Bringing The House Down

Tony Burman writes that Donald Trump is putting China in the driver's seat. It wasn't supposed to be this way:

It began in 1972 when then-president Richard Nixon, an avowed anti-communist, joined his national security advisor, Henry Kissinger, in their historic journey to China ushering in a new relationship.

Triggered largely by the threat and ensuing collapse of the former Soviet Union, it led to some thinking that the 21stcentury might be shaped by a special U.S./China axis that would handle issues such as climate change, terrorism and the threat of nuclear weapons in a spirit of “engagement” and mutual respect.

Although this was probably always too idealistic a notion, it certainly came crashing to the ground once Trump’s “America First” ideology took hold in 2017 and relations with Beijing – particularly over trade — became raw and rancorous.

On the Beijing side, there was also a more assertive approach in its relationship with the United States. Its president, Xi Jinping, laid out a vision of a far more aggressive and influential government at home and abroad. And increasingly, Xi punished whistleblowers and arrested dissidents in an effort to consolidate his power.

When it came to pandemics, however, there was cooperation between the United States and China:

Dating back to 2002, when the SARS virus affected southern China, the administration of then-president George Bush worked closely with Beijing. This pattern of cooperation continued through the Bush administration and during the 2009 outbreak of a new virus, H1N1, when Barack Obama was president.

But that cooperation ended when Trump became president. And, if Joe Biden becomes president, his plate will be full:

He will inherit what seems certain to be the worst economy since the Great Depression and a country barely crawling out from the savage toll of the coronavirus pandemic. Millions of Americans will have lost their loved ones, their jobs and much of their income.

In addition, the next president will need to manage America’s most important foreign policy challenge — its relationship with China – at its most dangerous moment in modern history.

The most important goal of the next U.S. president may be to reassert enlightened and unselfish American leadership in a divided and demoralized world that has largely lost faith in it.

If he fails, will the most enduring legacy of this brutal pandemic be remembered as when the world seemed to change permanently?

One thing is certain: Donald Trump's singular talent is his ability to bring the house down around his ears.

Image: The Toronto Star

A Clear And Present Danger

Nouriel Roubini -- a man who has a pretty good record when it comes to predicting the future -- writes that Donald Trump is making China great again, even as he touts "phase one" of a trade agreement with China:

The good news for investors is that the deal averted a new round of tariffs that could have tipped the US and the global economy into recession and crashed global stock markets. The bad news is that it represents just another temporary truce amid a much larger strategic rivalry encompassing trade, technology, investment, currency and geopolitical issues. Large-scale tariffs will remain in place and escalation may well resume if either side shirks its commitments.

But rather than working as allies, the United States and China are decoupling:

The US regards China’s quest to achieve autonomy and then supremacy in cutting-edge technologies – including artificial intelligence, 5G, robotics, automation, biotech and autonomous vehicles – as a threat to its economic and national security. Following its blacklisting of Huawei (a 5G leader) and other Chinese tech firms, the US will continue to try to contain the growth of China’s tech 

Cross-border flows of data and information will also be restricted, raising concerns about a “splinternet” between the US and China. And owing to increased US scrutiny, Chinese foreign direct investment in America has already collapsed by 80% from its 2017 level. Now, new legislative proposals threaten to bar US public pension funds from investing in Chinese firms, restrict Chinese venture capital investments in the US, and force some Chinese firms to delist from US stock exchanges altogether.

The 2017 White House National Security Strategy and the 2018 US National Defense Strategy regard China as a “strategic competitor” that must be contained. Security tensions between the two are brewing all over Asia, from Hong Kong and Taiwan to the East and South China seas. The US fears that Chinese president Xi Jinping, having abandoned his predecessor Deng Xiaoping’s advice to “hide your strength and bide your time”, has embarked on a strategy of aggressive expansionism. China, meanwhile, fears that the US is trying to contain its rise and deny its legitimate security concerns in Asia.

It remains to be seen how the rivalry will evolve. Unfettered strategic competition would almost certainly lead eventually from an escalating cold war to a hot war, with disastrous implications for the world. What is clear is the hollowness of the old western consensus, according to which admitting China into the World Trade Organization and accommodating its rise would compel it to become a more open society with a freer and fairer economy. But, under Xi, China has created an Orwellian surveillance state and doubled down on a form of state capitalism that is inconsistent with the principles of free and fair trade. And it is now using its growing wealth to flex its military muscles and exercise influence across Asia and around the world.

The way to deal with China's rise is to form strategic alliances. But Trump trashes alliances. He's a lone wolf who trusts no one:

The problem, of course, is US president Donald Trump, who does not seem to understand that “managed strategic competition” with China requires good-faith engagement and cooperation with other countries. To succeed, the US needs to work closely with its allies and partners to bring its open-society, open-economy model into the 21st century. The west may not like China’s authoritarian state capitalism, but it must get its own house in order. Western countries need to enact economic reforms to reduce inequality and prevent damaging financial crises, as well as political reforms to contain the populist backlash against globalisation, while still upholding the rule of law.

Unfortunately, the current US administration lacks any such strategic vision. The protectionist, unilateralist, illiberal Trump apparently prefers to antagonise US friends and allies, leaving the west divided and ill-equipped to defend and reform the liberal world order that it created. The Chinese probably prefer that Trump be re-elected in 2020. He may be a nuisance in the short run, but, given enough time in office, he will destroy the strategic alliances that form the foundation of American soft and hard power. Like a real-life “Manchurian Candidate,” Trump will “make China great again.”

As the House of Representatives warned last week, Trump is a clear and present danger -- not just to his own country, but to the world.

Image: Bloomsbury Publishing

Big Time

Everywhere you look, Donald Trump is looking for a showdown. California has hired former Attorney General Eric Holder to take him on in his battle over sanctuary cities. New York mayor Bill DeBlazio vows that the city's police will not cooperate with Trump's program to round up  illegal immigrants. And then there's Trump's battle with the three million facts who didn't vote for him.

But, Michael Den Tandt writes, the big showdown -- the one with China -- is just around the corner:

The U.S. Navy is the guarantor of last resort for international law and international shipping through the South China Sea, worth an estimated US$5-trillion annually. China is attempting to assert a claim over much of that open ocean, contained by its so-called nine-dash line, as well as a group of small islets in the East China Sea in Japan’s Okinawa Prefecture.

Chinese incursions into territory long claimed by its neighbours have become commonplace in recent years, causing Japan to re-garrison its farthest-flung islands. Regional nerves have been further frayed by the People’s Liberation Army’s rapid building of various regional shoals and reefs into what appear to be air strips and fuel depots.

The administration’s self-stated sine qua non is the resurrection of American manufacturing, which it hopes to bring about by reversing a significant goods trade deficit with Mexico, nearly $60-billion in 2015, and a massive goods trade deficit with China, $366-billion in 2015.

China’s export-driven economy has long relied heavily on access to the U.S. market for steady, rapid growth. But that expansion, formerly in double digits, has slowed in recent years as the Chinese economy matures. This slowdown, which seems irreversible, has been posited by some analysts as the underlying reason for President Xi Jinping’s heavy-handed assertion of control over all aspects of the Chinese state — and Beijing’s new restlessness with regional limitations on its influence. Any dramatic curb in Chinese exports to the United States is likely to exacerbate such pressures.

Trump is spoiling for a fight with China. All indications are that he will get it. The problem is that those who spoil for a fight generally lose it -- to use a Trumpian phrase -- big time.

Image: USNI News