(What’s Left of) Our Economy: A Win for Transparency on Corporate Vulnerability to China

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China, Congress, investment, multinational companies, national security, offshoring, Securities and Exchange Commission, Steve Milloy, The Wall Street Journal, Trade, transparency, {What's Left of) Our Economy

Here’s a development in U.S.-China economic relations that’s potentially game-changing, and that yours truly finds particularly satisfying: The Securities and Exchange Commission (SEC), the federal agency largely responsible for regulating U.S. financial markets require companies publicly traded in America to open their books wide on their ties with and reliance on China.

It’s potentially game-changing because ever since the early 1990s, Washington stepped on the gas to encourage the expansion of trade and investment with China (including massive factory and manufacturing job offshoring), but permitted the multinational companies that by far benefited most from these practices to control the release of most of the information capable of gauging the impact on the broader economy.

The result: When the American political system set its China economic policy priorities, it was forced to rely on the offshoring companies themselves for crucial information on the employment and production fall-out at home. And naturally, these firms – along with the sympathetic economists and think tank hacks they funded – presented Members of Congress and journalists with only cherry-picked facts and figures suggesting that the domestic winners far outnumbered the losers.

But this playing field may be in for major leveling thanks to the work of Steve Milloy of the Energy and Environmental Legal Institute. Milloy, a former SEC attorney, has persuaded the Commission to approve his proposal for a “Communist China Audit,” that would ask “companies to disclose to shareholders the extent to which their business relies on China.”

Milloy’s rationale, as explained in a Wall Street Journal op-ed earlier this week? A Chinese invasion of Taiwan would thoroughly disrupt the extensive commercial ties many public companies maintain with China (which include crucial supply chain dependencies of all kinds), and threaten their bottom lines – and the portfolios of their shareholders – with massive losses. In turn, the entire national economy would take a staggering hit. He rightly adds, moreover, that China’s hostility now extends nearly across the board of major U.S. interests.  

Multinational and other public companies are already required to tell shareholders about the various risks they run. But everyone who has looked through their quarterly and annual financial statements knows that politics and geopolitics risk disclosures are invariably vague and scanty, and details on their China-related operations almost non-existent.

Indeed, the author reports that the SEC is already pushing public companies to reveal how significantly Russia’s invasion of Ukraine is affecting their businesses. Since China’s impact on American companies, their shareholders, and the entire American economy is so much greater, he rightly argues that full transparency on this front is all the more important.

I was thrilled to learn about Milloy’s ideas and successes because for many years, I’ve been advocating something very similar. As I wrote in this 2017 post, Congress should pass and a President should sign what I called a “Truth in Testimony Act.” The measure would require any multinationals representatives appearing before Congress on an international trade or investment or technology-related issue

“to specify their job and production offshoring, the wages of their U.S. and overseas workers, their foreign and domestic procurement, the foreign and domestic content of their products, and similar statistics.”

I also recommended that time series be provided, in order to identify long-term patterns. In addition, I pointed out, comparable information has been required of auto-makers selling in the United States since the 1990s, so major precedent exists. And I urged similar requirements for a full range of businesses and their representatives when testifying before the House and Senate, and called for their think tank and academic spokespersons to come clean on all relevant sources of their funding.

Businesses have long protested that such requirements would deprive them of valuable trade secrets and other prime sources of competitive advantage. I countered that (a) if full disclosure is a must for everyone, then no one wins or loses on net; and (b) companies unconvinced by this argument would remain free to opt out of telling Congress their stories.

Milloy’s proposal, however, matters much more, because it would apply to the entire universe of public companies whether they appear before lawmakers or not.

So I’ll be trying to get in touch with him to see if I can help his China audit campaign in any way, and report back on the results, and on any further progress he’s made. As I wrote five years ago, for far too long, the U.S. government has been flying blind on China and other international economic issues and relying on unreliable, incomplete information. Milloy is right in emphasizing that the China threat in every dimension has metastasized. Nothing less than full corporate China-related transparency can be acceptable.

(What’s Left of) Our Economy: An Epic Wall Street Journal Fail on Trump Tariffs

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aluminum, beverages, Donald Trump, tariffs, The Wall Street Journal, Trade, {What's Left of) Our Economy

The Wall Street Journal‘s recent editorial on how U.S. tariffs on aluminum imports are decimating the American American beverage industry serves at least one useful purpose: It makes clear that the newspaper’s editorial writers either don’t understand the importance of presenting data in context, or don’t care because they know the big picture would kneecap their argument.

According to this piece, these Trump-era levies show the dangers of trade barriers that “are a form of industrial policy that is really about favoring some producers at the expense of consumers,” and are fueling current inflation to boot. Their main evidence? First, that Since the tariffs were imposed in March, 2018, U.S. beverage manufacturers have “paid an equivalent of $1.4 billion in Section 232 aluminum tariffs through February 2022 [for the aluminum they use in cans”; and second, that this industry paid $463 million in tariff costs in 2021 alone.

The fueling inflatio argument can be dispensed with easily. In 2021, the U.S. economy produced just under $23 trillion worth of goods and services before factoring in inflation. (I’m using pre-inflation data throughout this post because that’s the gauge used by the Journal for tariff costs.) The non-durable goods sector (in which beverages are found) generated $3.455 trillion. As anyone can see at a glance, $463 million as a percentage of these totals is miniscule – to put it charitably. Its percentage of the non-durable goods sector alone is just 0.013. And these added costs are moving the needle on overall U.S. inflation exactly how?

But even when you look at the beverage industry by itself, the inflation and cost burdens fade into insignificance. Although official data are hard to find, this source pegs the sector’s total U.S. sales at $253.42 billion. The $463 million in tariff costs represents a grand total of 0.18 percent of that total. If the industry finds that amount crippling, or even noteworthy, it desperately needs new management.

More detailed data are available from individual corporate reports, and point to the same conclusion. This Yahoo Finance item presents the top ten beverage companies operating in the United States by revenue. Add up the figures and you get a $174.09 billion total for last year. The tariff costs as a share of that sum? A thoroughly unimpressive 0.27 percent.

But what about the all-important bottom line? The individual corporate reports of these publicly trade companies reveal this figure to have been $36.74 billion in 2021. The aluminum tariff costs come to 1.26 percent of that total. No one can blame companies for wanting to make every single dollar of profit they can (lawfully), but do the Wall Street Journal editorial writers really believe that the executives of these firms can’t compensate by increasing efficiency? If so, can them all. (Pun intended.)

Finally, the corporate reports also show the total costs incurred by these ten companies in order to produce their products. Last year, they amounted to $76.77 billion. So the tariff costs increased this amount by 0.60 percent. Again, this is worth a pity party? 

The Wall Street Journal editorial board — like everyone else — has a perfect right not to like any and all tariffs, on aluminum or anything else. It also has a perfect right (unless you don’t believe in freedom of the press) to cherry pick the facts to make its case. But readers and others also have rights — including the right to know when a publication is using Fake Commentary tactics like this to make its case, and to wonder whether, if this is the best this staff can do to discredit tariffs, any solid grounds to oppose them exist at all.

Following Up: A Learning Curve on Ukraine Polling

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CBS News, No-Fly Zone, nuclear war, Our So-Called Foreign Policy, Pew Research Center, polls, public opinion, Quinnipiac University poll, Reuters/Ipsos, Russia, The Wall Street Journal, Ukraine, Ukraine invasion, Ukraine-Russia war, YouGovAmerica

We’re getting some clarity from the – always imperfect – polls on whether Americans support direct U.S. military involvement in the Ukraine war, and the news is mostly good. Specifically, strong majorities currently reject “boots on the ground” and even the more limited no-fly-zone proposal for fear of risking nuclear war with Russia.

In other words, we know more than we did a little more than a week ago, when the Reuters news organization and the Ipsos polling concern asked respondents their views on the no fly zone, but didn’t mention the nuclear war thing in their question. That’s about as smart as asking someone whether they’d take medicine A to cure disease B without mentioning that medicine A could cause an even worse disease C.

Even weirder, the Reuters article describing the survey’s results actually pointed out this crucial omission. Just for the record, though, Reuters and Ipsos weren’t the only examples of polls completely ignoring vital context, as this YouGoveAmerica post makes clear.

But it seems that pollsters are displaying a learning curve – even in the foreign policy field in which, as the above linked RealityChek post shows, they’ve been especially clueless.

For instance, the YouGovAmerica outfit followed up its first ditzy survey on the No Fly Zone with another that – unlike its initial soundings – defined the idea (without naming it) rather than asking if people support it “without a definition.” What a concept! And once respondents were presented with the fact that American pilots shooting at Russian military planes, support fell support fell substantially.

A similar YouGov exercise for CBS News yielded much more opposition to the No Fly Zone. When it was simply mentioned by name, it enjoyed 59 percent to 41 percent backing. When respondents were told this would mean “U.S. forces might have to engage Russian aircraft, and be considered an act of war by Russia,” the results more than flipped. Sixty two percent opposed the idea and only 38 percent favored it.

Earlier this week, the Pew Research Center found that Americans opposed the United States “taking military action” in Ukraine “if it risks a nuclear conflict with Russia” by 62 percent to 35 percent – a margin much wider than that in the YouGovAmerica poll.

Also this week, the polling center at Quinnipiac (Conn.) University mentioned that a No Fly Zone “would lead NATO countries into a war with Russia.” Opponents prevailed over supporters by 54 percent to 32 percent.

Interestingly, much more public caution was displayed concerning the question of whether the United States “should do whatever it can to help Ukraine, even if it means risking a direct war between the U.S. and Russia” or “do whatever it can to help Ukraine, without risking “such a direct war. The don’t-risk-war option won out by 75 percent to 17 percent.

I’ve found less information on an early March Wall Street Journal poll (including on the phrasing of the questions), but it, too, revealed meager support for direct U.S. military involvement in Ukraine. Only 29 percent of respondents backed the N0 Fly Zone, and only ten percent would “send U.S. troops” to the country.

So why did I say at the outset that the polling news was only “mostly good”? Because in my view, the shares of Americans reportedly willing to risk nuclear war over Ukraine are still alarmingly high – in the 30s and 40s percents, except for the Wall Street Journal poll. It makes me wonder whether the mere mention of nuclear war is enough to show the full potential magnitude of these positions. Maybe respondents should have to watch, for example, this movie, too.

Our So-Called Foreign Policy: Will a Russian Victory Really Bring On a World at War?

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Antony J. Blinken, Biden, China, Council on Foreign Relations, East China Sea, globalism, Japan, Kim Jong Un, national interests, North Korea, Our So-Called Foreign Policy, Russia, South China Sea, South Korea, Taiwan, The Wall Street Journal, Ukraine, Ukraine-Russia war, Vladimir Putin, war, Xi JInPing

Not only do American leaders seem pretty united on the need for the nation to do much more to help Ukraine defend itself from Russian invaders. They and the (overwhelmingly globalist) American political and chattering classes seem largely in agreement on one of the main consequences either of permitting Russia to win, or permitting him to win without inflicting major, lasting damage on Russia’s economy – a return to a world in which aggressive dictators like Russia’s Vladimir Putin will feel much freer than they have for decades to attack their neighbors.

That fear definitely has a troubling ring of reasonableness – and all the more so since, unlike previous historical eras in which such attacks and invasions were much more common, some of the actors possess nuclear weapons.

But there’s something these warnings are overlooking. However vivid such dangers are in principle, it’s hard to identify actual places around the world where potential conquerors have been bidng their time until receiving just the kind of signal that a Russian success in Ukraine allegedly would send.

If you doubt the prominence of this argument for greater U.S. involvement in the conflict, you haven’t been paying attention. For example, in his first public remarks after the invasion, President Biden claimed that “Putin’s actions betray his sinister vision for the future of our world — one where nations take what they want by force.”

In a speech a month earlier, his Secretary of State, Antony J. Blinken, asserted that one of the post-World War II global order’s guiding principles was a rejection of

“the right of one country to change the borders of another by force; to dictate to another the policies it pursues or the choices it makes, including with whom to associate; or to exert a sphere of influence that would subjugate sovereign neighbors to its will.

“To allow Russia to violate those principles with impunity would…send a message to others around the world that these principles are expendable, and that, too, would have catastrophic results.”

The conservatives on the Wall Street Journal editorial board, who don’t agree with the Biden administration on much of anything, similarly contended that “Whether the West admits it or not, the invasion is setting a precedent for what the world will tolerate in the 21st century.”

But check out this assessment of worldwide hot spots from the Council on Foreign Relations, often called the seat of America’s globalist foreign policy establishment. Where exactly are the Putins of tomorrow whose will to international power would be even be sharpened by a Russian victory in Ukraine?

Certainly not on the Korean peninsula or in the East China Sea. North Korea no doubt has designs on neighboring South Korea, but they’ve existed for decades. Ditto for China and Taiwan. It’s true that Kim Jong Un and Xi Jinping might be emboldened by an inadequate U.S. and international response to Putin’s war. But not from any relief that global norms of behavior that had been holding them back had weakened, or that a Russian victory had set some a kind of precedent – with binding power? Because they take the idea of rule of law more seriously in their treatment of foreigners than they do in their treatment of their own people? Please.

Other than these Asian conflicts – which also include China’s expansionism in the South China Sea, but which also long predate the Ukraine war – where are the aggressors-in-waiting who may feel freer to attack their neighbors? Should we include the other East China Sea dispute, where China is involved, too – even though U.S. allies Japan and South Korea are also contesting each other’s claims to some miniscule islands?

More important, where are the global hot spots where current or potential territorial rivalries could explode into conflict that would imperil global peace and security – including America’s? Nagorno-Karabakh (on the border of Armenia and Azerbaijan, unless you’ve been following this tiff closely)? As Mr. Biden would say, “Come on, man.”

I’m sure that there are flashpoints in sub-Saharan Africa that could eventually embroil entire regions in warfare. But it’s as cold-blooded as it is true that these are regions so chronically dysfunctional (and therefore largely disconnected from the wider world) that even complete chaos has no potential to spread much further – or inspire conqueror wannabees in regions of greater concern.

Closer to home for the United States, according to the Congressionally founded U.S. Institute of Peace, some small countries in Latin America have been quarreling with neighbors over territory since 1990, and if they did ignite conflict, refugees would of course come streaming to U.S. borders. But only once – in 1995 – did one of these feuds result in war (between Ecuador and Peru). And I’m glad I don’t have to make the argument that revanchists in either country are chomping at the bit to get a symbolic green light from a Russian victory in Ukraine.

The big takeaways here clearly are (1) that the world isn’t a tinderbox likely to burst into a series of truly dangerous international conflicts depending on the outcome of Russia’s war on Ukraine; and (2) that the potential conflicts that can affect the United States consequentially are and have long been driven by their own dynamics (including current and longstanding American approaches to these situations).

So as has been the case since Russian policy toward its neighbors became more belligerent, what should be driving the U.S. response should be examinations concerning the nature of concrete, specific U.S. interests that are or are not at stake. Claims that Ukraine’s continued independence and full sovereignty are all that stand between today’s relative calm among countries (if not in terms of civil conflicts) and an entire globe engulfed in war deserve the same fate as previous alarmist concotions like the domino theory – getting tossed onto what former President Reagan memorably called the “ash heap of history.”

Our So-Called Foreign Policy: The Ukraine Crisis Grows Curiouser and Curiouser

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Annaleena Baerbock, Biden adminisration, China, democracy, deterrence, Eastern Europe, energy, European Union, Germany, human rights, Italy, Mario Draghi, NATO, natural gas, Nordstream 2, North Atlantic treaty Organization, Olaf Scholz, Our So-Called Foreign Policy, Phase One, Poland, Russia, sanctions, sovereignty, Taiwan, tariffs, The Wall Street Journal, Trade, trade war, Ukraine

The longer the Ukraine crisis lasts, the weirder it gets. Here are just the latest examples, keeping in mind that new developments keep appearing so quickly that this post might be overtaken by events before I finish!

>What’s with the Chinese? Toward the end of last year, (see, e.g., here) I’ve been worried that President Biden’s Ukraine policy would push Russia and China to work more closely to undermine U.S. interests around the world – a possibility that’s both especially worrisome given evident limits on American power (Google, e.g., “Afghanistan”), and completely unnecessary, since no remotely vital U.S. interests are at stake in Ukraine or anywhere in Eastern Europe.

In the last week, moreover, numerous other analysts have voiced similar concerns, too. (See, e.g., here and here.)

But just yesterday, The Wall Street Journal published this piece reporting on Chinese words and deeds indicating that Beijing opposed any Russian invasion of Ukraine. You’d think that China would welcome the prospect of significant numbers of American military forces tied down trying to deter an attack by Moscow on Ukraine, or on nearby members of the North Atlantic Treaty Organization (NATO), or getting caught up in any fighting that does break out. The result of any of these situations would be an America less able to resist Chinese designs on Taiwan forcibly.

It’s unimaginable that Chinese leaders have forgotten about these benefits of war or a continuing state of high tensions in Ukraine’s neighborhood. But according to the Journal, Beijing has decided for the time being that it’s more important to avoid further antagonizing the United States on the trade and broader economic fronts – specifically by helping Russia cushion the blows of any western sanctions. China is also supposedly uncomfortable with the idea of countries successfully intervening in the internal affairs of other countries – because of its own vulnerability on the human rights front, and because it regards foreign (including U.S.) support for Taiwan as unacceptable interference in its internal affairs, too (since it views Taiwan as a renegade province).

Not that China isn’t already acting to prop up Russia’s economy – specifically agreeing earlier this month to buy huge amounts of Russian oil and gas. But if Beijing has indeed decided to go no further, or not much further, the potential effectiveness of western sanctions on Moscow would be that much greater. It would also signal that the Biden adminisration has much greater leverage than it apparently realizes to use tariffs to punish China for various economic transgressions – e.g., failing to keep its promises under former President Trump’s Phase One trade deal to meet targets for ramping up its imports from the United States.

>Speaking of sanctions, the Biden administration view of these measures keeps getting stranger, too. The President and his aides have repeatedly insisted that the best time for imposing them is after a Russian invasion of Ukraine, because acting beforehand would “lose the deterrent effect.”

But this reasoning makes no sense because it – logically, anyway – assumes that the sanctions that would be slapped on would achieve little or nothing in the way of inflicting economic pain powerful enough either to induce a Russian pullback or convince the Kremlin that further aggression along these lines wouldn’t be worth the costs.

After all, pre-invasion sanctions would be taking their toll while the Russians were fighting in Ukraine, and until they pulled out or made some other meaningful concession. The Biden position, however, seems to be that in fact, during this post-invasion period, they’d be taking scarcely any toll at all – or at least not one significant enough to achieve any of their declared aims. If that’s the case, though, why place any stock in them at all at any time?

>One reason for these evidently low Biden sanctions expectations is surely that, at least for now, the administration isn’t willing to promise that the potentially most effective punishments will be used. Nor are key U.S. allies.

Principally, last Friday, Deputy National Security Adviser Daleep Singh told reporters that banning Russia from the global banking system would “probably not” be part of an initial sanctions package. And Germany keeps hemming and hawing about ending the Nordstream 2 gas pipeline project even if Russia does invade.

The Germans – and the rest of Europe – are now acting like they’re taking seriously the need to reduce their reliance on Russian natural gas (which currently supplies some forty percent of their supplies of this fossil fuel. But Berlin has still not committed to cancelling its plans to buy even more gas from Russia via the recently completed Nordstream channel. (The pipeline isn’t yet in use because the Germans are in fact dragging their feet on final regulatory approval.) Foreign Minister Annalena Baerbock has declared that Nordstream is “on the table” for her if the Russians move militarily. But nothing even like this non-promise has been made by Prime Minister Olaf Scholz. And last Friday, Italian Prime Minister Mario Draghi said he opposes including energy in anti-Russia sanctions.

>The final puzzle: Although Poland is a linchpin of NATO’s strategy for preventing any Putin aggression beyond Ukraine, the European Union has just moved a major step closer to cutting the country off from the massive economic aid it receives from the grouping, and indeed has already frozen $41 billion in CCP Virus recovery funds it had previously allotted to Warsaw.

The decisions stem from Poland’s alleged backsliding on commitments it made to protect human rights in order to join the EU, but blocking these resources isn’t exactly likely to strengthen Poland’s ability to aid in the effort to contain Russia, and Ukraine itself is hardly a model democracy (see, e.g., here and here) – all of which can’t help but scramble the politics of the crisis in Eastern Europe yet further. And all of which should be added to the already impressive list of paradoxes, ironies, mysteries, and curiosities that everyone should keep in mind whenever they hear about the future of Europe, the global liberal order, world peace, and human freedom itself being at stake in Ukraine.    

Im-Politic: Latinos Flocking to a (Still Trump-ian) Republican Party

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Axios-Ipsos Poll, Biden, Democrats, Donald Trump, election 2016, election 2020, election 2022, election 2024, exit polls, Glenn Youngkin, Hispanics, Im-Politic, Immigration, Latinos, NPR-Marist Poll, Pew Research Center, polls, public opinion, Republicans, The Wall Street Journal, Virginia governor's race

Remember all those those charges that former President Donald Trump made clear from the very beginning of his 2016 presidential campaign that he was an anti-Latino bigot, and the predictions that any political success he enjoyed would doom Republican chances of winning support from this increasingly important group of voters?

Apparently, many Latino voters themselves don’t. Or they’ve concluded that Trump and now dominant Republican views on sensible controls on immigration matter less to them than views on other issues. Or that they actually like Trump and the Republicans on some combination of these subjects – including immigration. Or that maybe the Republican positions aren’t terrific, but that what the Democrats have stood for lately is a non-starter.

That’s the message being sent lately by several recent polls on Latino political views that could decisively shape American politics for the foreseeable future.

First, though, some context. There’s little doubt now that four years of Trump-ism wound up boosting the former President’s support among Latinos, now further shrinking it. In 2016, Trump won 28 percent of their presidential vote. In 2020, this figure had grown to 32 percent according to the eixt polls. (This subsequent study pegs his 2020 total at 38 percent.)  And of course, in some key states, the exit polls showed, his 2020 performance was far better – notably Florida (46 percent) and Texas (41 percent). So the racism and xenophobia charges were showing signs of flopping while throughout Trump’s term in office.

Even so, the results of a Wall Street Journal survey conducted in the second half of November came as a major shock. They showed that if Trump was running for the White House against President Biden today, he’d lose by only 44 percent to 43 percent among Latino voters. And they said they’d be even split at 37 percent in their votes for Democratic and Republican Congressional candidates.

As noted in this analysis, the poll’s sample size was very small, so serious doubts in its accuracy are justified. But similar results have been reported elsewhere. Yesterday, notably, National Public Radio and Marist College released a survey showing that just 33 percent of Latino adults approved of President Biden’s performance in office, versus 65 percent who disapproved. These Biden Latino numbers were worse than his ratings from American adults as a whole (41 percent approving and 55 percent disapproving).

Moreover, only 11 percent of Latino adults “strongly approved” of Mr. Biden’s presidency so far, versus 17 percent of U.S. adults overall, and when it came to strong disapproval, 52 percent of Latinos marked that column compared with 44 percent of the total national adult population.

Nor does the evidence stop there that the longer Mr. Biden has been in office, the less Latinos like his perfomance. As this Washington Post column reminds, “In late May, Biden’s job approval among Hispanics averaged 60 percent, with a net approval margin of 32, a bit larger than his vote margin the prior year.”

Biden backers and Democrats can point to a new Axios-Ipsos survey reporting that “The Democratic Party enjoyed huge advantages over the Republican Party when Latino respondents were asked which party represents or cares about …..” But after that ellipsis comes the finding that “those advantages evaporated when it came to the economy and crime.”

Democrats own a clear edge among Latinos on one major issue, though: the CCP Virus pandemic. According to the Axios-Ipsos results “respondents were much more likely to say Democrats were doing a good job of handling COVID-19 as a health challenge — 37% to 11% for Republicans, with another 17% saying both are doing a good job.” 

But Axios-Ipsos has been a major outlier lately, as made clear in this analysis that looks not only at this year’s polls but the Virginia gubernatorial election, which saw victorious Republican candidate Glenn Youngkin actually win the state’s Latino vote.  The conventional wisdom seems to hold that Youngkin prevailed in large measure because he held Trump at arm’s length. But in light of all the other survey results, maybe that’s wishful Mainstream Media thinking?      

It’s still a long way even to the 2022 Congressional elections, much less the 2024 presidential race. But unless the President and his party can turn their sagging fortunes around, it looks like they’re rapidly running out of time with Latinos – who are increasingly flocking to a Republican Party still strongly influenced by Donald Trump.  

Our So-Called Foreign Policy: Brazen U.S. Corporate Collusion with China

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aerospace, Belt and Road, China, globalization, Honeywell, human rights, manufacturing, multinational companies, multinationals, national security, Our So-Called Foreign Policy, steel, tech, tech transfer, The Wall Street Journal, Uighurs, Xinjiang

Usually, it’s not a terrific idea to begin a piece of writing with a phrase like, “If you want to see something that’ll make you sick to your stomach….” But I think you’ll agree that this recent article from The Wall Street Journal justifies an exception. For its portrayal of the China operations of U.S.-owned multinational manufacturer Honeywell depicts a big company actively helping the dangerous thug dictatorship in Beijing endanger often-intertwined American security and economic interests, and evidently doing so without even a peep of protest from Washington – including during the Trump years.

Journal reporter Trefor Moss’ piece dealt with the question, “How can an American company thrive in China at a time when tensions between the two countries are running high?” His answer: Under Honeywell’s long-time head of China operations, it pursued a strategy of fully immersing “the company in Chinese business and culture—and [not shying] away from helping Chinese companies achieve strategic goals set by Beijing.”

This approach was worrisome enough when this executive, Shane Tedjarati, launched Honeywell China down this path in 2004. By that time, Beijing was not only gutting America’s domestic manufacturing base with a wide range of predatory trade and broader economic practices. But it had also compiled a record of challenging American national security interests through policies like supplying countries like Iran and North Korea with technologies vital to developing weapons of mass destruction and the missiles needed to deliver them.

Now that the People’s Republic has since at least early 2018 been seen as a threat to critical American interests in the Indo-Pacific region requiring a “whole-of-government” response, and that President Biden has declared that “We’re in competition with China and other countries to win the 21st Century. We’re at a great inflection point in history” and that “we’ll maintain a strong military presence in the Indo-Pacific…not to start a conflict, but to prevent one,” activities like Honeywell’s in China look alarmingly like colluding with an enemy.

What else can be made of Tedjarati’s position as “a visiting professor at Shanghai’s China Executive Leadership Academy, an elite school that provides leadership training to the Communist Party’s rising stars.”

Or of Honeywell’s sale of industrial automation equipment to one of the state-owned Chinese steel companies that for years been glutting global markets with dumped and artificially cheap product that’s hammered America’s own sector?

Or of its “open” support for the Belt and Road Initiative, the Chinese global infrastructure plan widely seen as a way for Beijing to expand its worldwide influence, and that’s got the Biden administration concerned enough to be mounting a U.S. response?

Or of these Honeywell actions (which didn’t make the Journal piece) “[T]he company repeatedly, between 2011 and 2018, sent drawings of parts of US military aircraft to suppliers in foreign countries, including China, asking for price quotes, according to a Department of State charging letter. The manufacturer voluntarily disclosed the violations.

“The engineering prints showed layouts, dimensions and geometries for manufacturing castings and finished parts for military aircraft and engines, as well as other hardware and weaponry. Drawings for parts within the Lockheed Martin F-35 and F-22 stealth fighters, Boeing B-1B supersonic bomber and Pratt & Whitney F135 turboshaft engine were included.”

For good measure, Honeywell has also supplied protective equipment to Chinese security forces operating in western Xinjiang province, where Beijing has been harshly persecuting the Muslim Uighur minority group.

Honeywell did pay a (tiny) fine for its seven years of sharing those drawings. But overall, according to Moss, Tedjarati told him that “No U.S. or Chinese officials have ever told him the company should do, or should avoid doing, specific things in China.”

Honeywell has by no means been the only U.S. multinational to enrich China and strengthen it militarily and technologically for decades. (See, e.g., here and here.) But it may have just won the award for the most brazen. And until these kinds of operations are halted completely, it’ll be hard to describe America’s China policy with the word “serious.”

Full disclosure:  I have no financial positions whatever in Honeywell, other than possibly through index funds or exchange-traded funds, and other such vehicles, and have no plans to acquire any.

Following Up: Welcome Shrinkage of China’s Ties with U.S. News Organizations

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Boston Globe, Chicago Tribune, China, China Daily, ChinaWatch, Following Up, Houston Chronicle, journalism, Mainstream Media, news media, propaganda, The Los Angeles Times, The New York Times, The Wall Street Journal, The Washington Free Beacon, The Washington Post, transparency

Since Memorial Day is – or at least should be – a remembance and tribute to what’s best about America, it seems appropriate to report some good news: Some of the nation’s leading news organizations have cut some not-at-all-trivial ties with China.

These ties concern their decision to stop distributing with their print editions and posting on their websites a Chinese government propaganda vehicle called ChinaWatch. As I wrote more than two years ago, their decision to present ChinaWatch and the form of this presentation created two problems. First, although the Constitution’s First Amendment should authorize giving even possibly genocidal, increasingly hostile dictatorships the right to present their material in the United States, journalistic ethics and (I believe) the law should require the clear labeling of any such material as foreign government products.

I argued that neither the Chinese government nor the news organization’s carrying their material met these obligations.

Second, since ChinaWatch was paid advertising, it became a source of revenue for the news organizations that featured it, and because these news organizations covered the Chinese government, its appearance raised conflict of interest questions that at least should have – but weren’t – have been forthrightly acknowledged. Importantly, some news organizations have received millions of dollars from Beijing – not decisive sums in terms of the overall finances of some of them, but not trivial, either.

Happily, these problems have now been reduced, although not eliminated. The New York Times said about a year after my post that it had stopped accepting such material from all state-run media. According to this Tibetan dissident publication, the same goes for The Wall Street Journal. The Washington Post says it has not run or distributed ChinaWatch specifically since 2019.

Official U.S. government lobbying records show, however, that multi-million dollar relationships still exist between several major U.S. news organizations and Beijing’s propaganda machine. As reported last week by the Washington Free Beacon, over the last six months,

“China Daily [the parent organization of ChinaWatch] paid more than $1.6 million for advertising in Time magazine, the Los Angeles Times, Financial Times, and Foreign Policy magazine, according to disclosures filed with the Justice Department. The Beijing-controlled news agency paid another $1 million to American newspapers, including the L.A. Times, Chicago Tribune, and Houston Chronicle, to print copies of its own publications.”

And unlike the The New York Times, the Post, and the Journal, the Free Beacon observes,

“Many of the newspapers [still] working with China Daily face severe financial problems. The Los Angeles Times furloughed workers last year as advertising revenue cratered during the coronavirus pandemic. Papers like the Chicago Tribune and Boston Globe have failed to turn a profit for years.”

The nation’s news organizations have more than enough credibility problems these days (see, e.g., here and here). Severing all official ties with Chinese and other foreign government media, or at least making every effort to publicize them to their readers, could only help them regain some of that trust.

(What’s Left of) Our Economy: More Evidence of U.S. Manufacturing’s Tariff-Bolstered Resilience

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CCP Virus, China, Commerce Department, coronavirus, COVID 19, imports, Jobs, Labor Department, manufacturing, recession, recovery, tariffs, The Wall Street Journal, Trade, Trump, value added, Wuhan virus, {What's Left of) Our Economy

I must confess that I’m more than a little confused. On the one hand, I read in The Wall Street Journal two days ago that the Trump administration “used tariffs to try to drive manufacturing back home, although growth in factory jobs stalled once the administration resorted to levies that drove up costs for many factories.”

On the other hand, I read in The Wall Street Journal yesterday that U.S.-based manufacturing is recovering “quicker than expected” from the CCP Virus- and lockdowns-induced American recession. Moreover, this stellar performance is taking place amid “higher costs for materials used in everything from kitchen cabinets to washing machines to automobiles.”

Stranger still: Unquestionably, among the cost drivers for these materials have been those Trump tariffs, especially on imports from China – which are not only wide-ranging (covering some $360 billion worth of Chinese-made products when they were imposed in phases), and steep (with most standing at 25 percent).

In fact, “stellar” really isn’t the best adjective for the manufacturing surge. Try “record-shattering.” For the Commerce Department’s “GDP by Industry” statistics show that between the second and third quarters of this year, manufacturing value-added (an output measure that tries to eliminate the double-counting that results from including in manufacturing production levels both final products and all the parts, components, and materials that go into those products) shot up by 13.34 percent at an annual rate. That’s not only never happened before. It’s never come close to happening before – at least since 2005, when the relevant data series began.

To be fair, this growth stemmed from the rubberband-like effect of partial virus-related reopenings of economic activity. Specifically, it followed a record 12.47 percent nosedive between the first and second quarters. But who can reasonably doubt that the immense scale of the Trump tariffs suppressed the amount of Chinese goods that could have satisfied this renewed demand, as they had done so typically in the recent past – especially since China’s export machine recovered exceptionally quickly from the People’s Republic’s own virus outbreak and massive shutdowns?

Moreover, who can reasonably doubt that the exclusion of these imports from the U.S. market more than offset whatever price increases the tariffs created? Because however much these levies are reducing companies’ earnings and profits, every sale lost to a China-based rival – whether at home or abroad – means much less in the way of earnings and profits. 

And this strong American manufacturing growth pickup has put an end to that short-lived manufacturing jobs slowdown. From April of last year (when the CCP Virus’ economic impact peaked on a monthly basis ) through December, Labor Department data show that U.S. industry’s payrolls are up by 820,000 – much faster growth than the 37,000 increase during the same period in 2019. Of course, the incredibly abnormal sudden stop-and-start of virus-era economies not just in the United States but the world over (and in largely unsynchronized ways) sharply limits the use of all such comparisons, because they have so relatively little to do with the economic fundamentals.

At the same time, though, it’s entirely reasonable to expect U.S. manufacturing production and employment to keep expanding as post-CCP Virus normality returns. And as long as the Trump tariffs remain largely in place, the prospect of a renewed Chinese import flood will be one major headwind that domestic industry won’t have to fear.

Im-Politic: The Swalwell Spy Scandal News Blackout Extends Far Beyond the NY Times

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ABC News, Associated Press, Bloomberg.com, CBS News, China, Christine Fang, Eric Swalwell, espionage, Fang Fang, Fox News, Im-Politic, Mainstream Media, McClatchy News Service, media bias, Michael Bloomberg, MSM, MSNBC, NBC News, NPR, PBS, Reuters, spying, The New York Times, The Wall Street Journal, USAToday

If you’re a news hound, you know that The New York Times, long – and long justifiably – seen as the most important newspaper in the world, has devoted exactly zero coverage to a bombshell report earlier this month that California Democratic Congressman Eric Swalwell several years ago was pretty successfully targeted by a spy from China.

And if you don’t know about this Swalwell story, you should. He’s a member of the House Intelligence Committee, which means that he’s been privy to many of the nation’s most important national security secrets. In addition, he has long been a genuine super-spreader of the myth that President Trump is a Russian agent. So although there’s no evidence so far that Swalwell either wittingly or unwittingly passed any classified or otherwise sensitive information to this alleged spy, understandable questions have been raised about his judgement and therefore his suitability for a seat on this important House panel. Further, he hasn’t denied having an affair with this accused operative, who was known as Christine Fang here, and Fang Fang in her native country.

In other words, it’s a pretty darned big story, and The Times decision to ignore it completely (not even posting on its website wire service accounts of developments) is a flagrant mockery of its trademark slogan “All the News That’s Fit to Print” and clearcut example of media bias – especially since the paper showed no reluctance to report on his abortive presidential campaign this past year or his (always unfounded) attacks on Mr. Trump.

At the same time, if you don’t know about l’affaire Swalwell, you’ve got a pretty compelling excuse. Because The Times has by no means been alone in its lack of interest. Joining it in the zero Swalwell coverage category since the China spy story broke on December 8 have been (based on reviews of their own search engines):

>The Associated Press – possibly the world’s biggest news-gathering organization

>Reuters – another gigantic global news organization

>Bloomberg.com – whose founder and Chairman, Michael Bloomberg, is a leading fan of pre-Trump offshoring-friendly China trade policies

>USAToday

>NBC News

>CBS News

>MSNBC (The FoxNews.com report linked above says this network covered this news once briefly, but noting shows up on its search engine.) 

>National Public Radio (partly funded by the American taxpayer)

>McClatchy (another big news syndicate)

Performing slightly – but only slightly – better have been:

>PBS (one reference on its weekly McLaughlin Group talk show – nothing on its nightly NewsHour)

>ABC News (one news report)

>The Wall Street Journal (one news article, one opinion column)

The Swalwell story isn’t the world’s, or the nation’s, or even Washington’s biggest. But it’s unmistakably a story, and the apparent blackout policy of so many pillars of journalism today, coming on the heels of similar treatment of the various Hunter Biden scandal charges, further strengthens the case that a national institution that’s supposed to play the critical role of watchdog of democracy has gone into a partisan tank.

The only bright spots in this picture? Social media giants Twitter and Facebook haven’t been censoring or arrogantly and selectively fact-checking Swalwell-related material. Yet.