• About

RealityChek

~ So Much Nonsense Out There, So Little Time….

Tag Archives: Japan

Our So-Called Foreign Policy: It’s Official. Uncle Sucker is Back

21 Sunday Feb 2021

Posted by Alan Tonelson in Our So-Called Foreign Policy

≈ Leave a comment

Tags

alliances, allies NATO, America First, Biden, deterrence, Donald Trump, Japan, North Atlantic treaty Organization, Our So-Called Foreign Policy, South Korea

If you think this title is too harsh, and especially if you agree with his view that maintaining U.S. alliances must be central to American foreign policy-making, you need to ask yourself this: How can some of the major points President Biden made in his speech Friday to an audience containing heads of major allied governments accomplish anything but keep the United States needlessly paying outsized costs for these arrangements and even worse, running major risks that include nuclear attack, for no good reason whatever?

As known by RealityChek regulars, downsides of American security alliances both in Europe and Asia that arguably were acceptable during much of the Cold War period have become terrifying and – because stemming from stubbornly hidebound thinking and consequent policy inertia – downright inexcusable more recently. That’s because physically devastated allies literally helpless against aggression in the earliest post-World War II decades, but nonetheless retaining vital economic and therefore military potential, had fully recovered by the mid-1970s, and because their continued defense free-riding led Washington to station sizable military units (and their dependents) directly in harm’s way.

The idea was that this U.S. presence’s very vulnerability to superior conventional forces from the Soviet Union and North Korea would deter aggression to begin with. Forit would all but force a U.S. President to approve saving these American lives with nuclear weapons – whose use could trigger an all-out mutually devastating conflict.

This gamble could be defended when the United States enjoyed clearcut nuclear superiority over the Soviets, a nuclear monopoly and near-monopoly over the North Koreans and Chinese, respectively – and when allies and their potentially crucial assets were still down and out. But for many years, the nuclear gap has  closed in Europe and the the monopoly and near-monopoly in Asia vanished, and all allies in question have been amply wealthy enough to defend themselves. So Washington’s refusal to adjust means that the nation could well see nuclear warheads land on its soil because the Europeans, Japanese, and South Koreans have been permitted to be military deadbeats. Could any policy be more recklessly perverse, or determined to reward irresponsibility and cynicism?

Despite loudly griping about allied defense free-riding, raising the temperature in periodic defense burden-sharing negotiations, and rearranging some troop deployments in Europe, Donald Trump never frontally and comprehensively challenged the status quo, at least while President. Would a second term have been different? Who knows?

What is clear, especially from this latest speech by Mr. Biden, is that the United States will now be doubling down on this entire literal Americans Last strategy.

For not only did the President repeated the pre-Trump standard Washington endorsement of the core principle of the North Atlantic Treaty Organization (NATO) that “An attack on one is an attack on all. That is our unshakable vow” – which inevitably tells the allies that they can continue free-riding militarily to their heart’s content and count on American protection no matter how potentially disastrous the consequences for the American people.

He actually praised “Europe’s growing investment in the military capabilities that enable our shared defense” even though these expenditure will be definition be utterly inadequate as long as their level leaves a military gap that American conventional and nuclear forces still need to fill.

Further, in declaring that he would not view U.S. alliances as “transactional” he assured America’s so-called partners that their relationships with Washington need involve no give and take whatever, thereby guaranteeing that these opportunistic governments would raise their chronic free-riding to much loftier levels, and that Americans would bear more of the costs and risks of these arrangements than ever.

And most foolishly of all, Mr. Biden explicitly told the Europeans (and consequently the Asians) that, after the stormy Trump years, it was up to the United States “to earn back our position of trusted leadership.” That is, the kinds (long overdue) burden- and therefore risk-sharing criticisms made by the former President were completely illegitimate, and that whatever ailed the alliances resulted from Trump’s America First words and (much more modest) deeds, not from decades of allied risk- and burden-shirking.

Of course, Mr. Biden’s words were actual U.S. policy for decades before the Trump years. That’s why these arrangements became so dysfunctional from any sensible American standpoint in the first place. But by making this approach explicit, and giving the Europeans and Asians official license for their longstanding “heads we win, tails America loses” priorities, the President has not only gravely weakened his own country’s safety and prosperity. He’s destroyed whatever legitimate hopes ever existed that multilateralism and collective security could ever adequately serve any reasonable definition of American interests.

(What’s Left of) Our Economy: Why China Really is Like Nazi Germany

22 Friday Jan 2021

Posted by Alan Tonelson in Our So-Called Foreign Policy

≈ 6 Comments

Tags

Albert O. Hirschman, allies, Biden, China, dumping, Information Technology and Innovation Foundation, intellectual property theft, Japan, multilateralism, NATO, Nazi Germany, nuclear umbrella, Robert D. Atkinson, sanctions, South Korea, tariffs, tech industry, technology extortion, Trade, tripwire, Trump, {What's Left of) Our Economy

Because Nazi references can be so irresponsibly inflammatory, and therefore have been so often abused, I haven’t yet compared the threat posed by China to the rest of the world to that posed by Nazi Germany. (In my view, these comparisons have been used even more recklessly lately in U.S. domestic politics, chiefly to describe former President Trump and his views and policies.) So even though the People’s Republic, its ambitions, and its burgeoning capabilities do scare the living daylights out of me (and should scare you), I was nonetheless pretty surprised to see precisely this comparison just made by Robert D. Atkinson.

Atkinson is the head of a technology-focused Washington, D.C. think tank who I’ve known since the early 1990s. I’ve admired some of its work and haven’t been so crazy about other examples of its output, but I’ve never, ever considered him a boat-rocker, much less a rhetorical bomb thrower. In fact, my criticisms of the numerous studies and articles issued by his Information Technology and Innovation Foundation stem from my view that they’re way too cautious when it comes to countering China’s wide range of predatory economic practices (which include predatory technology policy practices like the theft and extortion of intellectual property).

And I’ve attributed much of this caution to the Foundation’s donor base – which is dominated by the U.S. and in some cases foreign tech and manufacturing companies that have worked so hard to send so much production and employment, and (voluntarily) so much technology to China for decades. It’s true that many of these firms are now crying foul as Beijing in recent years has aimed to strengthen its own entities’ positions at the foreigners’ expense. Yet their stubborn opposition to the unilateral Trump tariffs and some key sanctions on the Chinese tech outfits that have been major customers made clear their vain hope that they could somehow have their China cake and eat it, too.

Yet here comes Atkinson in the Fall issue of The International Economy (a publication that’s as – proudly – establishment oriented as they come) with a piece titled “A Remarkable Resemblance” likening China’s international economic policies to those of “Germany for the first forty-five years of the twentieth century” – which of course include the twelve Nazi years (1933-1945).

As the author argues, Germany during these decades was:

“a ‘power trader’ that used trade as a key tool to gain commercial and military advantage over its adversaries. Likewise, China’s trade policy is guided neither by free trade nor protectionism, but by power trade, with remarkably similar strategy and tactics to those of 1940s Germany. Understanding how Germany manipulated the global trading system to degrade its adversaries’ capabilities, entrap nations as reluctant allies, and build up its own industries for commercial and military advantage, just as China is doing, can shed light and point the way for solutions to the China challenge.”

Atkinson reports that this description of German policies came from a 1945 book by the important economist Albert O. Hirschman, which concluded that “[I]t’s is possible to turn foreign trade into an instrument of power, of pressure, and even of conquest. The Nazis have done nothing but exploit the fullest possibilities inherent in foreign trade within the traditional framework of international economic relations.”

The author rightly observes that

“Hirschman’s key insight was that some countries— in this case Germany under three very different government regimes from 1900 to 1945—focus not on maximizing free trade or even on protecting their industries, but on changing the relative power of nations through trade to achieve global power. Germany’s policies and programs were designed not only to advance its own economic and military power, but to also degrade its adversaries’ economies, even if that imposed costs on their own economy relative to a free trade regime.”

Germany also consistently sought, as the author points out “to make it more difficult for its trading partners to dispense entirely with trade with Germany, thus creating dependency.” And if that’s not enough to convince you about the comparison with China today, Atkinson himself notes that the German policy recipe also included massive industrial espionage, and Hirschman identified a major element as the equally massive dumping (selling at prices way below production costs) of goods into foreign markets to destroy overseas competition.

Atkinson’s diagnosis of the problem is so spot-on that it makes his recommended solution especially disappointing. Kind of like President Biden, he believes that the best internationally oriented option by far (on top of more effective support for U.S. industry, which I strongly support) is forming a “NATO for trade” that would be

“governed by a council of participating [free trading] countries…if any member is threatened or attacked unjustly with trade measures that inflict economic harm, DATO [the “Democratically Allied Trade Organization] would quickly convene and consider whether to take joint action to defend the member nation.”

I’ve already pointed out that the consensus on standing against China economically among America’s allies is way too weak to enable such multilateral approaches to succeed. But as long as we’re talking in terms of NATO – the military alliance between the United States and much of first Western and now Eastern Europe – and the Cold War, let’s not forget two other big problems. First, NATO (and this also goes for America’s security ties with South Korea and Japan) was never so much an alliance as a protector-protectorate relationship. The vast bulk of the heavy lifting was always done by the United States.

This allied security dependence in turn has produced the second major obstacle to a DATO’s effectiveness. Because the United States coddled allied defense free-ridingcand opened its markets one-sidedly for so long, the allies’ protectorate status was substantially cost-free economically, and even came with trade rewards no other country could remotely offer. (In addition, as I’ve also written, the creation of an American nuclear umbrella combined with the stationining of U.S. “tripwire” forces on the NATO frontlines in Germany also greatly minimized the military risks of siding with Washington.)

Today, however, economic power between the United States and the allies is more evenly distributed, and the allies’ profitable trade with and investment in China has, as noted in my aforementioned writings, greatly increased the economic price they would pay for lining up against China.

Still, by comparing the China threat to the Nazi threat, Atkinson’s article significantly bolsters the case for the United States escalating its response to the “all of society” level – or at least intensifying it qualitatively. Let’s just hope, as the author writes, that this time around the United States fully awakens a lot faster.

Our So-Called Foreign Policy: Already, a Biden Misstep

12 Thursday Nov 2020

Posted by Alan Tonelson in Our So-Called Foreign Policy

≈ Leave a comment

Tags

alliances, allies, Asia, Asia-Pacific, China, Demitri Sevastopulo, East China Sea, Financial Times, globalism, Japan, Joe Biden, Northeast Asia, Our So-Called Foreign Policy, Senkaku Islands, South Korea, Taiwan, Takeshima Islands, Yoshihide Suga

Now wait a second! For decades we’ve been hearing that possible President-elect Joe Biden is a foreign policy genius! Or at least that during his (47?) years in public life, he’s gained encyclopedic knowledge of the world and especially its flashpoints. (See, e.g, here.)

And just last night came the news that the former Vice President may have needlessly thrown the Northeast Asia security scene into major confusion over whether his administration will or won’t defend the Senkaku Islands.

Never heard of the Senkaku Islands? I’m tempted to forgive you. After all, they’re little than a bunch of uninhabited islets and rocks in the East China Sea. Although the surrounding fishing grounds seem to be fertile and there may or may not be undersea energy resources nearby, in and of themselves, their economic importance at present appears marginal.

Their strategic importance, in terms of controlling sealanes close to the economic goliath of Northeast Asia could be greater. But if so, we begin approaching why the Senkakus should be closer to your radar screen. For the islands are claimed by no fewer than three countries: Japan (which currently “administers” them, China, and Taiwan. The first is a formal U.S. treaty allly, the second has become arguably America’s chief strategic rival both in the Asia-Pacific region and globally, and the third an historical part of China that Beijing seems increasingly determined to regain – and by force if necessary.

Moreover, since the Obama administration clarified the matter in 2014, it’s been U.S. policy to regard the Senkakus as Japanese territory that, under the terms of the two countries’ security arrangement, the United States is bound to help Tokyo defend against attack. And in principle, this includes nuclear weapons use – a major concern since the likeliest attacker these days, China, has lots of nukes of its own capable of reaching the U.S. homeland.

Or is this still U.S. policy? As widely reported yesterday, Biden issued a statement reaffirming the 2014 commitment (made of course when he was Vice President). At least that’s what new Japanese Prime Minister Yoshihide Suga claims Biden told him in a phone call. But as alertly caught by the Financial Times‘ Demitri Sevastopulo,

“In a summary of the call provided to the media, the Biden transition team said the president-elect had ‘underscored his deep commitment to the defence of Japan and US commitments under Article V’ [of the security agreement] but did not refer specifically to the Senkaku. A transition team spokesperson declined to comment beyond the content of the summary.”

Isn’t this exactly the kind of confusion an experienced foreign policy hand should know how to avoid? And in particular, one who’s made “renewing” and “restoring” these arrangements after four years of a supposedly destructive Trump approach a hallmark of his global strategy?

Nor does the confusion stop there, for the Senkakus aren’t the only disputed islands in Northeast Asia. Don’t forget the Takeshima Islands. Or should they be called by their Korean name – Dokdo? Because they’re claimed by both North and South Korea, as well as Japan. Since South Korea is a U.S. security ally on a par with Japan, do they qualify for American-aided protection, too? If the North Koreans attempt a grab, that would seem like an easy call. (Of course, never forgetting that the North Koreans may well possess nuclear weapons that can hit the continental United States, too – or soon will.)

But what if South Korea attacks them and Japan invokes its U.S. treaty obligations? Wouldn’t Tokyo have every reason to believe that the Senkaku formula applies to the Takeshima/Dokdos, too? And what about the reverse situation – a South Korean attack? Would a Biden administration spokesperson be content to leave those countries in the dark about America’s real policy, too?

These scenarios may seem far-fetched. But only a little while ago, so did a pandemic that would kill hundreds of thousands of Americans and millions around the world, and cripple the U.S. and global economies. I don’t recall the September 11 terrorist attacks being widely predicted, either.

Precisely because, for a globalist alliance worshipper like Biden, there are no easy answers to the Senkakus and Takeshima issues (and please don’t take my use of the Japanese names as an endorsement of Tokyo’s claims), the best maxims to follow are “Do no harm” and the closely related “Keep them out of the news.” Worrisomely, they’re two maxims that the ostensible master strategist who might become America’s next President seems to have completely forgotten.

Our So-Called Foreign Policy: Big Decisions Coming on Asia

04 Sunday Oct 2020

Posted by Alan Tonelson in Our So-Called Foreign Policy, Uncategorized

≈ Leave a comment

Tags

Asia, Asia-Pacific, Central America, China, containment, currency manipulation, deterrence, East Asia-Pacific, Japan, Mexico, New Journalism, Norman Mailer, nuclear deterrence, Our So-Called Foreign Policy, semiconductors, South Korea, Taiwan, tripwire, U.S. Army, Vietnam, Walker D. Mills, Western Europe

Whenever I think about what to blog about, I ask myself a question that I first heard one of my all-time writing idols raise many years ago when he faced similar decisions. The occasion came during a college writing seminar where the guest lecturer was none other than Norman Mailer.

The seminar probably took place sometime in 1974, and one of my fellow students asked Mailer why he hadn’t turned out anything about the Watergate scandal. I had been wondering this myself, since Mailer’s world renown by then stemmed both from his novels and from his forays into the “new journalism” that was emerging in that era, in which gifted writers tried to employ some key techniques from fiction (especially their keen insights into human nature and their considerable descriptive and narrative skills) ito shed light on the events of the day. On top of turning out numerous important non-fiction works, Mailer had also run (unsuccessfully) for Mayor of New York City in 1969. So he was by no means shy about sounding off on headline subjects, and I’m sure I wasn’t the only one of his fans anxious to hear about the Nixon-centric drama.

But his answer was disarmingly simple. He decided to give Watergate a pass because he couldn’t think of anything distinctive and important to say.

And that’s an (admittedly roundabout) way of explaining why today’s post won’t be about any aspect of President Trump’s contraction of the CCP Virus. At the very least, events are moving so quickly that it’s hard to know the score. Instead, I’m focusing on foreign policy, and in particular two major, under-reported developments in U.S.-Asia relations that are underscoring the return of Cold War-like challenges across the Pacific, but that should be teaching American policymakers very different lessons.

I’ve already dealt to some extent with the first here on RealityChek: The U.S.’ loss of global leadership in the manufacture of cutting-edge semiconductors to companies in South Korea and especially Taiwan. In a journal article scheduled for publication this week, I’ll be laying out the key the technical details and some of the main policy implications. But in brief it amplifies my argument that the location of the world’s most advanced producers of the vital building blocks of modern economies and militaries right at China’s doorstep means that the defense of Taiwan in particular has now become a vital U.S. national security interest that requires the kinds of military forces and strategies (including a threat to use nuclear weapons) employed to protect major treaty allies like Japan and Western Europe both during the Cold War decades and since.

After all, those Cold War commitments – which exposed the United States to the risk of Soviet and to a lesser extent Chinese nuclear attack – were reasonably justified by the belief that Japan and Western Europe were centers of industrial and technogical power and potential that could create decisive advantages for the communist powers if they gained control or access to their assets. The importance of advanced semiconductors today means that Taiwan now belongs in the same category.

As I detail in the upcoming article, Washington has rightly been building closer diplomatic and military ties to Taiwan in response (though I also argue that it’s ultimately far more important for the United States to restore its semiconductor leadership ASAP). But this fall, an article in an official journal of the U.S. Army argued for taking a net step that, however logical, would be nothing less than momentous – and comparably sobering. In the words of Marine Corps Captain Walker D. Mills,

“The United States needs to recognize that its conventional deterrence against [Chinese military] action to reunify Taiwan may not continue to hold without a change in force posture. Deterrence should always be prioritized over open conflict between peer or near-peer states because of the exorbitant cost of a war between them. If the United States wants to maintain credible conventional deterrence against a [Chinese military] attack on Taiwan, it needs to consider basing troops in Taiwan.”

To his credit, Mills goes on to make explicit that such troops would in part be performing the kind of “tripwire” function that similar units in South Korea serve – ensuring that aggression against an ally ensures the start of a wider war involving all of America’s formidable military capabilities. The benefit, as always, would be to prevent such aggression in the first place by threatening consequences the attacker would (presumably) find prohibitive.

Where Mills (like U.S. strategists for decades) should have been much more explicit was in explaining that because the threatened major conflict could easily entail nuclear weapons use, and since China now in particular, has ample capability to strike the U.S. homeland, the deployment of tripwire forces can result in the nuclear destruction of any number of American cities.

So this course of action would greatly increase at least theoretical dangers to all Americans. But what’s the alternative? Letting Beijing acquire knowhow that could eventually prove just as dangerous? As my upcoming article demonstrates, the blame for this agonizing dilemma belongs squarely on generations of U.S. policymakers, who watched blithely as this dimension of the nation’s technological predominance slipped away. And hopefully, as I just stated, this predominance can be recreated – and dangerous new U.S. commitments to Taiwan’s security won’t become permanent.

But that superiority won’t come back for years. Therefore, it seems to me that, as nuclear deterrence provided for Western Europe and Japan succeeded in creating the best of both possible worlds for the United States, this strategy could well work for protecting Taiwan for essentially the same reasons.

I’ll just insist on one proviso: At some point before it becomes a fait accompli, this decision should be run by the American people – as has never been the case.

Unfortunately, as I’ve also pointed out, Taiwan has become so important to the United States that even an America First-inclined U.S. President will have to look the other way at its longstanding trade protectionism and predation in order to maintain close ties – just as it winked at German, Japanese mercantilism in particular during the Cold War. But that kind of linkage needn’t apply to other countries in East Asia (and elsewhere in the world), who lack the kinds of assets Taiwan possesses, and in that vein, I hope the Trump administration (and a Biden presidency, if the former Vice President wins in November) won’t let strategic considerations prevent a thoroughgoing probe of Vietnam’s possible exchange rate manipulation and one other trade offense.

The former concern, of course, stems from the effects of countries’ sometime practice of keeping the value of their currencies artificially low. An under-valued currency just as artificially lowers the prices of a manipulator’s goods and services in markets all over the world vis-a-vis their U.S.-origin counterparts, and therefore makes the latter less competitive for reasons having nothing do with free markets.

The argument against the investigation (which I’ve so far seen only on Twitter, but by folks who are thoughtful and well-informed) is that in an economic conflict with China, the United States needs all the friends it can get. In addition, these critics point out, if tariffs are placed on Vietnamese goods, then companies thinking of leaving China because of the Trump levies on hundreds of billions of dollars’ worth of Beijing’s exports will face greater difficulties exiting, since Vietnam is such a promising alternative for so many products.

What these arguments overlook, however, is that, as a neighbor of increasingly aggressive China, and a country that’s struggled for centuries to prevent Chinese domination, Vietnam has plenty of powerful reasons of its own to help with any anti-China efforts initiated by the United States So it’s highly likely that Vietnam will keep cooperating with American diplomacy and other policies regardless of what the United States does on the trade front.

Moreover, Vietnam lacks Taiwan-style leverage over and value to the United States because it’s not a world-class producer of anything. So there’s no need for Washington to grin and bear Vietnamese trade abuses that may be harming the U.S. domestic economy.

And finally, although it’s great that Vietnam has been a prime option for companies thinking of moving factories and jobs out of China, it would be even better for Americans if those companies seeking low-cost production sites moved to Mexico or Central America, since greater economic opportunity for those Western Hemisphere countries will be so helpful to the United States on the immigration and drugs fronts.

Mark Twain is reputed (possibly incorrectly) to have said that “History doesn’t repeat itself but it often rhymes.” That is, it holds important lessons, but discovering them can be challenging, and both American security and prosperity are about to depend heavily on U.S. leaders getting them right.

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

13 Sunday Sep 2020

Posted by Alan Tonelson in Our So-Called Foreign Policy

≈ Leave a comment

Tags

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: Trusting Asian Allies to Help Contain China is Risky Business

22 Wednesday Jul 2020

Posted by Alan Tonelson in Our So-Called Foreign Policy

≈ Leave a comment

Tags

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. 

Our So-Called Foreign Policy: Another Wuhan Virus Lesson Globalists Need to Learn

18 Wednesday Mar 2020

Posted by Alan Tonelson in Uncategorized

≈ Leave a comment

Tags

alliances, allies, China, core deterrence, coronavirus, COVID 19, Eastern Europe, extended deterrence, globalism, Japan, NATO, North Atlantic treaty Organization, North Korea, nuclear deterrence, nuclear war, Our So-Called Foreign Policy, Russia, South Korea, Soviet Union, tripwire, Western Europe, Wuhan virus

Here’s a seemingly off-the-wall question: What does the Wuhan Virus have to do with U.S. policy toward its global security alliances?

And here’s why it’s not only not a perfectly sensible and even vital question, but why the best answer is “Plenty”: Because these decades-old globalist arrangements now pose to America risks that look like the coronavirus-in-not-so-miniature. Even worse: The benefits to the United States these days are much more modest than  during the Cold War era when they were created.

The purely national security arguments should by now be familiar to RealityChek regulars. (See here and here for fuller descriptions of the points I’m about to summarize.) The North Atlantic Treaty Organization (NATO – which has linked the United States, Europe, and Canada), and the bilateral security relationships between the United States and Japan and South Korea, originally aimed to prevent the Soviet Union from dominating global centers of economic and technological strength and potential, and therefore of military strength and potential.

In fact, these countries and regions were considered so important that American policy made clear that Washington was ready to wage nuclear war – with all the dangers such conflicts would create for the U.S. homeland. Moreover, because the allies (or protectorates, as many call them) understandably doubted that American leaders really would, when the chips were down, “sacrifice New York to save London,” Washington felt compelled to station the U.S. military directly in harm’s way.

The idea was never to stop Soviet or North Korean or Chinese aggression with conventional forces alone. Quite the contrary. These units were intended as trip-wires. The very likelihood that they’d be annihilated was supposed to put irresistable pressure on a U.S. President to respond to attacks with nuclear weapons. In turn, this prospect was supposed to deter U.S. adversaries from attacking in the first place.

Such an approach (called “extended deterrence” by the cognoscenti – as opposed to “core deterrence,” which sought to protect the United States itself) made obvious sense when the United States enjoyed a monopoly on nuclear weapons. It even made arguable (though less obvious) sense when the Soviets reached nuclear parity, and the Chinese developed their own rudimentary nukes.

Since the end of the Cold War, however, it’s made much less sense, and more recent developments have turned this nuclear umbrella border-line – and crazily – suicidal. For the Soviet Union is gone. It’s been partly replaced with a newly aggressive Russia, but the countries most threatened by Moscow are not the economic and technological giants of Western Europe, but the newer NATO members of Eastern Europe – whose security was never remotely vital to the United States, as evinced by the long decades they spent as Soviet satellites or actual parts of the former USSR.

In East Asia, nuclear forces both in China and in North Korea can now not only hit the United States (or in the case of Pyongyang, are rapidly approaching that capability). When it comes to China, these weapons’ launch platforms have become much more difficult for the United States even to find, much less take out before they can be used. In other words, for all the continuing and even growing economic and technological importance of Japan and South Korea – which is considerable – the nuclear threats to America from their leading potential adversaries have grown faster both quantitatively and qualitatively.

And in all these alliance cases, despite President Trump’s clear interest in a fundamentally new America First-type foreign policy, and even though the allies are amply capable of fielding the forces needed to defend themselves, they choose not to. Therefore, U.S. forces still serve as tripwires in both Europe and Asia.

It’s likely that the economic damage done to the United States from a North Korean nuclear nuclear bomb landing in a big American city or two wouldn’t compare to the coronavirus economic damage we’re seeing now and are likely to see. But who can doubt that this damage will be substantial in economic terms, and catastrophic from a humanitarian standpoint? And in the areas hit, the harm to businesses and their workers could well last much longer. Further, the impacts of the kind of much larger retaliatory strikes that could come from China (if it invades Taiwan) or Russia, would be that much greater.

And these prices paid for maintaining current alliance policies would be all the more unacceptable because they are now completely unnecessary – because of the allies’ capabilities, and because so many of the European countries now under this U.S. “nuclear umbrella” are so thoroughly marginal to America’s safety and prosperity.

The globalist supporters of these alliances insist that these risks are indeed acceptable largely because deterrence has made them so remote. That sounds ominously like the optimism expressed by so many Americans (myself included) the day(s) before the Wuhan Virus threat’s scale became all too real. Now it’s increasingly clear that the globalists’ favored policies of indiscriminate free trade and offshoring-happy globalization policies have gravely endangered the nation’s health security as well as its prosperity, at least in the near-term. Let’s not be needlessly blindsided by a calamity triggered by the globalists’ hidebound alliance policies.

Following Up: More Reasons for the NBA to Get Woke on China

27 Friday Dec 2019

Posted by Alan Tonelson in Following Up

≈ Leave a comment

Tags

basketball, China, Following Up, Hong Kong, human rights, India, Japan, LawfareBlog.com, National Basketball Association, NBA, Nikkei Asian Review, sports, Uighurs, Victor Cha

Earlier this month, I published a piece on The American Conservative website scolding the National Basketball Association (NBA) and some of its star players and coaches for too often knuckling under to Chinese human rights-related pressure for fear of getting shut out of the People’s Republic’s vast and rapidly growing market. I justified my call for a more outspoken China stance by this normally politically outspoken league by noting that China wasn’t the only big foreign market capable of adding to the league’s already healthy profits and thus to the players’ and coaches’ already titanic salaries. And I observed that in fact, U.S. pro basketball has enough leverage with China to lead a global sports world push for better behavior from Beijing, especially when it comes to Hong Kong and the country’s Uighur Muslim minority.

That’s largely why it’s been great to see these arguments being reinforced lately both by some new NBA-related business developments and by a leading authority on Asian affairs.

On the business front, a recent report from Japan’s Nikkei Asian Review (NAR) observes that the league is indeed continuing full steam ahead with its efforts to win fans and rake in bucks in Japan and India. The former, not so incidentally, is the world’s third largest single national economy (after the United States and China). The latter has a population so huge and still growing so fast that it’s soon expected to surpass China as the world’s biggest.

According to NAR, this fall the NBA played its first games in Japan (exhibitions) in 16 years and the stands were packed. Moreover, the publication cites one estimate claiming explosive recent growth in subscriptions for the streaming service authorized to carry league games.

Further, the NBA’s popularity in Japan looks set to keep surging for the foreseeable future. For next year’s summer Olympics will be held in Tokyo, and the U.S. and other foreign teams slated to compete will contains dozens of NBA stars. And in 2023, Japan will be one of the co-hosts (along with other big Asian countries the Philippines and Indonesia) of the basketball World Cup.

But perhaps the biggest boost to the NBA’s popularity has been Washington Wizards rookie Rui Hachimura. Hachimura isn’t the first Japan-born player to appear in an NBA game. But so far he looks to be the best by far, and could boost the league’s Japanese fan base in ways reminiscent of Yao Ming’s impact in China.

As for India, the league opened its first office in that population giant in 2017, and although its athletes don’t seem NBA- (or major college-) ready yet, but its fans could identify with Vivek Ranadive, Indian-born owner of the Sacramento Kings. And the Kings played the Indiana Pacers in Mumbai this fall shortly before the Japan exhibition games.

Meanwhile, my claim that the NBA possesses ample clout to confront China successfully on human rights issues was seconded recently by Victor Cha, a Georgetown University political scientist and former National Security Council Asia specialist under George W. Bush’s administration. In a December 8 post for the Lawfare blog, Cha wrote:

“China may continue to ban broadcasts of [certain NBA] games, but how long before Chinese people express frustration? It’s not like there is an alternative to NBA stars like Lebron James or Steph Curry for youth on a Chinese basketball team to worship. China’s punishment may be costly in the short term, but in the long run, the demand signal from Chinese consumers will remain strong. And if the Beijing authorities are seen to be standing in the way, the Chinese Communist Party may be doing more harm than good to its own domestic standing. Moreover, the attention brought to the Chinese over the NBA ban could make the Chinese people aware of alternative narratives of the events in Hong Kong beyond the official media’s framing of the protests as criminal, thuggish and unjustified behavior.”

And I would strongly second Cha’s broader conclusion that “China’s predatory liberalism is an affront to the liberal international order, and the NBA, whether intended or not, is now a part of this struggle. Its actions going forward will set precedents, hopefully positive, for governments, companies, and individuals both inside and outside of China.”

(What’s Left of) Our Economy: Trump-Like China Trade War Advice – from China!

08 Friday Nov 2019

Posted by Alan Tonelson in (What's Left of) Our Economy

≈ 1 Comment

Tags

America First, Asia, China, Clyde V. Prestowitz, free trade, globalism, Japan, Long Tongyu, managed trade, protectionism, South China Morning Post, Trade, trade talks, trade war, Trump, {What's Left of) Our Economy

When I first entered the trade and manufacturing world, I worked for a fellow named Clyde V. Prestowitz, Jr., who was shaking up American attitudes on international economic policy (in a good way) with sharp critiques of the prevailing dogma and often ingenious ideas for reform and even transformation. (The most complete statement of his views – this 1988 book.) 

And one of his most intriguing thoughts held that died-in-the-wool protectionist Asian governments like Japan’s would much rather deal with an openly economic nationalist U.S. President than with a standard preacher of free trade. So imagine my (pleasant) surprise to see this morning that a former senior Chinese economic official who still clearly retains much influence express substantial agreement – and in the process light the way for an American approach toward China’s trade transgressions that moves from what might be called a “Trump Lite” strategy that only partly reflects the President’s sharpest instincts to a much more thoroughly America First-oriented policy.

These views can be found in an interview in Hong Kong’s South China Morning Post describing the views of Long Yongtu. This retired Vice Minister led China’s successful decade-and-a-half effort to join the World Trade Organization (WTO) – a top Beijing priority because membership provided the People’s Republic with valuable insulation from unilateral and other foreign efforts to retaliate against its wide range of predatory practices. And although he’s no longer on active duty, he would never, ever make public statements at odds with the beliefs of current Chinese leaders. In fact, folks in his position often float trial balloons for the regime and serve in other ways as unofficial spokespeople.

According to the Post, Long stated that “We want Trump to be re-elected; we would be glad to see that happen.” And why would Beijing prefer to deal with a President who’s imposed tariffs on hundreds of billions of dollars worth of exports on which China depends to achieve adequate growth rates, rather than with Democratic rivals who oppose such measures?

As Long explained, “Trump talks about material interests, not politics.” Further clarifying, he contended that “He makes the US decision-making process efficient and transparent, because he basically says what it is. The pros of [having Trump] outweigh the cons. We don’t need to spend so much time figuring out what Americans want any more, or search for each other’s real thoughts in the dark, like we used to.”

Even more specifically, according to the Post‘s paraphrase, “Despite his fickleness, Trump is a transparent and realistic negotiator who is concerned only with material interests such as forcing China to import more American products, on which Beijing is able to compromise….”

Although Long didn’t use this phrases, it’s clear that he was lauding a Trump trait denounced by the President’s globalist critics – an approach to foreign policy described as “transactional.” In other words, Mr. Trump is more interested in securing relatively immediate, tangible, specific goals when dealing both with allies and adversaries than with more ambitious objectives valued by globalists for their supposed potential to promote U.S. interests most effectively over the long term, whatever the short-term risks or costs – like preserving American alliances and international institutions, and keeping other relationships (i.e., with China) on an even keel. (See this early post-Cold War article of mine for a more complete analysis of such conceptual differences.)

In the process, it’s clear that Long was also endorsing Prestowitz’ belief (which he based on his own personal experiences as a U.S. trade negotiator during the 1980s) that Washington could not hope to succeed with fundamentally different systems like Japan’s (his interlocutor) or, by extension, China, by demanding that these governments agree to American demands for more openness to imports, or broader structural changes that would lead indirectly to better sales for U.S. products and services.

Instead, Washington was much better advised to seek less grandiose but more concrete commitments – specifically, to increase imports by specific amounts.

This shift to “managed trade” or “results-oriented trade” ostensibly horrified the U.S. policy establishment. But the Prestowitz proposal was adopted by former President Ronald Reagan in 1986 in negotiations with Japan over semiconductors, and achieved its objectives of expanding American companies’ share of Japan’s market.

Further, Prestowitz’ main rationale was also echoed in Long’s remarks. He didn’t justify managed trade mainly for the relatively easy verification challenge it presented – although he did emphasize that Washington would be much better able to monitor promises to boost buys of specific products than foreign promises to convert to free trade principles. Nor did Prestowitz stress that such sweeping U.S. demands were unrealistic, and that protectionist countries would respond by simply stonewalling.

Rather, Prestowitz contended that Asian protectionists were genuinely bewildered and frustrated by standard American positions, primarily because the ideas behind them were so alien to their experiences. Similarly, and in line with Long’s views, they didn’t comprehend how negotiations could resolve or bridge differences that ultimately are philosophical or ideological. They much more clearly understood pragmatic haggling over quantities, and Prestowitz argued quite sensibly that superior U.S. leverage could be counted on to persuade these export-dependent economies to treat American imports more generously.

As a result, the implications for Trump trade policy couldn’t be clearer. The United States should drop its demands that China change its policies fundamentally, whether on the intellectual property front or the technology extortion front or the illegal subsidy front or various other non-tariff barrier fronts. (As I’ve previously written, there’s no chance of verifying even genuine Chinese compliance satisfactorily.)

A much better response would be a combination of (1) severely punitive tariffs to make sure that Chinese products benefiting from these practices don’t enter the American market, and harm American-owned producers; and (2) other threatened or imposed tariffs aimed at obliging Beijing to purchase much greater amounts not only of agricultural products, but the full array of advanced manufactured products.  The first set of tariffs would center on those advanced manufactures, the second on more labor-intensive Chinese products – which Beijing relies on heavily to keep employment high enough to keep China’s masses content economically.  

That first set of tariffs would not only prevent U.S.-owned producers from having to deal with heavily subsidized and/or copycat Chinese competition. It would surely prompt China to send these exports elsewhere – and finally pressure the rest of the world to get its own act together in responding to China’s excess capacity building and dumping, rather than relying on the United States to soak up these surpluses.

The second set of tariffs would need to be accompanied by a resolve not to let Beijing off the hook with claims that its own economy simply can’t absorb greater supplies of American goods across the board. Rather than enable China to use free market-oriented excuses after decades of (continuing) state planning and other interventionism, Washington should tell Beijing that, for all the United States cares, it can stick these products into warehouses if genuine customers can’t be found.

This new approach shouldn’t represent the totality of a smarter new U.S.-China economic policy. In particular, the Trump administration should keep sharply restricting Chinese purchases of American hard assets, whether defense-related or not – because why should a basically free market economy welcome state-controlled and bankrolled entities that can only further distort free market forces? And controls on exports or other transfers of advanced technology to Chinese entities will need to be further tightened.

But a shift to managed trade is nothing less than essential. And assuming that Long Tongyu reflects Beijing’s thinking, with enough American consistency and resolve, China would go along before too long.

(What’s Left of) Our Economy: A Vital Globalization Lesson from South Korea

01 Tuesday Oct 2019

Posted by Alan Tonelson in (What's Left of) Our Economy

≈ Leave a comment

Tags

China, Financial Times, industrial policy, Japan, self-sufficiency, South Korea, technology, Trade, {What's Left of) Our Economy

As Americans continue debating the merits of remaining dependent on supplies of key products from China (including state-of-the-art 5G telecommunications technology), a great example of why self-sufficiency can be crucial – along with laying adequate groundwork – has just come from an economy much smaller than the United States’ and capable of standing on its own in many fewer areas: South Korea.

In fairness, never during its remarkable rise from deep impoverishment and war-time devastation has South Korea bought the basic principle underlying the generally open trade (and investment) policies that have shaped the global economy throughout the post-World War II era. That is, its leaders have never been willing to prioritize worldwide efficiency by permitting market forces to determine which of their industries would excel.

Indeed, South Korea has been one of the world’s most hermetically sealed economies and hasn’t even been able to cite legitimate national security concerns for its approach. After all, it’s been staunchly defended by the United States for decades – even enjoying the presence of American military tripwire units aimed at forcing, to the greatest extent possible, Washington to risk nuclear attack on the American homeland in Seoul’s defense.

Recently, however, South Korea encountered an economic threat that it – understandably – concluded posed unacceptable risks to the high tech industries that have created so much of its prosperity. Because of a dispute centering on from compensation for atrocities committed by Japan during its long-time colonial rule over South Korea, Japan in July cut South Korean tech companies off from supplies of three chemicals needed to make numerous key products, including semiconductors and advanced displays (computer and TV screens). Japan also removed South Korea from its list of countries enjoying preferential trade status.

And as the Financial Times reported last week, in response, Seoul has decided not simply to accept that Japan’s curbs would surely reduce the competitiveness of its tech sector, and to leave to the subsequent workings of market forces to determine what types of activity would dominate its economy – and determine its fate. Instead, it’s decided to build up its own capabilities in electronic inputs in order to reduce its vulnerabilities to even broader restrictions that Japan might impose as long as this bilateral trade war lasts – and surely in order to cut its exposure to similar potential threats from elsewhere.

According to the Financial Times, “Seoul plans to invest more than Won 5tn between 2020 and 2022 in research and development, in an attempt to localise about 100 different components and materials in the next five years. South Korea has also said it will provide tax breaks, cut red tape and encourage co-operation between big companies and their small suppliers to accelerate the localisation process.”

Nor is South Korea’s government is unlikely to pay much heed to any whining about short-term cost pain from consumers or companies elsewhere in these high tech supply chains. Its officials “stress the importance of diversification. ‘Cost savings is no longer the best thing for our companies. Risk hedging has become much more important.’”

And Seoul seems completely unimpressed with the warnings from conventional economists, like the one who stated “No country can be fully self-sufficient. Focusing on local substitutes only can bring more negative side effects. They may end up having to buy expensive local parts and materials although they can be easily sourced abroad at cheaper prices.”

For the South Korean government understands that Japan’s cutoffs mean that vital parts and materials may not always, or often enough “be easily sourced abroad at cheaper prices” – or at any prices.

Moreover, although it’s no doubt true, as the article contends, that South Korea is behind Japan technologically, Seoul’s drive for greater self-sufficiency is no pipe dream. For the country has built impressive enough technological wherewithal to endow these policies with a solid foundation. Indeed, there’s considerable evidence that decades of “Korea First” industrialization policies have been keys to the South’s long record of rapid gains in global technological competitiveness.

Not that South Korea has an easy row to hoe, as this piece indicates. But here’s where we come to the lessons for the United States: Despite longstanding and offshoring-friendly trade and globalization policies, it remains the global technology leader and therefore boasts advantages that dwarf South Korea’s – or any other country’s. Even better, it’s developed a tried and true formula for fostering world-class innovation, in high tech industries ranging from pharmaceuticals (think “National Institutes of Health”) to aerospace and software and information technology (think “Pentagon”).

In other words, the United States has more than enough “wallet” to overcome the technology threat posed by China, or any other possible rivals – though the Trump administration’s industrial policy initiatives could stand considerable improvement. But the President’s China trade policies show that, for the first time in decades, the United States has a leader with the will.

← Older posts

Blogs I Follow

  • Current Thoughts on Trade
  • Protecting U.S. Workers
  • Marc to Market
  • Alastair Winter
  • Smaulgld
  • Reclaim the American Dream
  • Mickey Kaus
  • David Stockman's Contra Corner
  • Washington Decoded
  • Upon Closer inspection
  • Keep America At Work
  • Sober Look
  • Credit Writedowns
  • GubbmintCheese
  • VoxEU.org: Recent Articles
  • Michael Pettis' CHINA FINANCIAL MARKETS
  • New Economic Populist
  • George Magnus

(What’s Left Of) Our Economy

  • (What's Left of) Our Economy
  • Following Up
  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

Our So-Called Foreign Policy

  • (What's Left of) Our Economy
  • Following Up
  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

Im-Politic

  • (What's Left of) Our Economy
  • Following Up
  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

Signs of the Apocalypse

  • (What's Left of) Our Economy
  • Following Up
  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

The Brighter Side

  • (What's Left of) Our Economy
  • Following Up
  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

Those Stubborn Facts

  • (What's Left of) Our Economy
  • Following Up
  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

The Snide World of Sports

  • (What's Left of) Our Economy
  • Following Up
  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

Guest Posts

  • (What's Left of) Our Economy
  • Following Up
  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

Blog at WordPress.com.

Current Thoughts on Trade

Terence P. Stewart

Protecting U.S. Workers

Marc to Market

So Much Nonsense Out There, So Little Time....

Alastair Winter

Chief Economist at Daniel Stewart & Co - Trying to make sense of Global Markets, Macroeconomics & Politics

Smaulgld

Real Estate + Economics + Gold + Silver

Reclaim the American Dream

So Much Nonsense Out There, So Little Time....

Mickey Kaus

Kausfiles

David Stockman's Contra Corner

Washington Decoded

So Much Nonsense Out There, So Little Time....

Upon Closer inspection

Keep America At Work

Sober Look

So Much Nonsense Out There, So Little Time....

Credit Writedowns

Finance, Economics and Markets

GubbmintCheese

So Much Nonsense Out There, So Little Time....

VoxEU.org: Recent Articles

So Much Nonsense Out There, So Little Time....

Michael Pettis' CHINA FINANCIAL MARKETS

New Economic Populist

So Much Nonsense Out There, So Little Time....

George Magnus

So Much Nonsense Out There, So Little Time....

Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy