Glad I Didn’t Say That: So Who Exactly is Colluding with Russia?

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allies, Angela Merkel, energy, Germany, Glad I Didn't Say That!, Nord Stream 2, Russia, The New York Times, Trump, Vladimir Putin

““President Trump, for reasons that remain one of the top mysteries of his administration, has largely closed his eyes to Mr. Putin’s serial transgressions….”

—The New York Times, September 22, 2020

““The surest sign of European anger [over Russian trangressions] would be cancellation of the Nord Stream 2 pipeline, a gas conduit from Russia to Germany under the Baltic Sea. But the project is nearly completed, and Angela Merkel, the chancellor of Germany, is reluctant to take a step that would be costly for Europe and that would look like bowing to threats from the Trump administration, which has demanded cancellation of the pipeline.

– The New York Times, September 22, 2020

 

(Sources: “Vladimir Putin Thinks He Can Get Away With Anything,” The New York Times, September 22, 2020, https://www.nytimes.com/2020/09/22/opinion/vladimir-putin-navalny-poisoning.html?action=click&module=Opinion&pgtype=Homepage )

Making News: National Interest Post Examines Biden’s Often Head-Scratching Manufacturing Plans

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2020 election, allies, Barack Obama, China, Joe Biden, Making News, manufacturing, offshoring, reshoring, tariffs, taxes, Trade

I’m pleased to announce that my latest article for an outside publication is now on-line.  It’s an analysis of Democratic presidential nominee Joe Biden’s proposals to revive American domestic manufacturing, and it leads off this morning’s edition of The National Interest.  Here’s the link.

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

Our So-Called Foreign Policy: Why America’s Stakes in East Asia’s Security are Looking Vital Again

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allies, America First, China, East Asia, East Asia-Pacific, extended deterrence, free-riding, globalism, Intel, Japan, Joe Biden, manufacturing, Michele Flournoy, nuclear weapons, Our So-Called Foreign Policy, protectionism, Samsung, semiconductors, South Korea, Taiwan, Trump, TSMC

News flash! This past week I read a newspaper column by George F. Will that didn’t prompt me to say “What an ignoramus!’ In fact, not only did I learn something. I learned something so important that, in conjunction with some other recent developments, is causing me to rethink some long and deeply held ideas I’ve had about America’s grand security strategy in the East Asia-Pacific region.

Specifically, although Will’s own focus in the September 8 piece was who Joe Biden would pick as Secretary of Defense, the piece itself described some ominous changes in the U.S.-China military balance in Asia that call into question my main concerns about America’s approach to region, and especially what I’ve depicted as an increasingly dangerous reliance on nuclear weapons to deter Chinese aggression. Meanwhile, as I’ll detail in a forthcoming freelance article, two U.S. Asian allies – Taiwan and South Korea – whose value to the United States I’ve long insisted doesn’t remotely justify running such risks, are looking for now like critical assets.

To review, since the Cold War began, the United States has resolved to defend its East Asian allies in large part by using the threat of nuclear weapons use to persuade potential attackers to lay off. Presidents from both parties agreed that the conventional military forces needed to fight off China and North Korea (and early on, the Soviet Union) were far too expensive for America to field. Moreover, the Korean War convinced the nation that fighting land wars in Asia was folly.

Before China and North Korea developed nuclear weapons able to reach the U.S. homeland, or approached the verge (the case, it seems, with the latter), this globalist policy of extended deterrence made sense whatever the importance to America of Asian allies. For the United States could threaten to respond to any aggression by literally destroying the aggressors, and they couldn’t respond in kind.

As I noted, however, once China and North Korea became capable of striking the continental United States with nuclear warheads, or seemed close to that capability, this U.S. policy not only made no sense. It was utterly perverse. For nothing about the independence of South Korea and Taiwan, in particular, made them worth the incineration of a major American city – or two, or three. The security of much larger and wealthier Japan didn’t seem to warrant paying this fearsome price, either.

Greatly fueling my opposition to U.S. policy and my support for a switch to an America First-type policy of military disengagement from the region was the refusal of any of these countries to spend adequately on their own defense (which, in combination with U.S. conventional forces, could deter and indeed defeat adversaries without forcing Washington to invoke the nuclear threat), and their long records of carrying out protectionist trade policies that harmed the American economy.

As Will’s column indicated, though, the threat, much less the use, of nuclear weapons is becoming less central to American strategy. Excerpts he quotes from recent (separate) writings by a leading Republican and a leading Democratic defense authority both emphasize dealing with the Chinese threat to Taiwan in particular with conventional weapons. The nukes aren’t even mentioned. Especially interesting: The Democrat (Michele Flournoy) is his recommended choice to head a Biden Pentagon – and she’s amassed enough experience and is well regarded enough among military and national security types to be a front-runner. I also checked out the journal article of hers referenced by Will, and nuclear weapons don’t come up there, either.

Moreover, neither Flournoy nor her Republican counterpart (a former aide the late Senator John McCain) shies away from the obvious implication – accomplishing their aim will require a major U.S. buildup of conventional forces in East Asia (including the development of higher tech weapons). In fact, they enthusiastically support it.

Any direct conflict involving two major powers has the potential to escalate beyond the expectations of the belligerents. But certainly bigger and more capable American forces in East Asia would reduce the chances that war with China will go nuclear. So in theory, anyway, the nuclear dimensions of my concerns could be reduced.

Moreover, my willingness to run greater risks to safeguard Taiwan and South Korea in particular, and pay the needed economic price – even if they keep free-riding on defense spending – is growing, too. That’s because of the theme of that forthcoming article I mentioned: Intel, the only major U.S.-owned company left that both designs and manufactures the most advanced kinds of semiconductors, has run into major problems producing the last two generations of microchips. In fact, the problems have been so great that the company has lost the technological lead to South Korea’s Samsung and in particular to Taiwan’s TSMC, and their most advanced facilities are in South Korea and Taiwan, right on China’s rim.

Given the importance of cutting edge semiconductors to developing cutting edge tech products in general, and ultimately cutting-edge weapons (including advanced non-weapons electronic gear and cyber warfare capabilities), acquiring the knowhow to produce these microchips by whatever means – outright conquest, or various forms of pressure – would make China an even more formidable, and even unbeatable challenge for the U.S. military, at least over time.

So until Intel, whose most advanced factories remain in the United States, figures out how to regain its manufacturing chops, or some other U.S.-owned entrant rides to the rescue, there will be a strong argument on behalf of protecting South Korea and Taiwan against Chinese designs at very high risk and cost. And as noted above, Americans may even have to tolerate some more military free-riding along with, in the case of South Korea, fence-sitting in the overall U.S.-China competition for influence in East Asia.

At the same time, because of the military (including nuclear) risks still involved, seizing back control of the semiconductor manufacturing heights ultimately is the best way out of this bind for Americans. So shame on generations of U.S. leaders for helping this vulnerability develop by swallowing the kool-aid about even advanced manufacturing’s obsolescence and replacement by services. But this grave mistake can’t be wished away, or overcome instantly, either – though efforts to regain this lost tech superiority need to be stepped up dramatically. So shame on current leaders, their advisers, and wannabe advisers – whatever their favored foreign policy strategy – if they fail to acknowledge that dangerous new circumstances may be upon the nation, and the sharp imperatives they logically create. And that includes yours truly.

Our So-Called Foreign Policy: The Main Threat to U.S. Alliances Sure isn’t Trump

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alliances, allies, America First, Angela Merkel, Belarus, Blob, China, David Brin, free-riding, Germany, globalism, natural gas, Nord Stream 2, Our So-Called Foreign Policy, Philippines, Russia, science fiction, South China Sea, Trump, Ukraine, Vladimir Putin

Here’s how widespread the charge is that President Trump has been destroying America’s longstanding foreign policy alliances – and for no good reason: I just saw it made on Facebook by David Brin. (I hope this link works.)

In case you’re not a science fiction fan like me, Brin is one of the truly great modern masters of this genre. A few years ago, I read his novel of the near future Kiln People, and was just blown away. And his achievements are hardly limited to literature, as this bio makes clear. In other words, he can’t be written off as some hysterically virtue-signaling, Never Trumper know-nothing celebrity. And even if he was, he has every right to express these or any other views. But clearly foreign policy isn’t his wheelhouse.

But here’s how deeply ignorant this comment is: It, and others like it from sources with more than a passing familiarity with U.S. foreign policy and world affairs, keep ignoring just how feckless the countries America’s allied with – and to whose defense the United States is pledged – have long been, and remain. For anyone who cares about The Facts, two major examples of their cynicism and unreliability have appeared in the last month alone.

The first came from the Philippines, whose president, Rodrigo Duterte, is no decent person’s ideal of a national leader. But his island archipelago country is located on the eastern edge of the South China Sea, which has turned into a major regional hotspot and theater of U.S.-China rivalry due to Beijing’s efforts over the last decade or so to assert more and more control over its economically and strategically important sea lanes. So as with decades of pre-Trump presidents and their relations with authoritarian allies, the current administration has overlooked Duterte’s domestic record for the sake of national security.

Duterte, however, hasn’t exactly reciprocated. As a foreign policy realist, I can’t blame him for trying to placate China (which is right in his neighborhood) while continuing to enjoy the protection of the United States (which is far away). But as an America Firster, my main concern is whether the United States has any reason to feel confident about counting on Duterte when the chips are down and shooting starts, and the Filipino leader’s fence-sitting clearly shows that the answer is “No.”

In fact, in February, Duterte went so far as to announce the ending of one of the deals in the web of official U.S.-Philippine defense ties that regulates exactly what American forces can and can’t do on Filipino territory. Because of the Philippines’ location, this so-called Visiting Forces Agreement inevitably impacts how effectively the U.S. military can operate to counter China – and defend the Philippines itself. But Duterte’s spokesman boasted that it was time that Filipino’s “rely on ourselves” and “strengthen our own defenses and not rely on any other country.”

Funny thing, though. In the six-and-a-half months since, Duterte’s confidence seems to have evaporated. Because late last week, his foreign secretary announced that if China attacks, “say a Filipino naval vessel … [that] means then I call up Washington DC.” So maybe there’s some merit to Trump’s insistence that these relationships be reexamined from head to toe?

But in case you think that double-dealing and hypocrisy is limited to “our bastard” types like Duterte…stop. For the second such instance comes courtesy of no less than Germany’s Angela Merkel, who has been anointed as the current champion of the global liberal order by much of the globalist U.S. foreign policy Blob and the Mainstream Media journalists who drink its Kool-Aid.

This lionizing of Merkel, however, is mocked mercilessly by Germany’s continued refusal to make serious military contributions to the defense of Europe, by its huge, global growth-killing trade surpluses, and by its rush to ban exports of crucial medical equipment as soon as the CCP Virus hit the continent.

But Merkel-worship seems to be just as devoted – and unjustified – as ever judging from this report in yesterday’s Financial Times. “Angela Merkel warns Vladimir Putin against intervention in Belarus,” the headline declared.

The article itself, however, made clear that nothing of the kind happened. The German Chancellor simply expressed the “hope” that the Russian leader wouldn’t send troops to quell pro-democracy protests that threaten to topple the longtime leader of this compliant Russian neighbor.

Just as worrisome, earlier this month, Germany reacted with indignation to U.S. attempts to punish and therefore give pause to an increasingly aggressive Russia by ending a pipeline deal that would bring natural gas directly from Russia to Germany.

This Nord Stream 2 project would greatly enrich Putin’s regime (and make more resources available to his military) – and at the expense of alternative gas supplier Ukraine, another Putin target. German companies, however, are heavily invested in the project. So Merkel has responded to suggestions that the country pull out of the deal to protest what looks like Putin’s latest attempt to assassinate a political rival by arguing that the two matters should be “decoupled” because linking an “economically driven project” to the alleged assassination wouldn’t be “appropriate.”

Again, I’m a realist, and won’t criticize these allied leaders for wanting their cake and eat it, too. Their job is to protect and advance their countries’ interests. So if they judge that accomplishing this mission requires fence-sitting and free-riding – and thereby increasing risks to the United States – (especially the risks of rushing to their defense and even of nuclear attack on the U.S.homeland) – they should go ahead,

But by the same token, an American chief executive’s job is protecting advancing and protecting U.S. interests. And the charge – whether by the Brins or the Blobbers of the world – that Mr. Trump is gratuitously endangering venerable relationships that unquestionably make America safer and stronger – belongs in the realms of science fiction and fantasy, not fact..

Following Up: It’s Fish-or-Cut-Bait Time for the U.S. Alliance with South Korea

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alliances, allies, America First, burden sharing, CCP Virus, coronavirus, COVID 19, deterrence, globalism, North Korea, nuclear war, nuclear weapons, Our So-Called Foreign Policy, South Korea, The National Interest, tripwire, Trump, Wuhan virus

Just last week, I posted about how U.S. grand strategy in East Asia is heavily reliant on dangerously unreliable allies. So what a pleasant surprise to yours truly that the very day afterwards, polling data was published making clear just how fitting my description is of South Korea – a longtime bulwark of the American military position in the region. Just as important, the findings also confirm both (1) that the longtime strategy – which has largely continued during the Trump years – could result in American troops finding out during combat that forces and facilities they were relying on for support aren’t available after all; and (2) that coddling this fecklessness risks needlessly entrapping the United States into a nuclear war.

Although almost completely uncovered in the American media, the U.S.-South Korea alliance has been nearing a crossroads for months, as President Trump has insisted that the Seoul government pay more of the costs of stationing American forces on South Korean soil, and the South Koreans have responding with a mixture of grudging concessions at negotiations over the subject, and outright indignation. And in a July 23 National Interest post, a team of scholars from Western Kentucky University showed that a majority of the South Korean public feels exactly the same way.

There’s no question that, as a fully sovereign, independent country, South Koreans and their government have every right to hold whatever opinion they wishes about its security relations with the United States. But of course, Americans and their government are entitled to the same views, and it would be entirely reasonable to regard South Korea’s opinions and policies as complete – and dangerous – outrages.

As the Western Kentucky researchers show compellingly, numerous polls, as well as a recent survey of their own, show that strong majorities of South Koreans want the U.S. military to remain in their country because they believe that these forces are crucial to their own country’s security. But they’re also decidedly reluctant to accommodate the U.S. requests to shoulder more of the defense burden.

From an American standpoint, these attitudes would be understandable if any combination of the following conditions still described South Korea – it’s a poor country that can’t afford to defend itself adequately, or it’s already spending on its down defense to the max, or it doesn’t face very serious security threats to begin with. These conditions might also warrant cutting the South Koreans some slack when it comes to their resentment of President Trump’s allegedly heavy-handed approach to the issue – which the polls show tend to increase their unwillingness to pay more of the costs of hosting U.S. forces. After all, no one likes being bullied.

Here’s the problem, though, from an American standpoint: None of these conditions hold. And none are close to holding. For as of last year, South Korea was the world’s twelfth biggest economy, with total output of about $1.63 trillion. The gross domestic product of highly secretive North Korea’s is estimated at about $20 billion. That’s 0.01 percent of the South’s total. (Here‘s a handy source for the data.)

South Korea’s military spending isn’t real impressive, either. Both in absolute terms and as a share of its economy, it’s gone up. But as of last year, it was still only 2.7 percent of its gross domestic product. By comparison, the United States spends 3.4 percent of its economy on the military. (For both figures, click on this link.)

It can still be argued –as the Western Kentucky researchers maintain – that the South Koreans are already being more than generous in funding the U.S. military presence, and that a change in Trump attitude would likely induce more cooperation. But their defense burden-sharing views – as has been the case with so many others – weirdly ignore how the most valid standard by far is not whether the South Koreans (or any other U.S. ally) are paying as much as the United States for their defense or slightly more or slightly less or whatever. The most valid standard is whether they’re paying as much as is needed (adjusted for their capabilities of course) to defend themselves on their own. And the reason could not be more obvious: For all the talk of “common defense,” it’s their security that’s most at risk, not the United States’. (See my contribution to this anthology – from 1990 – analyzing this largely off-base burden-sharing debate.) 

And nowhere is this difference starker than on the Korean peninsula – on which South Korea is right next door to a North Korean regime that is widely described as dangerously aggressive or utterly deranged. Yet whatever you think of North Korea, nothing could be clearer than that it poses a much greater danger to South Korea than to the United States.

This observation, of course, brings us to the most completely unacceptable feature of this situation for Americans: It’s precisely because South Korea is flagrantly free-riding in defense matters that tens of thousands of U.S. troops need to be stationed right at the Demilitarized Zone dividing the peninsula, and why nowadays (as opposed to the period during which North Korea had no nuclear capabilities) their presence could well result in the U.S. homeland being hit by a North Korean nuclear warhead.

That’s because, as I’ve repeatedly explained, the mission of these U.S. forces isn’t to contribute a successful conventional military defense of South Korea.  They’re too weak – even with the help of the South Koreans.  Instead, their mission is to serve as a nuclear war tripwire – to prevent (or in the parlance of strategists “deter”) a North Korean attack in the first place by creating the danger that a U.S. President will respond to their imminent destruction by turning the conflict nuclear.  But however important South Korea is, is it really worth the complete destruction of a major American city, or two, that would result from a successful North Korean retaliation?

That this question has been evaded continuously by the U.S. government ever since North Korea’s nuclear forces began nearing intercontinental capabilities is appalling enough. That it’s still being evaded by a President supposedly devoted to America First principles – and now that Americans have had months of experience with the upheaval caused by a virus that for all its dangers can’t directly destroy any of the country’s infrastructure and the rest of its physical plant – is nothing less than masochistic. Indeed, compared with these nuclear issues, America’s legitimate gripes about finances are wildly misplaced, unless they’re seeking to pressure Seoul to become militarily self-sufficient – which they aren’t.

There’s one consideration that could overrule all these objections: If President Trump concluded that South Korea’s security was a vital American interest, and therefore by definition worth putting America’s very survival on the line for. But revealingly, no such utterances of the kind have issued from the administration. And if they had, of course, then the United States would automatically lose all its leverage in the defense costs talks with South Korea, as Seoul could be confident that America would (as so memorably pledged in former President John F. Kennedy’s 1961 Inaugural Address) “pay any price, bear any burden, meet any hardship” to keep it free – and, incidentally, prosperous.

And here’s the icing on this cake: The public opinion findings presented by the Western Kentucky authors suggest that South Koreans on the whole aren’t so completely terrified by the threat from the North as Americans suppose them to be. For example, the authors’ own survey found that only 70 percent agreed that they were “concerned about North Korea’s nuclear weapons program.” And the authors report that “South Koreans were only mildly concerned about North Korea using military force against them ….”

Does this sound like an ally that’s certain to stand shoulder-to-shoulder with Americans if military tensions in its own neighborhood approached the boiling point? That would promptly increase the preparations needed for imminent conflict? Or one that would keep hemming and hawing until the shooting actually started – and even afterwards attaching more importance to showing good faith to the North in hopes of halting the conflict than in mounting the most effective defense possible, much less helping the United State seize the initiative when the opportunity came? Anyone who believes that staunch South Korean backing can simply be assumed in any of these circumstances simply hasn’t been paying attention, and would be backing a policy sure either to produce calamitous defeat, or to push Washington to use nuclear weapons as a Hail Mary – and risk North Korean retaliation in kind.  

Finally, to return to a point made earlier: South Korea is a sovereign, fully independent country that’s completely entitled to pursue its own policy course. And if it’s not worked up about a North Korea threat to respond enough to give a joint defense of its territory a reasonable chance of success, it’s not for Americans to complain. Instead, it’s for them to either put their collective shoulder to the wheel and commit fully to defend the South come what may – or take the hint, get out of Dodge ASAP, and make sure they don’t have to pay the consequences if South Korea is wrong.

Our So-Called Foreign Policy: Trusting Asian Allies to Help Contain China is Risky Business

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alliances, allies, Asia-Pacific, Aspen Institute, Cato Institute, China, East Asia-Pacific, Hong Kong, India, Japan, Jim Risch, Our So-Called Foreign Policy, Republicans, South Korea, Taiwan, Ted Galen Carpenter, Trade, Trump

Some leading Republican Senators are slated to introduce legislation today intending to fill what they see as a big and dangerous gap in U.S. globalization and national security policy: the alleged lack of a comprehensive strategy to push China to conform with international norms on trade and related business policies and practices, and to make sure that the People’s Republic doesn’t replace the United States as the kingpin of the East Asia-Pacific region.

I haven’t seen the bill yet, but this Financial Times report gives what looks like a pretty complete summary – which comes from the horse’s mouth (Idaho Republican Senator Jim Risch, the lead sponsor and the Chairman of the Senate Foreign Relations Committee). Some of the economic proposals seem promising – although their focus seems to be China’s appalling human rights violations (about which the United States sadly can do little) as opposed to China’s economic predation (which Washington has considerable power to fight effectively).

As for the national security stuff – I really wish that Risch and his colleagues had consulted with Ted Galen Carpenter of the Cato Institute, one of America’s most trenchant foreign policy critics (and, full disclosure, a valued friend).

For in a new survey just posted by the Aspen Institute, Carpenter has made depressingly clear that one of the conditions most vitally needed nowadays for containing China’s growing military power and political influence in its back yard – reliable allies – simply doesn’t exist and isn’t likely to anytime soon.

Risch and Carpenter certainly agree on the importance of reliable allies, and apparently on their absence – although the former evidently and bizarrely believes that President Trump deserves at least part of the blame for the current unsatisfactory state of America’s regional security relationships. That take on the U.S. approach is bizarre because America (a) keeps running a growing risk of nuclear attack on the American homeland by stationing “tripwire” forces in South Korea largely because that wealthy country continues to skimp on its own defense; and (b) last I checked, America’s immense (and expensive) naval, air, and land deployments in the region were still fully intact.

And don’t just take my word for it: Carpenter lays out in painstaking detail how under President Trump the United States has actually clarified its rhetorical opposition to China’s territorial ambitions, stepped up its military operations in the Asia-Pacific region, and boosted military aid to Taiwan – which of course China views as nothing but a renegade province that it has every right to take back by force.

Regardless of what the United States is or isn’t doing, though, if U.S. alliances are going to be strengthened and oriented more explicitly against China, the allies themselves need to be at least as concerned about Beijing’s aims as Americans. That’s mainly, as Risch and his Senate colleagues note (along with yours truly over the years, as in the above linked 2014 RealityChek post), because China’s military buildup and modernization drive have eroded U.S. military superiority, and because if there’s anything worse than going to war without needed allies, it’s going to war with allies unlikely to help out once the shooting starts. And Carpenter revealed exactly how real that latter danger is by detailing just the latest instance of allied timidity:

“Washington is seeking backing from both its European and East Asian allies for a more hardline policy regarding China. The Trump administration exerted pressure for a strong, united response to Beijing’s imposition of a new national security law on Hong Kong. US officials wanted a joint statement condemning that measure and an agreement from the allies to impose some economic sanctions. However, the European Union collectively, and its leading members individually, flatly refused Washington’s request. With the exception of Australia, the reaction of the East Asian allies was no better. Japan declined to join the United States, Britain, Australia, and Canada in issuing a statement condemning the PRC’s [People’s Republic of China’s] actions in Hong Kong. South Korea seemed even more determined than Japan to avoid taking sides on the Hong Kong issue.”

And as the author rightly emphasizes, “Given the dearth of even diplomatic support from the allies for Washington’s Hong Kong proposal, there is even less chance that those countries will back a military containment policy against the PRC.”

A principal reason is money. Since the 1990s, America’s Asian allies (in particular, Japan, South Korea, and Taiwan) have profited hugely from setting up electronics assembly operations in China and selling the final products (made largely of their own parts, components, and materials, and put together with their production equipment) to the United States. Why on earth would they want to break up this highly lucrative marriage of their technology on the one hand, and China’s low labor costs and lavish subsidies on the other?

To be sure, as noted repeatedly on RealityChek, China has been moving up the technology ladder, and replacing Made-Elsewhere-in-Asia inputs with its own manufactures. But it’s a long way from totally supplanting its neighbors’ products.

It’s true that American multinational companies also are guilty of feeding and profiting handsomely from the Chinese beast. And it’s equally true that pre-Trump U.S. Presidents have helped create the problem by coddling allied fence-sitting. But at least the Trump administration’s trade policies are striving to disrupt these U.S. corporate supply chains, and its tariffs are threatening the profitability of foreign-owned multinationals’ export-focused China operations.  Japan has followed suit on decoupling to a limited extent, and India – which has moved closer to the United States lately for fear of China – is increasingly wary of its own, much less profitable, entanglement with the People’s Republic. But even Taiwan keeps eagerly investing in China and thereby increasing both its wealth and its military power.

Neither Carpenter nor I support the goal of beefing up U.S. military China containment efforts in the Asia-Pacific region (though not for the exactly the same reasons). In fact, we both favor major pullbacks. But we both agree that if containment is to be pursued, Washington needs to do a much better job of lining up its local ducks. Otherwise, it could find itself either losing another war in Asia, or winning a victory that’s pyrrhic at best.

P.S. One of Risch’s co-sponsors, Utah Republican Mitt Romney, has just revealed that he’s especially clueless on the potential of rallying the allies. 

(What’s Left of) Our Economy: Is The Wall Street Journal Now Getting Woke on China Trade?

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allies, China, decoupling, dual-use technologies, health security, high tech goods, Huawei, investment, manufacturing, national security, technology, The Wall Street Journal, Trade, {What's Left of) Our Economy

Hell has frozen over! Death and taxes are no longer certain! Water is flowing uphill!

Those are just some of my calmer reactions upon learning that The Wall Street Journal editorial board has just endorsed the idea of a “partial decoupling” of America’s economy from China‘s.

Given today’s national mood, and the marked turn it’s taken against various domestic and international outrages committed by China, this may not sound surprising – especially if you (unlike me) haven’t immersed yourself in the trade policy wars Americans have waged against each in recent decades. But in a Mainstream Media long world filled with staunch supporters of the kinds of approaches to foreign trade and international commerce generally pursued by pre-Trump U.S. Presidents, the Journal‘s editorial writers have been far and away the staunchest. Indeed, their arguments usually read like they’ve been taken straight out of standard economic textbooks, without even paying lip service to real world complications.

Not that the Journal ever championed unfettered trade and commerce in war-time. (This exception was formally identified by the so-called Father of Capitalism, Adam Smith .) And not that it ever supported selling, say, weapons to the Soviet Union during the Cold War, or encouraging investment in North Vietnam during the 1960s and early 1970s.

But the editorial doesn’t describe today’s world in those terms. Instead, it notes that  “partial decoupling may be necessary to prevent China from accumulating more leverage to bully the free world.” and that “U.S. and allied dependence on Chinese technology in a crisis….could allow the Chinese Communist Party to disrupt or shut down parts of foreign economies—or use the threat as political leverage.”

And the Journal‘s editorial board is right. Those threats are more than serious enough to justify departures from conventional free trade and broader global economic policies – which understandably prize economic efficiency and low prices and individual economic freedoms during peacetime, but which have struggled to deal with those all too commonplace gray periods between tranquility and all-out conflict.

Yet however satisfying this apparent U-turn will be to the Journal‘s longtime trade antagonists (and take it from me – it’s really satisfying), for the sake of intellectual honesty, and of U.S. national interests, its editorial board will need to go much further. And so will other influential voices who are acting newly woke about the China threat, but who may mainly be looking for safe harbors during what they hope is merely a passing storm. Several reasons stand out, and all stem from the critical reality that no industry exists in isolation from other areas of the domestic economy – let alone other industries.

So to all the ostensible pragmatists who, for example have recognized – at least rhetorically – that national security needs to come before free trade and commerce, it’s high time to recognize the implications of a development you’ve long claimed to understand: that many products crucial for national defense also have major and even predominantly civilian functions, and that for such such dual-use goods and technologies (and not only semiconductors, but high-value manufactures of all kinds) strong domestic manufacturing bases are essential.

Moreover, maintaining strong domestic manufacturing bases requires maintaining robust production complexes for all the key parts and components of the final products.

These imperatives also apply to critical healthcare goods. For example, it doesn’t do much good to set as a goal making massive numbers of the most effective facemasks in America without also ensuring adequate domestic supplies of the raw materials and the machinery needed to make them. And currently, the global production centers are in China. Similarly, what’s the point of resolving to restore national self-sufficiency in ventilators when the nation remains woefully short of the circuit boards, sensors, computer chips, tubes, and numerous other parts they’re made of?

In addition, as pointed out repeatedly on RealityChek, the secure supply problem goes way beyond China. During the CCP Virus period, literally dozens of countries, including long-term treaty allies, have embargoed or curbed exports of healthcare equipment of all types. That is, as with war, there are few free traders during a pandemic.

The lessons of dealing with both China and the CCP Virus should be screamingly obvious: In their own ways, they both represent systemic problems, and therefore require systemic, not entity-by-entity or country-by-country, responses. Acknowledging these lessons will be the test of whether the Journal‘s editorial writers and others of their ilk actually are ready to play useful roles in developing realistic U.S. trade policies, or whether they’re simply posturing.

Our So-Called Foreign Policy: Closer U.S. Taiwan Ties Must Become a Two-Way Street

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alliances, allies, CCP Virus, China, coronavirus, COVID 19, decoupling, East Asia-Pacific, foreign investment, Hong Kong, Huawei, national security, Our So-Called Foreign Policy, South Korea, Taiwan, tech, Trade, Trump, TSMC, Wuhan virus

As if its CCP Virus coverup and planned crackdown on what’s left of Hong Kong’s freedoms weren’t bad enough, China has been escalating its aggressive words and deeds throughout its East Asia/Pacific neighborhood, and one major sign has been new pressure exerted on Taiwan – which Beijing views as a breakaway province that needs to end its rebellion immediately and join the Communist People’s Republic.

This more worrisome Chinese posture understandably has sparked calls for the United States to retaliate by demonstrating stronger support for Taiwan in various ways. This impulse also seems reasonable to me. But if the Trump administration speeds up its march down this road, it handles a closer relationship with Taiwan a lot better than its predecessors for decades had handled security alliance relationships with Japan and South Korea. Specifically, it’s crucial that Taiwan share much more of the burden of resisting China’s ambitions than has long been the case.

The latest alarm bells about China’s Taiwan policies have been set off by China’s words – or, more accurately, a missing word. Although the PRC (People’s Republic of China) has never renounced using force to achieve its longstanding aim “reunifying” China (as it defines the issue), its rhetorical positions toward the island have long fluctuated between the conciliatory and the blustery. But for 40 years, when Beijing mentioned of reunification, the word “peaceful” has always preceded it.

Last Friday, though, China’s second most important leader dropped the “peaceful” – and did it at a major forum: the annual meeting of the country’s rubberstamp parliament.

So it seems clear that the China cloud over Taiwan has darkened. But U.S. steps to bolster Taiwan’s security will greatly underperform – and may actually increase the dangers posed to America by China itself – unless Washington starts demanding in return that Taiwan stop its longstanding practice of investing massively in manufacturing in China, including in high tech sectors.

Indeed, as of 2018, according to this report, the total value of Taiwanese investment in China hit $180 billion – ten times the value of Taiwan’s investment in the United States. The annual amounts have been going down, but mainly because of the Trump administration’s tariffs on China, which have made it much more difficult for any factories in China – Chinese or foreign-owned – to earn fat profits by exporting major shares of their output to the United States. Even so, such investment had reached massive proportions. Indeed, in 2017. China still attracted nearly 45 percent of all Taiwan’s outbound foreign direct investment. Moreover, so much of this investment has come in technology sectors that fears have emerged of the island hollowing out its own innovation sector – which has been so vital to Taiwan’s spectacular economic development. And of course, Taiwanese companies like contract semiconductor manufacturing giant TSMC have been major suppliers of microchips and other high tech products to Chinese tech companies like Huawei, the global leader in advanced telecommunications.

It’s important to recognize that Taiwan is hardly the only U.S. ally that’s promoted China’s economic – and therefore technological and military – development. It’s not even the biggest. (That dubious honor goes to Hong Kong, but most of this Chinese “Special Administrative Region’s” direct investment flows to China seem to be concentrated in lower-tech, labor-intensive sectors without significant national security implications.) Moreover, the United States remains complicit itself.

But even though his administration doesn’t use the word, decoupling from China does appear to be a major goal of President Trump’s. There’s certainly been a lot of it. I’m not big at all on the United States embarking on a full-fledged campaign to mobilize East Asia/Pacific countries to out-compete China for influence in the  region. Indeed, I’ve argued that disentangling the United States from China economically is vital to ensure American security and prosperity on its own merits. But if President Trump does want to go the full-court anti-China press route, what’s the point if supposed American allies aren’t all-in on decoupling asd  as well?

Our So-Called Foreign Policy: A Cheer and a Half for Trump’s New China Strategy Document

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alliances, allies, America First, CCP Virus, China, coronavirus, COVID 19, decoupling, globalism, Josh Rogin, liberal global order, Our So-Called Foreign Policy, Phase One, stock markets, technology, The National Interest, Trade, transactionalism, Trump, Washington Post, Wuhan virus

When over breakfast this morning I read Josh Rogin’s Washington Post column on the Trump administration’s new China strategy statement, I was pretty pleased. It’s been a long time since I viewed the intra-administration disagreements on the subject that its release has supposedly resolved as major problems in the China strategy overhaul that President Trump has sought, The tough and, more important, smart Phase One trade deal signed in mid-January was a convincing sign that the “doves” had been marginalized, but only one sign. The new statement itself describes many others. At the same time, the more basic agreement within Mr. Trump’s team, the better.

When I finally read the actual statement a little later, I was less pleased. It’s true that the President is both fully woke to the China threat, and that he’s reversed or overturned many of the disastrous mistakes made by his predecessors on a variety of fronts – including not only trade but technology, foreign investment, and exchange programs in particular. Moreover, the evidence is multiplying that the disaster created by the CCP Virus will lead to still tougher and, more important, still smarter measures. (A further crackdown on U.S. stock exchanges listings of Chinese entities is just one example.)

But the statement also made clear that Mr. Trump hasn’t made the clean break with previous globalist approaches to China and related aspects of American foreign policy that I’ve been advocating and that, as I’ve written, could lead to serious and needless dangers down the road. And as with much of the rest of the Trump framework, the big problem has to do with the role assigned to U.S. allies and alliances. Specifically, it’s still way too big, and not different enough from the globalist approach he’s rightly slammed verbally.

Not that “United States Strategic Approach to The People’s Republic of China” was devoid of America First-y ideas. It was great, for example, to see the administration reaffirm “Our approach is not premised on determining a particular end state for China. Rather, our goal is to protect United States vital national interests” (even though the United States keeps demanding, at least rhetorically, major structural reforms in China’s trade, technology, and other economic policies – demands I’ve explained are fruitless because of impossible monitoring and enforcement challenges).

Similarly encouraging, the top two vital interests identified: “(1) protect the American people, homeland, and way of life; (2) promote American prosperity….”

I also really liked “[T]he United States responds to the PRC’s [People’s Republic of China] actions rather than its stated commitments. Moreover, we do not cater to Beijing’s demands to create a proper ‘atmosphere’ or ‘conditions’ for dialogue. Likewise, the United States sees no value in engaging with Beijing for symbolism and pageantry; we instead demand tangible results and constructive outcomes.”

Indeed, the document adds, “We acknowledge and respond in kind to Beijing’s transactional approach with timely incentives and costs, or credible threats thereof.” This kind of transactionalism – expecting proposed foreign policy measures above all to create specific, measurable short-term benefits for the United States, rather than focusing on more ambitious steps that might turn out even better farther down the road, but whose success is far less certain – is a key tenet of America First foreign policies (as I’ve argued in the above linked National Interest article). Therefore, this explicit mention and endorsement of the term is most welcome (though it needs to be enshrined as a pillar of U.S. diplomacy elsewhere, too).

The statement’s treatment of transactionalism is closely related to its clear skepticism about another dubious globalist concept – though in this instance it’s more important for what it doesn’t say than for what it does: “[C]ompetition necessarily includes engagement with the PRC, but our engagements are selective and results-oriented, with each advancing our national interests….” I read this passage as an implicit announcement that the United States will no longer be seeking any particular kind of “relationship” with China, a gauzy goal that I’ve explained (on Twitter) creates powerful pressures to sacrifice concrete objectives in the here and now in the usually mistaken belief that the other party will feel obliged to make comparable sacrifices going forward – at some point.

And all this excellent material helps make clear why I’m so disappointed in the document’s numerous bow to globalism’s shibboleths. Two stand out in particular, and they’re so intimately intertwined as to be practically two sides of the same coin: the idea that it’s crucial for the United States to uphold something globalists (and the authors of this document) call a “rules-based international order,” and the maxim that critical building blocks of this order are America’s security alliances. The big problem from an America First standpoint with these notions? Once you buy into them, you’re back in Relationships-Uber-Alles-Land.

So I was distinctly unhappy to read passages like:

“[T]he United States does not and will not accommodate Beijing’s actions that weaken a free, open, and rules-based international order. We will continue to refute the CCP’s narrative that the United States is in strategic retreat or will shirk our international security commitments. The United States will work with our robust network of allies and likeminded partners to resist attacks on our shared norms and values, within our own governance institutions, around the world, and in international organizations.”

Indeed, the lionization of America’s international security commitments completely ignores problems that President Trump has rightly spotlighted – like flagrant defense free-riding, diplomatic fence-sitting, and trade policies that have ripped off America nearly as much as China’s. Just as thoroughly ignores problems that have largely escaped Mr. Trump’s notice – like the recent, rapidly growing nuclear war risks the United States has been running in places like the Korean peninsula and Eastern Europe precisely because its allies do so little to defend themselves. Does the Trump administration really believe it can count on these countries to help fight China if shooting starts?

Meanwhile, the similar shout-out to international organizations overlooks the administration’s warning in this very same document about the naivete of assuming that “engagement with rivals and their inclusion in international institutions and global commerce would turn them into benign actors and trustworthy partners.”

Another way to put this critique: The document pays no attention to the fundamental problem with rules-based order worship. In the last analysis, it’s never been based on adherence to rules – i.e., a consensus on what is and is not acceptable international behavior. It’s been based on a willingness of the so-called free world to allow the United States to bear most of the costs and risks of providing them with security and prosperity. Those costs and risks, however, have become unaffordable and unacceptable for the United States, and its allies have displayed no serious signs of helping carry the load.

Let’s end on a happier note: The new China document promises that the United States will judge China by its deeds and not by its words. And since despite the references to alliances and international orders, these considerations so far haven’t much inhibited the administration from hitting China ever harder, especially on the trade and technology fronts, focusing on its deeds seems like the best way to evaluate its China policy, too. 

In fact, here’s possibly the strongest proof of that pudding.  The document doesn’t once mention the aim or even the concept of “decoupling” – the notion that the United States should disengage economically from China as fast and as thoroughly as practicable.  But decoupling – indeed, big time decoupling – is exactly what’s been taking place during the age of Trump.