“The Dragon” and America’s Unholy Alliance
“Tariffs will make our Country MUCH STRONGER, not weaker. Just sit back and watch! In the meantime, China should not renegotiate deals with the U.S. at the last minute. This is not the Obama Administration, or the Administration of Sleepy Joe, who let China get away with “murder!” ~ President Trump, May 10th 2019
The first opening salvos in the most bitter trade war between the United States and China, unlike any witnessed since the 1930s, are simply part of a broader agenda, as both nations jockey for positions of dominance on the global stage. For those who are crying that tariffs are a tax on the consumer, they are much more than a simple tax, and they are a means to ensuring our economy leads on all fronts in the global markets and the U.S. dollar remains the global reserve currency. And as such, this isn’t so much a trade war as it is an effort by President Trump to ensure America’s global dominance and national security far into the future, by increasing and safeguarding our technical advantage and ability to win any war forced upon us, including the next world war.
The U.S. and China relations are testing a new low and the United States and China are on a collision course. Goodwill between the two that was purchased by U.S. dollars is rapidly breaking down.
As promised, President Trump raised raised duties on $200 billion of Chinese imports to twenty-five percent from ten percent on May 10th, and in response, China’s commerce Ministry has vowed “necessary countermeasures” are forthcoming. After eleven rounds of negotiations and no deal, President Trump is also now considering applying tariffs to the $300 billion in Chinese goods that are currently tariff free.
Even the Obama administration complained during Obama’s second term about China’s unfair trade practices, such as duties on U.S. chicken, Chinese protectionist acts in the aircraft industry, Chinese subsidy of its corn, rice and wheat production and export duties on various metal.
At the heart of the matter, China has stated its plan to be the world’s leading superpower, and they are positioning themselves to rocket past the U.S. in economic and military strength on the back of technology China steals from the United States and every other nation that does business with China. China’s President Xi Jinping believes he can turn China into a super competitive nation and a technical juggernaut and superpower by 2025, in the areas of information technology, aerospace, advanced robotics and artificial intelligence.
Although China is more than willing to increase its purchases of U.S. goods, especially soybean and natural gas purchases to offset last year’s record $419 billion trade deficit, China will not accept any limitation on its grander vision and its desire to control the technological mountain top. They may stop talking about it, but they’ll never end China’s Made In China 2025 program; they may become even more secretive, but they will never cease their industrial espionage, and they will continue to coerce technology transfers, if only in a less blatant manner.
Since 2010, China has promised eight times to stop forcing foreign companies to transfer technology to China, as a cost of doing business in China. And yet according to a 2018 Office of U.S. Trade report, the coercion has continued.
Noted by two retired senior Department of Defense officials in 2017, a problem that costs America $600 billion annually, technology and intellectual property theft must be America’s primary focus over the trade deficit. Although few companies publicly acknowledge the problem, forty-four percent of those aerospace companies and forty-one percent of the chemical concerns operating in China felt pressured to “share” technology with China, according to AmCham Shanghai Business (July 2018), and Rand Corp warns its employees against taking their personal electronics with them to China, since several U.S. businessmen have caught people (spies) searching their rooms. Chinese spies have already stolen documents concerning the U.S. F-35 fighter and the space shuttle, along with secrets on our most significant weapons systems.
All of this only confirms that the widening rift between D.C. and Beijing goes beyond trade, and it is further exhibited by China’s massive military buildup, which was only made possible through the near $500 billion trade deficit — or more once one includes intellectual property theft — and U.S. wealth. Among other problems, China is claiming ownership and control of international waterways in the South China Sea and disregarding other nation’s territorial claims, as well as the 2016 International Tribunal on the Law of the Sea ruling [although I’m not a big fan of sovereign nations bowing to international entities], it has significantly suppressed liberty in the ostensibly autonomous region of Hong Kong, and it is increasing pressure on Taiwan — a de facto independent and sovereign nation — to reunite with “the Motherland”.
“It was way past time to confront China on many of these problems“, Michael Wessel, a member of the congressionally chartered U.S-China Economic Security Review, recently stated. “They’ve been allowed to skate for too many years.”
In the meantime, complaints that the cost of these tariffs will be born by Americans is exaggerated, since it appears that China absorbed the last round of tariffs out of their profits rather than raising the cost of goods at Walmart. It also appears that China underestimated President Trump’s resolve on this issue and their own miscalculation is biting them in the rump right now. President Trump couldn’t have picked a better time for this confrontation, with the American economy riding high.
China also didn’t count on the rising antipathy of Americans towards it, as Americans see China unfairly undercut our economic prosperity, threaten our security and challenge our values. Republicans and Democrats alike are rallying around the flag on this issue, in a rare bipartisan consensus that America must stand up to China.
If nothing else, any shift away from China will only be a benefit to America, when U.S. businesses and manufacturers return to America out of cost concerns. Although tariffs do hit consumers, they don’t if one chooses not to buy those particular goods, opting instead to buy comparable goods made in other nations or America. So, President Trump should place tariffs on all Chinese goods and cripple China’s economy, however long or temporary.
Just as the Plaza Accord of 1985 forced Japan to act more fairly on trade, by devaluing the dollar against the yen, and eliminated trade barriers, it also demonstrates that White House initiated trade wars do not automatically end in disaster. Aggressive trade measures can and often do work and succeed in placing the global economic system on a more feasible trajectory of an open and rules based economic order.
Pat Buchanan recently noted: “Of the nations that have risen to economic preeminence in recent years — the British before 1850, the United States between 1789 and 1914, post-war Japan, China in recent decades — how many did so through free trade? None. All practiced economic nationalism.”
President Trump recognizes the party is coming to an end and that America must extricate Herself from the unholy alliance with “the Dragon” and enabling its path to global dominance. He understands that economics do not receive an exemption from the dynamics of geopolitical competition and growing national security concerns associated with China; and, by walking a fine line and between targeted measures and negotiations, President Trump should be able to hand China a face-saving defeat that protects and saves America’s own economic independence, sovereignty, greatness and national identity, without devolution into all out war.
Simply stated, this is one war America must win.
~ The Author ~
Justin O. Smith has lived in Tennessee off and on most of his adult life, and graduated from Middle Tennessee State University in 1980, with a B.S. and a double major in International Relations and Cultural Geography – minors in Military Science and English, for what its worth. His real education started from that point on. Smith is a frequent contributor to the family of Kettle Moraine Publications.