Administrative State • Center for American Greatness • China • Foreign Policy • Post • The ME Agenda

Retreat, Regroup, and Reinvest in a Realist Foreign Policy

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Donald Trump’s administration has allowed the United States to renegotiate its orientation to the rest of the world. Partisans have sniped in contradictory ways, criticizing him both as a warmonger and a naïve peacenik, but they rarely offer thoughtful alternatives to the course Trump has taken.

Trump’s foreign policy has two sides, both of which are radical departures from the recent past. He has embraced foreign policy minimalism, whether in the Middle East or with regard to long term commitments like NATO. At the same time, Trump has undone inertia and pursued confrontation, whether in the war of words with North Korea’s leader in 2017 or in the application of tariffs against China, long the fair-haired child of the foreign policy establishment.

President Trump rightly pointed out during the 2016 campaign what a disaster the Iraq War had been and explicitly rejected the regime-change policies of his predecessors. He also signaled a willingness to have warmer relations with Russia, which the foreign policy leaders of both parties oppose out of habit and opposition to that country’s cultural conservatism.

Trump, however, sometimes disappoints the peace camp. He bombed the Syrian regime in 2017 for its alleged use of chemical weapons and now backtracking on his earlier withdrawal declaration, even though ISIS is all but destroyed there. One gets the sense that these twists and turns are a product of internal friction within the White House, as well as friction between the White House and the foreign policy establishment more generally. The status quo, even when it is demonstrably wrong, has a great number of stakeholders, including career bureaucrats, defense contractors, and domestic constituencies.

Retreat From a Dangerous World or Prepare for Great Power Confrontation?
Columbia University historian Stephen Wertheim predicts in the New York Times, “A clash is coming over America’s place in the world.” Noting that the unipolar consensus is starting to break down, “One camp holds that the United States erred by coddling China and Russia, and urges a new competition against these great power rivals. The other camp, which says the United States has been too belligerent and ambitious around the world, counsels restraint, not another crusade against grand enemies.”

This strikes me as a false dilemma. One of the problems of the maximalist, unipolarity camp—the stuff of Madeleine Albright’s “indispensable nation” mantra or the late John McCain’s maniacal desire to have a war with Russia—is that it accomplishes nothing by prioritizing everything. NATO, Latin America, Niger, Yemen, Israel, South Korea, Afghanistan, and everywhere else are all accorded value. They all get American troops, money, and commitments. Problems are not ranked, so limited resources are deployed haphazardly and at great expense.

Even if one wanted to prepare for a potential great power conflict—and there is indeed such a burgeoning conflict with China—how easily can forces be sent to the area of need when they are tied down in Syria, Afghanistan, Iraq, Germany, Yemen, Niger, Columbia, and everywhere else?

Only a more restrained foreign policy would permit the United States to hazard a conflict with another great power. The enemy gets a vote, as the saying goes. Two decades ago, America was focused on dubious idealist wars like Kosovo, and George W. Bush himself signaled a desire to retreat from “nation building” in his 2000 campaign, but then the 9/11 attacks happened. His response to that attack defined his presidency. The limited numbers of troops and the ambitious designs of the war planners led to chaos, insurgencies, and mediocre results. Barack Obama also promised a change and repeatedly tried to engage in a “pivot to Asia,” but then chose to engage in Middle Eastern regime change wars following the Arab Spring, culminating in his commitment of troops to Iraq, as it faced a de facto invasion from Syria-based ISIS.

Whether employing the critical lens of preparing for great power conflicts or that of minimalism, the United States has accomplished little good in the Middle East, either for ourselves or its inhabitants. Moreover, these resource-heavy commitments resemble a perpetual motion machine, creating a unifying symbol for aroused Muslims to “throw out the crusaders.” Most of these costs, as well as these threats, could be avoided if we let the place stew in its own juices and adopted more sensible immigration laws. Everything is related.

The foreign policy establishment, however, lacks both unity and focus. The minute anything upsets the status quo, alarmism—some serious, some merely knee-jerk partisanship—rears its head. Thus, when Trump proposed to leave Syria and Afghanistan, the establishment and the lying media cried out in horror, even as they applauded Obama when he did something similar in Iraq.

To Conserve and Invest Anew
To prepare for any conflict with China and, more important, to deter such a conflict, our country needs to husband its resources, including diplomatic, economic, and military power. This prudent measure would be necessary to confront even unknown terror threats or medium-sized opponents. Extensive global deployments, the never-ending war in Afghanistan, and the outsized role America plays in NATO are an obstacle to any such capability. They consume resources and reduce the availability of equipment, ammunition, and reserve forces for contingencies. As in other areas of life, by trying to do too much, we end up accomplishing less.

Even if we were to conserve resources, we must invest in weapons, force structures, training, and technology. Should we prepare for a full spectrum of conflict, including the higher frequency but lower stakes “low intensity conflicts” that have been dominant since the First Gulf War? Or do we prepare for conflict with China, a conflict fraught with risk due to its large nuclear arsenal? The answer may be both, but no such investments are realistic so long as our forces are tied down in commitments like those imposed by NATO or the 18 year old war in Afghanistan. Our military has 35-year-old tanks and 50-year-old airplanes, all of which could be replaced, but for the daunting expense of existing foreign policy commitments.

More generally, a nation must ask when conflict is truly necessary. Could the United States survive a China that acquired more power over its neighbors, the South China Sea, and even on the Korean peninsula? If so, at what point would its power present a threat that required resistance? Would the return of the Taliban to power in Afghanistan be preferable to the simmering war over a land al-Qaeda discontinued using as a base over a decade ago?

In other words, the question is not just whether any of these are problems, but where they rank relative to one another, and whether some may be given lesser priority and best addressed through watchfulness and preparation.

An Unserious Leadership Class
The unseriousness of our leadership class could not be more apparent than in relation to the current troubles in South Asia. Pakistan and India, each armed with nuclear weapons, are on the brink of full-scale war. Instead of paying attention to that, the American press is obsessed with the testimony of admitted liar, Michael Cohen, when it is not losing its mind over one of Trump’s tweets. There has been barely any coverage of this confrontation, and a conflict in South Asia has the potential to kill millions.

The reasons for the conflict are perennial. There is a border dispute, and Pakistan has continued its support of Islamic terrorists who aim to weaken India’s control of the region. Last month, these militants killed 40 Indian security forces. Each nation is highly nationalistic, so much so that #sayyestowar has been trending on Indian Twitter. While I sympathize with India’s anger in the face of Pakistani-sponsored terrorism, the course most in the interest of America, and likely in the interest of both the participants, is to climb down from the edge and to restore the status quo ante, a tense “line of control” functioning as the de facto border between these states. Long term, Pakistan should be isolated, so long as it sponsors terrorists.

There are secondary issues too; China, a U.S. rival, is allied with Pakistan, which also sponsors various terrorists that have made life miserable for American forces in Afghanistan. But instead of hearing about this and the ways America may broker some kind of de-escalation, we hear about Cohen and reparations and other issues that will prove to be mere distractions in the event of a nuclear exchange on the subcontinent. The relative indifference of the political establishment to this conflict is another sign of its immaturity and overall uselessness.

Foreign policy is a bit like homeowner’s insurance. No one thinks about it much until there is a massive disaster, something like Pearl Harbor or the 9/11 attacks. A sound foreign policy is prepared for a range of contingencies and, most important, preserves resources for actual needs, including remote and long-term risks.

The choice between a retreat or engaging in great power conflicts is fundamentally a false one. In order to deal with China, terrorism, as well as remote threats, it is essential to retreat from the various obligations, deployments, and expenses that have gathered by accretion under the leadership of yesterday’s foreign policy elite. In this sense, both sides of the debate should come to terms with the fact that Donald Trump is our elected president, that his America First policy resonated with the American people, and that he is open to persuasion by both sides, each of which rejects the unrealistic legacy policies that got us here.

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo Credit: Tasos Katopodis/Getty Images

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Center for American Greatness • China • Donald Trump • Foreign Policy • North Korea • Post

Making Korean Lemonade

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Donald Trump bought a Korean lemon in 2018. Last week, he made some lemonade.

By walking out on his second summit with North Korean dictator Kim Jong-un, Trump stepped out of the policy trap that he had entered the previous year. By showing seriousness in a negotiation that seemed likely to continue along the previous three U.S. administrations’ fanciful pattern, Trump lent force to America’s dealings with China as well as others.

Ending the North Korean “denuclearization” charade is honest and sobering. But it does nothing to meet our dire need for protection against ballistic missiles, including from Korea.

Making nice with Kim at the 2018 Winter Olympics was among the foolish legacies of Trump’s original foreign policy team. With regard to Korea, as with China, Afghanistan, Europe, and everything else, the intellectual horizon of Secretary of State Rex Tillerson and National Security Advisor H.R. McMaster was bounded by George W. Bush’s Condoleezza Rice and Barack Obama’s Ben Rhodes. Like their predecessors, Tillerson and McMaster followed “the allies,” and believed in “progress.” Hence, they lent themselves to South Korean President Moon Jae-in’s campaign to use the Seoul Olympics to advance his leftist party’s attempt to legitimize the North Korean regime.

Moon knew that America’s buy-in to that campaign was essential to legitimizing it with South Korean public opinion. Kim, for his part, put on his lugubrious charm. And, for the umpteenth time since his father started building nukes and missiles three decades ago, Kim offered to give them all up. This time, for sure!

And, on cue, the Americans took the bait. Again.

Ever since 1994, the U.S government had been “negotiating” with North Korea to stop, to slow, or somehow to limit its drive to build nuclear-tipped ballistic missiles capable of reaching U.S. soil as well as of sowing panic in Japan. Americans had delivered thousands of tons of food and fuel oil. Americans also had helped in building a light-water nuclear reactor. Economic resources being fungible, all this had only helped the North Koreans build those nukes and missiles.

One administration after the other had bet their reputations for judgment on the view that doing such things would produce greater safety for the United States. As they produced the opposite, the American participants were loath to acknowledge their own errors, lest they impeach their own judgment. Having stepped into a trap, they preferred to stay in it while pretending to have laid their own. In fact, all that had happened was more delay and deferral on the part of the United States and continued building on the part of the North Koreans .

By the time Trump took office, Kim Jong-un had a growing stock of modern, mobile, and invulnerable nuclear-tipped ICBMs. We can only guess how many he’s got now, or how fast he is building them. Alas, we know that our so-called national missile defense, carefully designed as it is to handle only a token number of missiles, already may be numerically overwhelmed by North Korea’s missiles. If it isn’t, Kim can overwhelm the system merely by speeding up his production line.

By the time Trump met Kim in Singapore in May 2018, the stage had been set for more U.S. pretense. But just before then, John Bolton had replaced McMaster, and Mike Pompeo had replaced Tillerson. They had no illusions about North Korea. The country is as much a vassal of China today as it was in 1950. North Korea’s nukes exist because they are useful to China’s drive to expel America from the Western Pacific.

As for Kim, who holds power by China’s leave, the nukes are the only reason why he is treated as something other than the obscene tyrant he is. And he knows it. There was never any chance that Kim would become homo economicus, and join the boys on the ski slopes at Davos. That is why, before the meeting, Trump had placed some heavy duty sanctions on Pyongyang. And it was already clear that China was negating them.

Remember Trump’s watchword, at the Singapore summit and afterward, was “we’ll see.” Kim had promised to denuclearize. Trump would hold him to it. Yes, he canceled some military exercises. But he kept the sanctions, which Kim and China were urging he drop. In the meantime, as the claque at Fox News painted him the magical peacemaker, author of  history’s turning point, Trump enjoyed a respite from one kind of criticism, and gave Kim and the Chinese some rope.

At last week’s summit, Trump jerked the rope.

Kim (and China, tacitly) proposed, yet again, accounting and perhaps disabling some nuclear stuff at Yongbyon—they had sold that pooch many times before—in exchange for the lifting of all U.S. sanctions. Trump walked, speaking softly. That is the least he could have done. He did it. No one else has risen to that. Trump also knows, with regard to the Korean nukes and missiles, he is really dealing with China, with which he is engaged in a high-stakes confrontation over trade.

Trade is America’s immediate leverage over China. Modern-day, super-mercantilism is one of China’s main strategic weapons. The present confrontation’s results will be pregnant with events of historic significance.

But Trump’s walkout on Kim is already having a major effect in Japan, by blowing away the fog of illusion that momentarily had slowed public opinion’s steady slide to consensus that, since the nuclear missile threat is not going to diminish, much less disappear, and since nobody is stepping up to protect Japan against it, the Japanese people must to take full, final responsibility for their own defense at the highest levels of warfare.

For better and for worse, that also happens to be Donald Trump’s view.

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America • Center for American Greatness • China • Donald Trump • Infrastructure • military • Post

The Space Force Is No Laughing Matter

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Steve Carrell is set to star in a new comedy for Netflix called “Space Force.” Dubbed by the show’s creators (Carrell and British comedy writer-producer Greg Daniels) as “‘The Office’ in space,” the buzz surrounding the show has been electric. As a diehard fan of “The Office” (particularly during the Steve Carrell years), I am sure that the show will be entertaining. Yet as a space policy analyst, I cannot help but be worried about the implications of this series.

Let’s face it: most people don’t care about space. Many Americans understandably are more concerned about issues they think have more to do with life on this planet, like putting food on the table. To them, space is just a distant and desolate place whence colorful pictures originate but not much else.

When I worked on Capitol Hill, several members of Congress routinely would respond to my pleas for a greater focus on space issues with classic American ambivalence: “Who’s going to spend money on that?”

It was only a matter of time before space moved from its revered place in the American imagination, to the transitory position of an “out-of-sight and out-of-mind,” “been there, done that” irrelevance. Foolishly, but understandably, Americans now feel comfortable laughing  at what we once called the “Space Age.” Unfortunately—to paraphrase what Trotsky once said of war—you might not be interested in space, but space is interested in you.

More accurately, the Chinese (along with the Russians and several other malign actors) increasingly are interested in space at a moment we are not.

So, what’s the big deal? Why can’t we just take the comedic route and laugh at the cosmos while we wallow in the mud down here?

Put simply, much of what we do “down here” depends very much upon what we can do “up there.”

Today, the United States relies disproportionately on space-based systems—satellite constellations—more than any other country. Nearly every electronic signal that keeps our advanced society functioning passes through space. This has advanced our society, to be sure, but it has also made us vulnerable. America’s enemies, while they too are becoming reliant on satellites, are still nowhere near as dependent on them as we are. This provides a key strategic opportunity to any adversary willing to exploit it.

And, the Chinese are planning to do just that.

Should a conflict erupt between the two sides, the Chinese have plans to disrupt and destroy American satellite constellations critical to our defense. By rendering American forces (and, potentially, the civilian sector as well) deaf, dumb, and blind, the Chinese hope to make the United States nothing more than a hapless giant on Earth, allowing them to achieve a surprise victory over our armed forces.

Further, the Chinese recognize the potential limitless value that space offers their economy. To maintain the “Chinese economic miracle,” their economy requires resources. China has spent decades gaining access (and, in some cases, monopolies) over crucial albeit limited natural resources and rare minerals. Wherever there are natural resources on Earth—even in Antarctica—the Chinese are making bold moves to capture them. They are taking the same logic to space.

Right now, China has deployed the Chang’e-4 lunar rover on the dark side of the moon. They’ve made history for having placed the first manmade object on that previously unexplored part of the moon. The goal is to collect samples of the lunar soil and to run a suite of experiments, such as growing cotton seeds on the moon.

While the Chinese are engaged in a scientific endeavor, they have ulterior motives with their lunar exploration program: Beijing wants to figure out if a manned lunar mining colony would be viable. If such an undertaking is deemed feasible by Beijing, Chinese personnel, mining equipment, and weapons inevitably will land on the lunar surface with as much dedication as Chinese forces have expanded illegally into the South China Sea, in some cases creating whole new islands.

It’s believed that the world’s first trillionaire will come from the nascent space mining sector. Not only would dominating space provide China key economic advantages over its rivals on Earth, it would also provide Beijing with critical strategic dominance over the United States. China could threaten American satellites; it would benefit disproportionately from the technology boom that would follow its massive investment in space development; and Beijing could also place strategic weapons in orbit, blockading access to nations China dislikes.

China’s investment in their robust space program has been smaller than the American investment into space. Although, the Chinese investment is better focused on projects that would yield tangible, military, economic, and scientific advantages. At a time when an integrated, strategic approach to space policy is needed in the United States, the American people are given anything but.

The Trump Administration (like many of its predecessors) talks big about space. But in terms of action, it has little to show. Meanwhile, in Beijing, the Chinese effort continues apace with their advanced plans for dominating space—and us.

The president’s space force idea is not new—and it should be taken seriously. But because everyone hates Trump in the media, in academia, and in the government, the concept will be marginalized and ultimately abandoned. While the “creatives” in Hollywood give Americans a comedic view of space and of those who would take it seriously, the Chinese people are reinforced in the belief that it is their rightful place to take space and hold it.

As time goes on, America’s dithering over a meaningful space policy will leave this strategic domain—the ultimate high ground—open to whichever country has the gumption to take it.

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo Credit: Netflix

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Center for American Greatness • China • Defense of the West • Donald Trump • Foreign Policy • Greatness Agenda • military • Post • Russia

Trump Notwithstanding, U.S. Deploys Only Words Against Missiles

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Official Washington has refused to defend America against ballistic missiles, especially from Russia and China, while spending some $300 billion pretending to be trying. For a half century, it has dissembled its intention with techno-speak. On January 17, however, President Trump released the Pentagon’s long internally disputed Missile Defense Review (MDR) with words that might be summed up as, “This time, for sure!”

Said Trump: “First, we will prioritize the defense of the American people above all else.” Wow. Goodbye Robert McNamara and Henry Kissinger. Strike one.

And then: “The United States cannot simply build more of the same, or make only incremental improvements.” Strike two.

Finally: “My upcoming budget will invest in a space-based missile defense layer . . . Regardless of the missile type or the geographic origins of the attack, we will ensure that enemy missiles find no sanctuary on Earth or in the skies above.” Home run!

Most media accounts, and Democrats, took Trump at his word. But whoever fights his way through the MDR’s 8,000 words of bureaucratese, written by people who failed freshman composition, will find no fundamental changes in current policy. It’s a fair bet Trump did not read it.

Tinkering With a Horse-and-Buggy System
The most fundamental of questions—the one that McNamara and Kissinger “settled” with the 1972 Anti-Ballistic Missile treaty before most people reading this were born—is that the U.S government should not even try to defend America against Russian and Chinese missiles, but it may try defending against “theater” threats. The Trump MDR reaffirms their settlement: “While the United States relies on deterrence to protect against large and technically sophisticated Russian and Chinese intercontinental ballistic missile threats to the U.S. homeland, U.S. active missile defense can and must outpace existing and potential rogue state offensive missile capabilities.” Color that no change.

In practice, this long-standing posture has meant the U.S government has not built anything that, even in the pursuit of safety against such regimes as North Korea, would stop significant numbers of missiles from Russia and China. Trump said we would not “build more of the same or make only incremental improvements.” But the MDR mentions only one actual homeland defense measure: an additional 20 ground-based interceptors located exclusively next to the other 40 at Fort Greely in Alaska. They would be improved, and have access to improved warning sensors.

But the basic approach is unchanged from the 1950s. Trump’s words notwithstanding, the only real novelty is that this horse-and-buggy system will be given a genetically modified horse on steroids and carbon-fiber buggy wheels.

It’s not as if those in charge of U.S missile defense don’t know what makes the biggest difference between horse-and-buggy interceptors and effective ones. All of them know that it’s whether you can launch the interceptor before the target comes into view of surface-based radars. The MDR mentions in passing that “Russia maintains and modernizes its longstanding strategic missile defense system deployed around Moscow, including 68 nuclear-armed interceptors [meaning launchers that are loaded and reloaded from underground], and has fielded multiple types of shorter-range, mobile missile defense systems throughout Russia.”

Distant Early Warnings
Why ever do the Russians—whose students outrank ours in math and science—think that these masses of interceptors, which are not nearly as sophisticated and expensive as ours in Alaska, can protect against intercontinental missiles? Because their less-than-ideal interceptors are targeted by the faraway radar systems that also provide early warning. And the interceptors are located close to the places to be defended.

Unifying warning and targeting is the key. Putting nukes on the interceptors also helps, because it relieves the exquisite, failure prone, and prohibitively expensive hit-to-kill technical requirements that we have imposed on ourselves.

Since America is mostly surrounded by oceans, and the missiles coming at us would be coming from places inland in Eurasia, the only way for us to unify early warning and targeting in a forward location is to do so in orbit. And it isn’t as if we don’t know how to do it. A program to do just that (SBIRS-low) was canceled in the 1980s when arms controllers pointed out that it contradicts the 1972 ABM Treaty’s provision against “substituting” for surface-based radars. But oh, look! The 2019 MDR states that research is ongoing into systems that, someday, might let us do that. Don’t hold your breath. The deep state does not want that, including the defense contractors who, naturally, don’t want to jeopardize current programs.

Vulnerability Remains Policy
Because the deep state rules, all proposals for novelty get translated into putting fancier lipstick on the same pigs. Missile defense advocates have ever touted “boost-phase defense”—shooting down missiles just after they are launched, and “space-based missile defense,” by which they usually mean the same thing. The MDR embraces boost phase, even saying some of it will be done by lasers! And Trump trumpeted the latter—almost certainly sincerely. But read the fine print.

The MDR wants to do research into lasers small and light enough to be carried on stealth drones and, with a power supply sufficient to ensure missile kills at a distance greater than 100 miles thanks also to sophisticated systems for countering atmospheric distortion.

Leave aside the absurdity of permanently stationing drones over the territory of a non-idiot enemy. Fact is, this is the third time (first was the Edward Teller’s Free Electron Laser, second was the Air Force’s Airborne Laser lab) that the taxpayer’s pocket has been picked to the tune of some $3 billion for countering high-power lasers’ atmospheric distortion by ex post facto mirror adjustments. No technology can make that possible.

Even crazier, the MDR proposes hovering F-35 fighters near enemy launch sites to shoot down the missiles. Even if they could survive in areas defended by Russian S-400 anti-aircraft missiles, how many planes and what infrastructure would be required to keep one plane in the air 24/7 for more than a couple of days?

As for the MDR’s promise of research into space-based interceptors, note first that this is research rather than building anything. Second, one may ask what the research is meant to uncover, since space-based interceptors have been feasible in one form or another since the late 1960s. Third and most revealing, the MDR specifies that, were space-based interceptors deployed, they would be used strictly to counter threats from such as North Korea and Iran.

Vulnerability to Russia and China remains U.S. policy, notwithstanding the words of Presidents Lyndon Johnson, Richard Nixon, Ronald Reagan, George W. Bush, and Donald Trump. Someday, some president will take his own words seriously. Meanwhile, don’t attempt to kick that football!

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo credit: iStock/Getty Images

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America • China • Economy • Libertarians • Post • Trade

Dear Libertarians: Trade Deficits Matter

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Steve Hanke recently set out to prove “why President Trump’s trade message and protectionist policies are rubbish” in a Forbes article. Instead, the Johns Hopkins University economist exposed himself as a word-mincing, logic-twisting sophist—just like every other intellectual mercenary associated with the faux-libertarian propaganda mill that is the Cato Institute.

Hanke’s argument: trade deficits don’t exist, China is not screwing America, and President Trump (the village idiot) is jousting windmills. The real problem is lazy Americans who shop-til-they-drop and demand welfare “gimmies” from Uncle Sam.

Faust’s Bargain
Hanke begins his argument by explaining that trade deficits don’t really exist. Instead, the goods trade deficit is simply one half of the equation:

In economics, identities play an important role. These identities are obtained by equating two different breakdowns of a single aggregate. Identities are interesting, and usually important, by definition. In national income accounting, the following identity can be derived. It is the key to understanding the trade deficit.

(Imports – Exports ) ≡ (Investment – Savings) + (Government Spending – Taxes)

Given this identity, which must hold, the trade deficit is equal to the excess of private sector investment over savings, plus the excess of government spending over tax revenue. So, the counterpart of the trade deficit is the sum of the private sector deficit and the government deficit (federal + state and local). The U.S. trade deficit, therefore, is just the mirror image of what is happening in the U.S. domestic economy. If expenditures in the U.S. exceed the incomes produced in the U.S., which they do, the excess expenditures will be met by an excess of imports over exports (read: a trade deficit).

This is true. In his esoteric discussion of “identities,” however, Hanke neglects to mention the practical consequences of running a goods trade deficit. Although the books are balanced, reality shows us that it matters how they are balanced—there are two sides to every coin, but heads is not the same as tails.

I’ve explained previously how America sold its soul for Chinese trinkets. You should read the full article—it is my personal favorite. If you don’t have time, here’s a quick summary:

When a nation imports (buys) more than it exports (sells) it runs a trade deficit. America’s goods trade deficit was $796 billion in 2017. Sadly, there are no free lunches. To pay for these goods America sells more services than it buys (think banking and tourism). This helps, but still leaves us $566 billion in the red. To balance the books, America also sells assets and debt.

Assets include real estate, artifacts, shares in corporations—anything of value that was produced in the past. Selling assets is not always bad. For example, selling your mothballed Harley to buy a home gym might be wise. However, pawning your great-grandma’s wedding ring to buy groceries is not. Context matters.

On the whole, America’s asset sales resemble pawning great-grandma’s wedding ring. Consider that foreigners bought $153 billion worth of American real estate in the 2016-2017 fiscal year—everything from New York penthouses to Nebraskan ranches. This has the negative downstream effect of increasing housing prices and rents, in addition to the social problems associated with absentee landlords.

The United States also sells billions in equities (ownership of U.S. corporations and the associated profits). As of 2017, foreigners owned roughly 38 percent of American equities, when including foreign direct investments and foreign portfolio investments. This is up from just 12 percent in 2007, and the number is growing fast.

America pays for the rest of the deficit by selling debt. This is reflected in the endless growth of U.S. public and private debt levels. For example, foreign investors own over 44 percent of America’s national public debt, valued at more than $6.3 trillion. Hanke is good enough to mention this figure in his article, but erroneously reverses the causal sequence. Further, foreign investors own nearly 30 percent of all U.S. corporate bonds and a large percentage of America’s (monstrous) private debt.

America pays for foreign goods by selling our inheritance and mortgaging our future. In turn, we surrender control of our nation to foreign masters. Conversely, if America ran a trade surplus we would be purchasing foreign assets and debts—we’d be buying-up the world like Great Britain during the 19th century.

Who cares if the books are balanced? What matters is how they’re balanced.

Skyfall
Hanke’s second line of argumentation is that trade deficits—assuming they exist—aren’t a problem. After all, “the U.S. has run a trade deficit every year since 1976, and the U.S. has done relatively well since then.” Hanke needs to get out more. The sky isn’t just falling. It fell.

Not only is the trade deficit largely to blame for America’s ballooning debt and skyrocketing housing costs, it also costs Americans jobs and increases inequality.

Trade deficits destroy jobs. Consider that the North American Free Trade Agreement displaces a net 840,000 American manufacturing jobs. How? Offshoring led to trade deficits with Mexico. Before NAFTA, tariffs protected American industries from asymmetrical Mexican competition by normalizing price externalities. In other words, tariffs raised the cost of Mexican goods to account for the fact that American businesses were subject to higher labor, environmental, and quality standards. Essentially, tariffs penalized companies that moved abroad to avoid American laws. This resulted in balanced bilateral trade.

NAFTA eliminated many market barriers and forced American workers to compete directly with cheap Mexican labor. This created a powerful incentive to move American factories to Mexico—and move they did. Lori Wallach, director of Public Citizen’s Global Trade Watch, estimates that NAFTA redistributed a net 840,000 American manufacturing jobs to Mexico. Meanwhile, the Economic Policy Institute estimated in 2013 that NAFTA displaced a net 700,000 American workers. Finally, U.S. Trade Representative Robert Lighthizer also noted in a press release that NAFTA cost the United States 700,000 jobs. Remember, these are net figures: they include the jobs NAFTA created by boosting American exports.

NAFTA also displaces a large number of service jobs. This is because manufacturing is an anchor industry upon which predicate industries depend. For example, hairdressers and accountants move to towns with mines or factories—not vice versa. The Bureau of Economic Analysis estimates that each manufacturing job supports roughly 1.5 service jobs because of the multiplier effect. In short, NAFTA costs America a net 1.7 million jobs.

This problem is not to specific to NAFTA—the logic of market asymmetries means that whenever America (freely) trades with a poorer country, the inevitable trade deficit will destroy more (American) jobs than it creates because labor-intensive industries are the most-likely to offshore. After all, they have the most to gain from lower wages.

The trade deficit also hurts America by increasing economic—and therefore political and social—inequality. The driving force behind inequality is, once again, offshoring. Moving millions of manufacturing jobs abroad creates unemployment. It also results in more competition for the remaining blue collar jobs—therefore decreasing wages for everyone else. This is basic supply-and-demand in action. It is not a coincidence that wages have stagnated for the vast majority of Americans since our nation began running chronic trade deficits in the 1970s.

Inequality is not merely an economic problem—it’s a political and social problem. Why? Too much inequality destabilizes society. Aristotle recognized this in his Politics, and recommended that the state should be governed by a large, robust middle class. Likewise, the godfather of modern conservatism, Edmund Burke, noted that inequality was one of the primary reasons France succumbed to its bloody revolution. The main point here is that societies function best when everyone has something to lose should they collapse. Ipso facto, inequality matters.

A Dragon Fed
Hanke’s final point is “the trade deficit is not made by foreigners who engage in unfair trade practices.” Instead, it is a home-grown problem.

I suppose Professor Hanke has never heard of China before. China’s entire trade regime was designed to fleece American consumers. For example, when China opened its doors to American investment in 1985, it specifically focused on export-oriented industries. Companies that built factories in China with the express purpose of exporting the production were given generous subsidies and access to artificially cheap labor. From the beginning of its resurgence, China’s goal was to be the seller, not the buyer.

A BBC Radio program on which I was featured noted that China meticulously follows the dictates of the World Trade Organization (WTO) today. Although this point is often made by academics like Hanke, it’s not compelling. Who cares if China plays by the rules now? At this point they’ve already secured an insurmountable competitive advantage in manufacturing due to the law of increasing returns—the bigger the factory, the cheaper its production. The Chinese abused the rules when it was to their benefit, and now attempt to uphold them for their benefit. “International law” is meaningless to China. The Chinese only care about wealth.

One of the main reasons America runs a trade deficit with China is that China jealously guards its lucrative domestic market. By and large, Western companies cannot operate in China. Those granted the privilege are often forced into “partnerships” with Chinese companies, which siphon-off a portion of the profits and serve as important vectors for intellectual property theft—this costs America up to $600 billion annually. This practice allowed China to evolve an independent and hugely profitable economic ecosystem. Just look at China’s information technologies sector: by blocking Amazon, China preserved the market niche for a domestic competitor, Alibaba. Today, Alibaba is one of China’s most valuable companies, and is Amazon’s only viable global competitor.

Contrary to what Hanke claims, China is indeed ripping us off. That said, I am forced to agree with his conclusion: China isn’t causing the trade deficit. The shame rests solely with us. America is not a passive actor. We could rebuild our tariff walls to halt offshoring and eliminate the trade deficit. We simply choose not to.

Photo Credit: Mark Ralston/AFP/Getty Images

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Asia • China • Donald Trump • Economy • Post

Trump Deserves Credit for China’s Changing Stance on Trade

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President Trump is gaining the advantage over China in his long-term trade strategy, proving the naysayers wrong with his decision to use tariffs as leverage.

When Donald Trump first introduced his aggressive trade policy and imposed targeted counter-tariffs to push back against China’s rampant trade manipulation, most of the so-called experts remained skeptical.

President Trump’s strategy was deemed too dangerous by commentators, who also predicted that it would be powerless to contain China’s economic aspirations. The president never wavered, though—and his commitment has paid off faster than anyone could have predicted.

Beijing last month announced it would cut tariffs on imported U.S. cars—a major concession in a trade war that increasingly is tipping in Washington’s favor. The decision to slash tariffs on American-made cars from 40 percent to 15 percent came the week after President Trump met face-to-face with President Xi Jinping in Argentina and announced that both countries are on the verge of a breakthrough on trade.

Of course, China’s sudden concession has a direct cause—President Trump repeatedly has pressured Beijing to adopt a fair trade policy toward the United States, knowing that China has a lot more to lose in a direct trade war than America does.

“We are either going to have a REAL DEAL with China, or no deal at all—at which point we will be charging major Tariffs against Chinese product being shipped into the United States,” the President tweeted recently. “Ultimately, I believe, we will be making a deal—either now or into the future. China does not want Tariffs!”

Trump was right: Beijing doesn’t have the fortitude or economic resilience to weather additional U.S. tariffs on its goods. After all, China’s economy relies heavily on exports, making it particularly vulnerable to policies that restrict its access to the world’s largest consumer market.

The president also understood that China’s economic might has rarely been tested, and accurately predicted that Beijing would be unwilling to risk its long-term growth prospects by engaging in a trade war against a far more stable market economy.

Despite hysterical warnings from Democrats, President Trump’s strategy began showing signs of success way back in early August, when China’s leaders reportedly became unsettled over U.S. tariffs—a clear sign that decision-makers in Beijing had no confidence in the resilience of their economy.

As it turns out, their concerns were well-founded.

According to a recent New York Times business report, China’s economy has experienced a major slowdown in both retail spending and industrial production in recent months, putting Xi Jinping and his party under significant political pressure.

China is suffering from declining business and consumer confidence, car sales have plunged, the housing market is stumbling, and some factories are reportedly letting workers off for the Lunar New Year holiday two months early.

As a result of those domestic economic pressures, the Times notes that Xi “has been forced to make concessions to the United States as President Trump’s trade war intensifies.”

Fact is, Trump is gaining on China—and a triumph on his trade strategy is approaching faster than anyone anticipated. While Beijing’s inability to go toe-to-toe with Washington on trade is partially a symptom of its own economic weakness, President Trump deserves the credit for identifying that weakness, pushing China to its limit, and calling the Communists’ bluff.

Photo Credit: STR/AFP/Getty Images

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Center for American Greatness • China • Defense of the West • Post • Technology

Chinese Biotech Threatens America

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Modern medical science is simply extraordinary. The advent of biotechnology has allowed for truly innovative research, discovering cures for some of the most complex and dangerous diseases known to humanity. Yet, for all the good biotechnology and advanced medical research can achieve, in the wrong hands, it can be abused and misused. Consider China.

First, a Chinese doctor reportedly birthed two gene-edited babies. Next, Sinogene, a major biotechnology company based in Beijing, is successfully cloning dogs for use in medical research.

These two stories appear to have been filed by most Western media as nothing more than weird human interest stories from abroad. Not so. Each has profound implications.

Obviously, as with many things that emanate from the totalitarian system in China, one can rarely be sure if news broadcast from there is, in fact, true. Even so, many Western medical professionals and researchers are troubled by these alleged developments in China.

And why shouldn’t they be?

In Biotech, Culture Matters
What you are witnessing in China is the convergence of advanced technology with cutting-edge bio-sciences, capable of fundamentally altering all life on this planet according to the capricious whims of a nominally Communist regime.

China routinely places its citizens in horrific slave-labor camps for “political crimes,” tortures and torments any of its people who dare to worship a religion other than the state-approved one of Marxist-Leninism, and has picked fights with its neighbors for decades. The wealthier and more powerful China has become, the more daring has been the totalitarianism of the regime. And, with its newfound wealth and capabilities, firms from all over the world increasingly are seeking to do business in China, thereby empowering the Chinese regime even more.

Advanced American tech companies, such as Google and Apple, have begun moving their artificial intelligence research facilities away from the United States and Europe and into China. Meanwhile, American companies with large defense contracts, like Boeing, have also set up shop in China. Part of doing business in China, though, is that Western firms essentially must give up their crown jewels to Chinese state-owned enterprises. It’s a terrible deal. But in the short-term, it allows those Western firms to gain access to a large, relatively untapped market, boosting their company profits significantly.

The same pattern is at play in biotech.

Western know-how has slowly trickled into China, where the laws and ethical standards are different for developing advanced projects and testing them. The Chinese government is only too happy to gain access to biotechnology that could, as they see it, increase the regime’s ability to enhance their citizenry and enlarge their state coffers.

China has already created a draconian social credit rating score for determining each individual citizen’s worth—with requisite punishments and awards doled out by the government. China has taken the eugenics ethos that once defined Nazi Germany and other totalitarian movements of the last century and refined it to staggeringly sophisticated levels.

Beginning in the late 1970s and until recently, Beijing restricted the number of children average Chinese citizens could have to just one, as they thought, to combat the fear of overpopulation. Given Chinese society’s preference for male offspring over female, the Chinese government allowed for the backdoor institutionalization of female infanticide, where Chinese parents who either wanted their one child to be a boy or who had already one child that was a boy, opted to abort their daughters en masse.

China is a rigid, hierarchical society with a vast surveillance state. Orwell himself could not have envisioned the potency of China’s state power. Giving such an ideological regime the tools of advanced society, like artificial intelligence or biotech, will have negative implications for everyone over the course of many decades.

National Security Implications for the United States
Sinogene, the Chinese company that developed the cloned dog, hopes the creation of clones will allow for cheaper biomedical research. The cloned dog was created with a heart defect meant to allow for medical experimentation. But given the nature of the regime in Beijing, Chinese researchers will be encouraged to perfect their cloning research to the point where human clones can be made for medical experimentation.

Just as with the Chinese doctor who helped to create genetically modified twins, Sinogene aspires to become the premiere organization in developing cost-effective, quick, cures to major diseases (and profiting from them before more judicious Western firms can)—consequences be damned.

These developments are not just about enforcing Chinese state control over its citizenry or creating the “perfect Communist.” They’re not only about beating Western biotech firms out on cutting-edge research. All of these moves have direct implications for American national security.

For example, in 2017, disparate reports began appearing that the Chinese military had been experimenting with what was known as “gene-doping” on their special forces soldiers. By using gene-editing software, like CRISP-R, to enhance select members of their military, the People’s Liberation Army was attempting to create super-soldiers that would be better able to compete against the superior-training of American forces.

Biotechnology development in China is heading in a truly macabre direction. Unsurprisingly, just as with American tech firms today, major U.S. biotech companies (and industry leaders) seem unfazed by the prospect that their know-how might be co-opted by Chinese military planners intent on creating the next great weapon used to kill Americans. They are equally unmoved by the prospect that Western biotechnology investment and knowledge can be harnessed by the Chinese government to be used for totalitarian state control.

Bio-hacking, gene-doping, and genetic manipulation are not only the next frontiers for bettering human life. They are, more troublingly, the battlefields of the future. The West is unprepared. What’s worse is that many Western firms are helping to empower America’s enemies in China.

Perhaps Lenin was right when he said that “the Capitalists will sell us the rope with which we hang them.” Instead of rope, though, perhaps the West is selling China the petri dishes and CRISP-R capabilities with which to kill us. Greater action in Washington must be taken to slow down China’s biotechnology bonanza before the United States finds itself outmatched in this vital area.

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo Credit: VCG/VCG via Getty Images

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America • Big Media • China • Congress • Democrats • Donald Trump • Economy • Energy • Environment • Post • The Culture • The Media • Trade

Actually, 2018 Was a Pretty Good Year

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The year 2018 will be deplored by pundits as a bad year of more unpredictable Donald Trump, headlined by wild stock market gyrations, the melodramas of the Robert Mueller investigation, and the musical-chair tenures of officials in the Trump Administration.

The government is still shut down. Talk of impeachment by the newly Democrat-controlled House of Representatives is in the air. Seemingly every day there are sensational breakthroughs, scandals, and bombshells that race through social media and the Internet—only to be forgotten by the next day.

In truth, aside from the Washington hysterias, 2018 was a most successful year for Americans.

In December, the United States reached a staggering level of oil production, pumping some 11.6 million barrels per day. For the first time since 1973, America is now the world’s largest oil producer

Since Trump took office, the United States has increased its oil production by nearly 3 million barrels per day, largely as the result of fewer regulations, more federal leasing, and the continuing brilliance of American frackers and horizontal drillers.

It appears that there is still far more oil beneath U.S. soil than has ever been taken out. American production could even soar higher in the months ahead.

In addition, the United States remains the largest producer of natural gas and the second-greatest producer of coal. The scary old energy-related phraseology of the last half-century—”energy crisis,” “peak oil,” “oil embargo”—no longer exists.

Near-total energy self-sufficiency means the United States is no longer strategically leveraged by the Middle East, forced to pay exorbitant political prices to guarantee access to imported oil, or threatened by gasoline prices of $4 to $5 a gallon.

The American economy grew by 4.2 percent in the second quarter of 2018, and by 3.4 percent in the third quarter. American GDP is nearly $1.7 trillion larger than in January 2017, and nearly $8 trillion larger than the GDP of China. For all the talk of the Chinese juggernaut, three Chinese workers produce about 60 percent of the goods and services produced by one American worker.

In 2018, unemployment fell to a near-record peacetime low of 3.7 percent. That’s the lowest U.S. unemployment rate since 1969. Black unemployment hit an all-time low in 2018. For the first time in memory, employers are seeking out entry-level workers rather than vice versa.

The poverty rate is also near a historic low, and household income increased. There are about 8 million fewer Americans living below the poverty line than there were eight years ago. Since January 2017, more than 3 million Americans have gone off so-called food stamps.

Abroad, lots of bad things that were supposed to happen simply did not.

After withdrawing from the Paris Climate Accord, the United States exceeded the annual percentage of carbon reductions of most countries that are part of the agreement.

North Korea and the United States did not go to war. Instead, North Korea has stopped its provocative nuclear testing and its launching of ballistic missiles over the territory of its neighbors.

Despite all the Trump bluster, NATO and NAFTA did not quite implode. Rather, allies and partners agreed to renegotiate past commitments and agreements on terms more favorable to the U.S.

The United States—and increasingly most of the world—is at last addressing the systematic commercial cheating, technological appropriation, overt espionage, intellectual-property theft, cyber intrusions, and mercantilism of the Chinese government.

The Middle East is still chaotic, but it is a mess that is now far less important to us for a variety of reasons. Energy-wise, America is not dependent on oil imports from corrupt Gulf monarchies or hostile Islamic states. Strategy-wise, the new fault lines are not Arab and Islamic cultures versus Israel or the United States. Instead, it is internecine strife within the Islamic world, mostly with Iran and its Shiite satellites opposing the Sunni Arab monarchies and more moderate Middle Eastern regimes.

For all the pro- and anti-Trump invective and media hysteria, the Brett Kavanaugh confirmation circus, and the bitter midterm elections, the United States was relatively calm in 2018 compared with the rest of the world. There was none of the mass rioting, demonstrations and street violence that occurred recently in France, and none of the existential and unsolvable divides over globalization and Brexit that we saw in Europe

Europe’s three most powerful leaders—Angela Merkel of Germany, Emmanuel Macron of France, and Theresa May of the United Kingdom—have worse approval ratings than the embattled Donald Trump.

In sum, the more media pundits claimed that America was on the brink of disaster in 2018, the more Americans became prosperous and secure.

(C) 2019 TRIBUNE CONTENT AGENCY, LLC.

Photo credit: Getty Images

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Center for American Greatness • China • Donald Trump • Post • The Left • The Media • The Resistance (Snicker)

Merry Christmas—We’re All Gonna Die (Again)!

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One of the less salubrious effects of the anti-social network is how everything and anything is deemed the end of the world and, logically, the end of humanity. True, to the Regressives, the end of humanity does not mean the end of the world but, rather, a reprieve from us for Goddess Gaia. But why quibble and ruin the spirit of the season?

Speaking of ruining the spirit of the season, to paraphrase President Ronald Reagan: “Well, here we are again.”

Here at home, the Dow is down and the Donald’s ire is up. The government is shut down over the issue of funding for the southern border wall. General Michael Flynn was in court for sentencing and is still not sentenced. Michael Cohen is going to jail and the president has discussed the case with his acting attorney general, causing within the political class an outpouring of narcissistic panic about the fate of our free republic not seen since lunch.

Naturally, the hashtag “#TrumpResign” is trending number one, because the onanistic resistance has mystically divined that this is the silver bullet that will make the bane of their existence pick up his money bags and high tail it back to Trump Tower before he dons a jumpsuit as orange as his skin and awaits trial for treason. (I think I’m capturing the gist of their tweets, sans their profanity, assassination fantasies, and grammatical errors.)

Oh, and I heard tell (an unconfirmed rumor from someone who never met the cat in question but—hey!—that’s all the rage in today’s journalism) that there is an untenured associate professor of hydrotherapy who is preparing a boycott against radio stations playing the offensive, patently racist carol, “White Christmas”.

Overseas, President Trump is withdrawing our troops from Syria, and may well do so in Afghanistan. Secretary of Defense James Mattis is resigning over the Syrian withdrawal and other issues where his views are not in alignment with his commander-in-chief. In what should be a rhetorical query, departing Ambassador Nikki Haley has cited the need of “the American people . . . to decide if it’s worth” staying in the United Nations—a global Tammany Hall that daily assails our ally Israel; refuses to name Hamas as a terrorist organization; and is more than happy to have American taxpayers foot the bill to get kicked in the teeth by them.

In Pyongyang, Rocket Man Kim is kicking up his high heels and once more threatening to go nuclear. His puppet masters in Beijing have likely taken another Canadian captive in retaliation of that nation’s lawful detention of Huawei’s Chief Financial Officer, Meng Wanzhou, for potential extradition to the United States to face charges related to the Iranian Sanctions Act. Meanwhile, Norwegian Maren Ueland, 28, and Danish student Louisa Vesterager Jespersen, 24, were kidnapped and beheaded by the Islamic State animals in Morocco.

And this is the world in which God sent his only begotten Son to redeem us by dying for our sins so we frail, flawed mortal beings might through His grace and mercy earn eternal salvation.

Merry Christmas, one and all, and tidings of comfort and joy in these chaotic days. As for the New Year, may it be happy—

Until we all die (again).

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo Credit: Mike Kemp/In Pictures via Getty Images

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Asia • China • Donald Trump • Foreign Policy • Post • Trade

Here’s Why the Huawei Arrest Helps Negotiations with China

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Wall Street is worried that the arrest of Huawei Vice Chairman Meng Wanzhou will put President Trump’s ongoing trade negotiations with China on ice.

They fear that China may retreat from its G-20 promises, or perhaps even call off the negotiations altogether. Some have suggested that U.S. tech executives avoid traveling to China, fearing revenge arrests.

As someone who has followed elite politics in Communist China for 40 years, I disagree. In fact, I think that Meng’s arrest may actually help move the negotiations along.

China’s leaders see her arrest as a deliberate provocation, intended to provoke them into the kinds of overreactions that would blow up the trade negotiations.

They view it, in other words, as a strategic deception.

Anyone who has read their Sun-Tzu knows that deception is the primary category—the default position, if you will—of Chinese strategic thought. And the ancient strategist’s famous dictum, “All warfare is deception,” obviously applies to trade wars as well.

China knows that the president’s advisors are divided between the globalists, who hope for a win-win agreement on trade, and the nationalists, who want to disengage America’s economy from China’s. They fear that the nationalists have arranged the arrest of the Huawei executive precisely because they want to undermine the trade negotiations, and send China’s economy over a cliff.

The looming tariffs of 25 percent, scheduled to take effect on March 1 absent a deal, would cripple China’s export economy. It would drive supply chains to the tariff-free climes of India, Vietnam, and the Philippines. It would cause many Chinese companies to go bankrupt, and the Shanghai and Hong Kong exchanges to plummet. China might well be trapped in the middle-income, also-ran, economic no-man’s-land that it so desperately wants to avoid.

Official Washington has claimed that Meng was detained as a result of a longstanding investigation. The timing of her arrest at the precise moment of the Xi-Trump meeting was, we are told, mere coincidence. Whatever you think of that explanation, official Beijing is having none of it.

It is, indeed, harder to imagine a higher profile target than the vice chairman and heiress-apparent of Huawei, China’s leading hi-tech company and a key player in the “Made in China 2025” plan.

Not only is Meng the daughter of Huawei’s founder, she is the granddaughter of a senior party official, Meng Dongbo, who fought alongside Chairman Mao in the Chinese Civil War and later served as vice governor of Sichuan, China’s most populous province. In other words, she is a bona fide member of China’s Communist aristocracy, which is why the Chinese refer to her as “princess.”

The woman languishing in a Canadian jail cell is China’s Tim Cook and China’s Ivanka Trump all rolled into one.

The Chinese leadership has concluded from both from the timing and from the target that this was a setup.

Add to this the fact that the Chinese leadership has grown very wary of Donald J. Trump. They see him as tactical on trade—addressing an issue, extracting as many concessions as he can, and then moving on to the next issue.

But they also see him a strategic in a global sense, intent upon maintaining American dominance in the century that was supposed to be owned by China.

The state-run Global Times initially denounced the arrest as a violation of the spirit of the trade truce reached during the Xi-Trump dinner. But in the days since, the rhetoric has been ratcheted down, and Beijing is going out of its way to delink the two.

Sensing a trap, Communist leader Xi Jinping has not seized upon the arrest of Meng as a reason to derail the talks. Instead, he seems to have recommitted himself to working out a trade deal with the United States as the March 1 deadline looms ever closer.

Of course, deal or no deal, Beijing’s two-decades-long orgy of lawless and predatory behavior needs to come to an end.

In the meantime, neither Tim Cook nor Ivanka Trump need fear arrest if they travel to China.

Photo Credit: Omar Marques/SOPA Images/LightRocket via Getty Images

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Center for American Greatness • China • Congress • Free Speech • Online Censorship • Post • Technology • The Left

The Eagle and the Dragonfly: How Google Threatens Freedom

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Google CEO Sundar Pichai’s recent congressional testimony capped a deservedly rough year for the embattled search giant. While Pichai largely avoided any major missteps in his testimony—thanks mostly to the technological illiteracy of the questioners—even Google-friendly sources couldn’t help noticing his evasiveness on one key point: the infamous proposed partnership between Google and the Chinese government to build a censored search engine in line with Chinese government ideology—a project ominously code-named “Project Dragonfly.”

Most notably, Pichai absolutely refused to rule out making such a product, instead devolving to corporate doublespeak about being “committed to engagement,” whatever that means. He also tried to downplay Project Dragonfly, characterizing it merely as an “internal product,” rather than something under serious development.

This was wise of him, considering that the reports on what Dragonfly allegedly is being designed to do. According to a suppressed Google internal memo, Dragonfly is being built not only to limit search results, but also to enable the Chinese government to track what every single citizen searches for on the app. In other words, it’s a surveillance tool disguised as a search engine.

In a country on the verge of implementing a totalitarian “social credit” score for every citizen—a score that will infect every element of their lives, up to and including their online gaming habits—this is a hideously irresponsible thing for an American company to provide. Small wonder, then, that Congress grilled Pichai on the subject.

Death of Privacy, Rise of Censorship
What is more worrisome than this for Americans, however, is that along with dodging questions on Dragonfly, Pichai also evaded questions on another topic. Specifically, when Rep. Karen Handel (R-Ga.) asked Pichai about Google’s ability to collect data on American citizens, and whether that data collection should be something Americans have the right to opt into, rather than having it done by default unless they opt out, Pichai again demurred on giving a straight answer.

“I think a framework for privacy where users have a sense of transparency, control, and choice, and a clear understanding of the choices they need to make is very good for consumers,” Pichai stammered.

Even on its own, to call this an unsatisfactory answer is putting it mildly. But, considering its conjunction with Pichai’s less-than-forthcoming answers on Dragonfly, it is positively alarming. Based on these two areas of evasion, Americans would be highly justified in wondering: If Pichai is prepared to hand over Google’s massive data collection efforts to the Chinese government to track its citizens for political purposes, then what would he be willing to do to Americans? Given Google’s power-grabbing stated plans to become “the good censor” of the entire internet, this is far from an abstract question. Indeed, it’s hard to think of any level of power that Google’s snowflake-infested headquarters doesn’t feel entitled to have over everyone, Americans included.

This also makes the development of Project Dragonfly not merely a question of trying to assure the privacy of oppressed Chinese citizens. It makes it an urgent threat to Americans. Even if Pichai were telling the truth that the development of Dragonfly is purely internal, and has not been pitched to the Chinese government, the fact remains that tools developed to censor the internet in China can be used to censor it here in America.

Insidious Technology
Worse, if Google decided to implement such a censorious regime on its own search engine, there would be no real way for Americans even to know about it, given Google’s notoriously private attitude toward its search algorithms. Nor would there be a way for Americans to know the scope of potential surveillance that Google might be conducting on them. For journalists or politicians critical of Google, this is an extremely live concern, considering that Google can use its cell phones to track even details as minute as what vehicles people are using to travel, and to where. That kind of surveillance capacity for political opponents could easily be weaponized as material for blackmail or public shaming.

That we even have to think about these kind of scenarios is a sign of just how anti-American Google’s entire current philosophical attitude is. The small-l liberal ideas that people should be permitted to make their own decisions, that the public square and the private sphere should be separate, or that people’s thoughts are no business of the state, or of massive corporations that arrogate government power to themselves, are all cornerstones of American political philosophy. They are also all ideas for which the development of Project Dragonfly, and the data collection without consent model of Google’s business, display an open and active contempt.

In the past, I have wondered what the data tech companies extract from Americans must be worth, and how Americans might reclaim that value in monetary terms. But Pichai’s testimony shows that there may be a more fundamental reckoning than this coming: namely, how much does the collection of data impose a cost on individual human freedom, and is that cost irreversible? For the sake of the values that animate America, we can only hope the answer to the last question is “no.”

Otherwise, we could not only see the American way entombed by the Googley way, but based on how Sundar Pichai treats questions that threaten his company’s power, we might never even know that the Dragonfly killed the Eagle.

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo Credit: Alex Wong/Getty Images

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Administrative State • China • Donald Trump • Free Speech • Post • Technology • The Left

Break Up Google for the Public Good

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It’s time for all of us to admit that Alphabet, Inc. is the 21st century equivalent of Ma Bell: it is an almost all-controlling monopoly that restricts consumer choice in order to maximize profit for the company. We all know what Ronald Reagan did to AT&T. He broke up that monopoly so Americans could have real choices and the free market could actually work.

So it’s time for the Trump Administration to break up the Alphabet, Inc. monopoly. But unlike the Ma Bell monopoly, Alphabet, Inc.’s monopoly—which includes the search-engine behemoth Google—isn’t just about greater competition and more choices for the American people. It’s about so much more: free political discourse and our privacy rights as citizens.

Last week in Washington D.C., the House called in Google CEO Sundar Pichai to question him about the bias against conservatives at his company, but also about data privacy and Google’s plans for working with China. Every last one of those issues should trouble every last American.

The mainstream media, as the mindless propagandists of the deep state and Democratic Party, are still trying to maintain the miserable hoax of Russian collusion to cover up their own misdeeds and incompetence in the 2016 election. Yet they are willfully ignoring Google’s role. Google employees and executives were caught discussing in leaked emails their desire to boost turnout and manipulating information flow in the 2016 elections in order to hinder candidates they opposed and support others. This is more far-reaching and frightening than Russia taking out small ad buys on Facebook.

Google’s method censoring certain beliefs isn’t something new to the corporation or merely drawn out by the passions of the 2016 contest. Though most Americans aren’t aware of it, Google has been cutting deals with foreign governments to censor and “cooperate” for years in order to make more money. Google cut deals with the German and French governments a decade ago to share information about far-right political parties and organizations with federal law enforcement.

And this from a company that is likely collecting more personally identifiable data on individuals every day than any other entity in the entire world. If you were concerned about the NSA’s data collection on American citizens, how could one not be horrified by what Google is doing?

We need to understand that Google is not loyal to any nation-state. Apparently it wants nothing to do with our Department of Defense, which means it is not aligned with our national defense and security issues because it considers itself a multinational global company, not an American one. While it is refusing to do work with the Pentagon, it’s been cavorting with the world’s largest authoritarian police state in China. China, by far the biggest threat to the United States, has been clear about its goals and hopes of replacing us on the world stage.

Pichai denied any plans to launch Project Dragonfly, the censoring and invasive search platform that Google, according to hundreds of reports, has been building for the Chinese Communist Party. But does anyone really believe him? Google clearly has no problem censoring on behalf of foreign governments, as its past behavior has shown, so why should we believe what it says in regard to China?

The relationship between Google and China becomes even more troubling in the greater context of where we are headed with the Internet of Things (IoT) and even greater connectivity. Many Americans are placing these smart devices in their homes, from Alexa to Nests to smart fridges, Apple watches, Fitbits, even smart light fixtures, in hopes of making their lives easier. By some reports, there are already 8-9 billion smart devices in the world with that figure likely to exceed 20 billion in the next few years.

What’s becoming clear is that the IoT at scale has not truly been considered: the amount of data generated in individual homes, every day, will be staggering. Most Americans are not prepared to handle and manage the flow of data that will be coming out of their homes. Most will be unable to tell anyone where that personal data is going or what it’s being used for. They won’t know whether their smart device is actually “plugged” into a Chinese IoT platform like Tuya, which already has a significant market share in the IoT space and of course has close ties to the Chinese government.

We have to remember that for every good use of smart devices and data, there is a nefarious use as well: personally identifiable data combined with data mining and analytics opens the door to all sorts of shenanigans. There is always a flip side of the coin. With a little creativity it’s not that hard to imagine some of the things that can be done with data and manipulation.

So now you have a company, Google, that doesn’t really consider itself American, that really isn’t loyal to the country that gave it the ability to rise, that really isn’t loyal to many American values, that is truly only loyal to itself and its left-wing worldview. That company, already collecting the most personal and identifiable data in the world, is not transparent about what it’s doing with the data, and is positioned to become even more powerful in the new world order that the IoT is going to usher in.

Now combine that power with the power of the world’s largest police state—China—which is also the world’s second largest economy and which has flatly stated it seeks to displace the United States. What could possibly go wrong?

To be blunt, everything.

Trump is absolutely correct to be confronting China in this moment: if Trump had not decided to confront China, a generation from now we would have regretted it as we became, for all intents and purposes, a tributary state of China’s.

In the same way that Trump is confronting China, he must confront Google and the other tech companies. Some, like Alphabet, Inc., must be broken up. Others must be redefined properly for what they are: publishers and telecommunications companies.

Trump needs to succeed on China and on the tech companies: the freedom and future happiness of the American people literally depend on it.

Photo Credit: Alex Wong/Getty Images

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America • Asia • Center for American Greatness • China • Defense of the West • Economy • Foreign Policy • Post • Technology • The Media • Trade

Free the Kidnapped Canadians in Communist China

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Last week, we discussed the national security threat to the United States and her siblings in the family of free nations that is posed by Communist China’s Huawei technology company—specifically, in the words of Eli Lake, “that China’s largest telecom company will allow the Chinese state to monitor the electronic communications of anyone using Huawei technology.”

Now, in light of the detention of Huawei’s Chief Financial Officer, Meng Wanzhou, by Canadian officials for potential extradition to the United States to face charges related to the Iranian Sanctions Act, the Beijing junta hamfistedly reaffirms our assessment’s prudential rectitude of both the company and the communist regime.

Per the BBC, not one, but two Canadian citizens—Michael Kovrig and Michael Spavor—living and working in communist China have “disappeared” or are being detained by the regime; and, despite the efforts of Canadian officials to raise the issue at the highest levels in Communist China’s regime, neither man has been released.

An employee of the International Crisis Group, which is gravely concerned about his welfare, Kovrig is believed to have been arrested by the Chinese regime “on suspicion of engaging in activities that harm China’s state security.”

Spavor, an entrepreneur with the “Paektu Cultural Exchange that organizes business, culture and tourism trips to North Korea,” had informed Canadian officials he was being questioned by the Communist government. Subsequently, he, too, is apparently being held on the suspicion of “engaging in activities that endanger China’s national security”; and, per Canadian officials, his whereabouts are difficult to determine.

What isn’t difficult to determine in this “delicate situation” is the wicked game being played by the Communist Chinese regime. Sure, using diplomatic parlance, Canadian officials state that there isn’t any “explicit indication” that the Communist Chinese have detained the two Canadian citizens. Yet, one doesn’t need to be have a degree in international relations—more useful would be watching “The Sopranos”—to understand this is doubtless a manifestation of one of the “unspecified threats” by the communist regime in the wake of Meng’s detention.

Bluntly, the Communist Chinese regime is less a government than a racket; and Canada must not allow itself to be intimidated by these socialist shakedown artists.

No, in dealing with these ideological fossils who still try to pass off Communism—a murderous screed of tyrannical butchers—as a rival and superseding model of governance to liberal democracy, Prime Minister Justin Trudeau must not capitulate to these global kidnappers’ ransom demands, namely the release of Weng. Ever imperious and never wanting to be seen losing face, Communist China is trying to coerce Canada into begging the United States to drop the charges against Meng to secure her release.

Just say “no,” Mr. Trudeau.

Rather, Trudeau should call President Trump and secure his commitment not to drop the U.S. charges against Meng; and, thus assured he will not be undercut by his friends to the south, he should commence raising tariffs and trade barriers and kicking Chinese diplomats out of Canada until his two kidnapped citizens are released unharmed.

Oh, and speaking of Huawei, remember that October letter from Senators Marco Rubio (R-Fla.) and Mark Warner (D-Va.) to Prime Minister Trudeau that warned of joint intelligence activities with the United States, the U.K., Australia, and New Zealand possibly being curbed if Canada allows Huawei to aid in the construction or maintain his nation’s 5G wireless network? Now would be good time for Trudeau to affirmatively respond: “Screw those Chi-com hosers, eh?”

It might not have the ring of “tear down this wall,” but it’s a damn fine sentiment and a damn good start.

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo credit: Wu Hong (Pool)/Getty Images

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China • Economy • Foreign Policy • Post • the Presidency • Trade

America: China’s Mercantile Resource Colony

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China’s economy is now the largest on earth. Its industrial output is triple that of the United States. Its population, quadruple. To make matters worse, Chinese computing power is on par with ours and their scientific output is gaining fast.

This is no accident. Like Britain, China transitioned from an agrarian to an industrial economy by embracing mercantilism and piggybacking on America’s market.

America is becoming China’s economic colony. China’s slave. But it doesn’t have to be this way. As Britain did, China chose her fate. Now is the time for Americans to choose: do they want liberal free trade and “cheap” Chinese junk, or do they want conservative tariffs? Put another way, do they want an economic future?

President Donald Trump and Chinese President Xi Jinping agreed last week to a 90-day ceasefire in our ongoing trade war.

Trump will postpone the raising of tariff rates on some $200 billion worth of Chinese goods, which was scheduled to occur on January 1. In exchange, China agreed to buy “a very substantial amount of agricultural, energy, industrial, and other products from the United States to reduce the trade imbalance” according to a statement from Sarah Sanders.

China also agreed to aid Trump in denuclearizing the Korean Peninsula and to designate fentanyl as a controlled substance, which will many argue will help America quell its opioid crisis. This is welcome news.

This ceasefire buys both nations time to discuss a number of issues, including the rampant theft of American intellectual property—which costs America some $600 billion in lost profits annually—and China’s variety of non-monetary market barriers.

As of now it looks like President Trump’s tariffs are working as anticipated: tariffs provided the leverage necessary to bring China to the negotiating table. This is unsurprising. The simple fact that China runs a massive trade surplus with America means that China needs us far more than we need China.

Trump knows it. China knows it. And now the world knows it.

In a bolder, more patriotic age the mainstream media would be praising the president for having the fortitude to stay the course. Instead, the consensus view appears to be that Trump should sheepishly apologize to China and wave the white flag: drop all tariffs and let China continue to pillage our nation.

This is not an option.

China is turning America into its mercantile resource colony—just like the British did to the Thirteen Colonies in the decades before the Revolution. I do not say this for provocative rhetorical effect. The only real difference between the two situations is that King George bought our tobacco. China prefers our soybeans.

Snakes and Ladders
In 1776 “no taxation without representation” was not just a political slogan—it was call to arms.

Yet despite the mythology surrounding the American Revolution’s purported casus belli, the phrase was mostly hollow. In fact, the colonists were the most lightly taxed of all Britain’s subjects—those in Britain paid 25 times as much. Further, most of the burden of Britain’s increasingly “intolerable” taxes fell squarely upon the colonial elite. For example, the taxes imposed by the Stamp Act were primarily born by lawyers and other professionals, while the Sugar Act targeted corpulent elites and alcoholics with a taste for rum.

Most American colonists didn’t care about the “intolerable” taxes. They didn’t pay them. Instead, ordinary colonists were mostly concerned with the taxes that Britons imposed upon themselves—tariffs.

In 1721 Britain’s Prime Minister Robert Walpole coalesced the swirling ether that was Parliament’s economic policy into a coherent, nationalistic trade regime: Walpole adopted mercantilism.

Mercantilism is much-maligned and even more misunderstood, so let me clearly define the term: the mercantilist’s ultimate goal is not to hoard gold nor to give political goodies to his friends. Instead, he seeks to increase the size of his nation’s value-added industries by piggybacking on foreign (and colonial) markets. This is done by encouraging economic autarky (self-sufficiency) and export surpluses in value-added production, while limiting imports to raw or exotic materials.

To concentrate value-added industry in Britain, Walpole lowered or eliminated import duties on raw materials, abolished export duties on manufactured goods, boosted tariffs on manufacturing imports, subsidized new industries, and increased quality controls to guarantee that British goods were of high quality. While such government intervention may sound onerous, a policy must be measured according to its practical effects—not its ideological purity.

The only question worth considering is whether mercantilism made Britain rich. The answer is  yes—at colonial expense.

Between the decade 1721-1730 and the decade 1761-1770, Britain’s average annual trade surplus with the American colonies grew from £67,000 to £739,000. For context, the dreaded Sugar Act generated a mere £30,000 in annual revenue, while the Stamp Act was projected to generate some £60,000 before it was repealed. Britain made far more money exporting to the colonies than it did taxing them.

Not only did the value of British exports increase, but their composition changed. Between 1700 and 1773, raw materials as a percentage of overall exports declined from 13.2 to 8.8 percent. Likewise, the share of woolen textiles declined from 47.5 to 26.7 percent. These low-margin exports were replaced by manufactured products, the proportion of which rose from 8.4 percent to 27.4 percent. This includes things like glassware, tools, weapons, paper, hats, and nautical instruments—complex, value-added production.

Finally, Britain cut its imports of manufactured goods by half during the period (from 31.7 percent of total imports to 16.9 percent).

Summing up: Britain embraced mercantilism and imposed high tariffs on its value-added industries. This, combined with large export markets in America, clustered an otherwise impossibly large amount of industry in Britain. This boosted wages for Englishmen and multiplied the number of individuals working in “cutting-edge” industries like textile mills. Thus, tariffs—mercantilism—fertilized the soil in which the Industrial Revolution sprouted.

Of course, the opposite of this was true in America. The composition and sheer size of the trade deficit with Britain virtually guaranteed that the 13 colonies would remain economic backwaters, locked into exporting natural resources to Britain in exchange for manufacturing. The colonies were import-dependent—like modern-day Guatemala or Kenya. And America would have remained poor like Guatemala if the Founding Fathers had not copied Britain and imposed significant tariffs.

Being Benjamin Button
America is a curious case. Despite fighting a bloody revolution to free herself from her father’s shackles, she willingly—gleefully—now enslaves herself to a harsher master: China.

In the beginning, America’s economy benefited from its small, but burgeoning trade relationship with China. They sold us raw materials and low-value output while they bought expensive machinery. We were the mercantile motherland, they were our colony.

For example, according to data compiled by the Observatory of Economic Complexity (which provides fantastic, free data-visualization tools), in 1986 46 percent of our imports from China were garments while 6.2 percent was fabric. Fully 20 percent of our imports were raw materials (seafood, oil, minerals, exotic vegetables).

Meanwhile, 31 percent of our total exports to China was machinery, 13 percent electronics, and 11 percent aircraft. Less than 10 percent of our exports were raw materials (mostly timber).

Of course, the Chinese had no intention of being just another Indonesia or another Brazil. Import dependency was not in their future. Instead, China imposed significant tariffs and non-monetary market barriers on value-added imports, while also encouraging domestic industries with generous subsidies—exactly what Robert Walpole did in 1721.

Guess what? Mercantilism worked. Again.

By 2016, garments constituted just 14 percent of America’s imports from China. Textiles fell to an insignificant 0.49 percent. Raw materials, less than 2 percent. Meanwhile, high-value imports surged: electronics constituted 42 percent of our imports from China, while another 15 percent was machinery.

Conversely, the complexity of our exports to China decreased during this period. Electronics constituted just 11 percent of our exports, machinery 21 percent, and aircraft merely 0.27 percent. Meanwhile, over 25 percent of our exports were raw (or lightly-refined) materials like cereals and vegetable oils, petroleum, and minerals.

America’s economy is simplifying in response to Chinese demand—which will only impoverish us in the long run. The below visualization is worth a thousand words:

What will it be, America? More slavery—or freedom?

Photo Credit: STR/AFP/Getty Images

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America • Center for American Greatness • China • Foreign Policy • Post • Technology

Communist China’s Huawei: ‘Déjà Vu All Over Again’

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Back in the fall of 2007, I went on the U.S. House floor and locked horns with Communist China’s Huawei technology company and its American supporters in the private and public sectors. My conviction then was that the company constituted a threat to the security of the United States. I argued that the Committee on Foreign Investment in the United States should block Huawei’s purchase of a significant minority stake in the 3Com Corporation. As I noted in a November 2007 Human Events article:

The psychological disorder termed “cognitive dissonance” occurs when individuals refuse to acknowledge facts that contradict their existing views. In the realm of national security, the equivalent of cognitive dissonance is properly termed “communist dissonance.” This occurs when the global sophisticates inhabiting America’s business and political elites refuse to recognize facts contradicting their belief communist China is our friend.

Ultimately, that deal did not go through. Still, at that time, America’s appeasers of Communist China were legion for all the wrong reasons—avarice, arrogance, and power. Opposition to such appeasement was branded naïve, at best, or antiquated Cold War jingoism, at worst.

Yet, through it all, the clarion moral vision of people who understood Communism is an oppressive, insidious system, such as Gordon Chang, the late Harry Wu, and other intrepid souls has persisted and, God willing, prevailed at least in the present instance of Huawei.

Now more than a decade later, there comes this tweet from Mark Dubowitz, chief executive of the Foundation for the Defense of Democracies:

The Eli Lake article is headlined, “Why Huawei Should Worry America: Be more concerned about the company’s possible involvement in espionage than its alleged violations of sanctions against Iran.”

Lake recaps “the arrest in Canada of Wanzhou Meng, Huawei’s chief financial officer . . . on what appears to be Huawei’s evasion of U.S. sanctions against Iran.” Then Lake quickly cuts to the chase: “These are serious allegations, but U.S. intelligence agencies have an even greater concern: that China’s largest telecom company will allow the Chinese state to monitor the electronic communications of anyone using Huawei technology.”

Lake recounts how earlier this year U.S. spy agencies urged Americans not to use Huawei phones; how Australia banned Huawei from assisting the development of its 5G wireless network; and, how in October, Senators Marco Rubio (R-Fla.) and Mark Warner (D-Va.) warned Canada’s prime minister, Justin Trudeau, that joint intelligence activities with the United States, Great Britain, Australia, and New Zealand may be curtailed if Canada allows Huawei to aid in the construction or maintenance of his nation’s 5G wireless network.

Further, he informs readers how, in 2012, the House Intelligence Committee released a “comprehensive report on Huawei and ZTE” that determined: “Inserting malicious hardware or software implants into Chinese-manufactured telecommunications components and systems headed for U.S. customers could allow Beijing to shut down or degrade critical national security systems in a time of crisis or war.”

This report’s perspicacity, Lake notes, was ironically attested to by communist China’s 2017 “National Intelligence Law and a related cybersecurity law,” which compels Chinese companies like Huawei to abet the communist dictatorship in its espionage activities—including “offensive intelligence operations,” such as “handing over access to ‘key business and personal data (which must be stored in China), proprietary codes, and other intellectual property” (per a Lawfare analysis).

In referring to this 2012 report, Lake believes that “in some ways these concerns about Huawei are old news.”

Yep, as Yogi Berra said, “it’s like déjà vu all over again.” But what is new is the growing number of voices in American government who are finally recognizing what so many sovereign American citizens have long known: China is a nuclear-armed Communist dictatorship that views itself as a rival model of government to liberal democracies; and covets a method for subjugating and oppressing the rest of the world as it has its own people.

Thus, over a decade and many positive developments later after I first tussled with Huawei, my wishes for China’s Communist butchers, who murdered my generation of Chinese freedom seekers in Tiananmen Square, and for their dwindling numbers of American appeasers, which remain unchanged and unprintable, are increasingly, if belatedly, being echoed in all the right places.

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo Credit: David Becker/Getty Images

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China • Donald Trump • Foreign Policy • Post • the Presidency

Trump and Xi’s G20 Meeting Is An Opportunity for Self-Reflection

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The supreme art of war is to subdue the enemy without fighting. Sun Tzu dictated this truism in The Art of War in the 5th century B.C. Its meaning is deeply imbedded in the Chinese memory and was acutely felt by China leading up to, during, and in the aftermath of the Opium Wars of the mid-19th century. Then, British imperialists surreptitiously created an epidemic-level addiction crisis by injecting opium into the Chinese economy in the name of free trade. Now, tens of thousands of Americans die yearly from overdoses of illicit fentanyl, an opioid derivative manufactured in China and distributed throughout America through trading routes that intersect our porous southwestern border.

For many years, the Chinese chemical industry has subverted international standards by innovating around regulations designed to control fentanyl production. International drug enforcement agencies’ futile attempts to amend scientific literature inadvertently have provided a roadmap for unregulated Chinese companies to keep developing novel synthetic opioids and profit from their distribution in America. For the past five years, capitalizing on technically legal workarounds, each new Chinese drug product entering the U.S. market has been less illegal but more lethal.

Despite overwhelming evidence, the Chinese government has repeatedly skirted the fact that most of the United States’ fentanyl originates in China until the G20 Summit last week. In response to President Trump calling out this fact in August 2017, deputy secretary-general of China’s National Narcotics Commission Wei Xiaojun said, “China did not ‘deny or reject’ that some fentanyl produced in China had made its way to the United States.”

In speaking with Vice, Yu Haibin, the agency’s director for precursor chemical control, insinuated that the crisis was demand driven, minimizing China’s role. “It’s hard to blame the crimes and abuses of fentanyl on one country alone,” Yu said. “This is not objective and overly arbitrary. Many states in the U.S. are still legalizing the use of marijuana. These trends certainly contribute to the abuse of fentanyl-type substances.”

What Drives Fentanyl Abuse?
While the drug crisis as we experience it today in America was precipitated by a combination both of demand-side and supply-side factors (a toxic chicken-or-egg combination of cultural malaise and pharmaceutical over-prescription), evidence suggests that the fentanyl crisis is an overwhelmingly supply-side issue. In other words, drug users are not asking for fentanyl. Two demographic indicators suggest that the introduction of fentanyl into the system is not a demand-driven event.

In the first place, overdose by fentanyl is a regionally discrete issue, suggesting that a large supply player is involved. Secondly, fentanyl’s unintentional use far outweighs its intentional use. Deaths by fentanyl are generally deaths by fentanyl-contaminated or fentanyl-adulterated products.

Only when an official Senate investigation proved the veracity of the president’s original claim did officials in China offer to step up cooperation with the United States on the issue. Only when the Chinese economy was jeopardized by tariffs was a formal recognition of the abuses of fentanyl distributors forthcoming.

On November 30, as President Trump and Xi Jinping broke bread at the G20 summit in Buenos Aires, Xi offered that China would recognize fentanyl as a controlled substance in the context of our ongoing trade war.

In a statement released by the White House, Sarah Sanders said, “Very importantly, President Xi, in a wonderful humanitarian gesture, has agreed to designate Fentanyl as a Controlled Substance, meaning that people selling Fentanyl to the United States will be subject to China’s maximum penalty under the law.”

In positively affirming Xi’s offer, Sanders was being diplomatic. The Trump Administration should resume relations with a “trust but verify” attitude, however. Any nation would be remiss to place complete faith in a “humanitarian gesture” originating from a regime so unflinchingly anti-humanity, especially in the context of trade negotiations.

How Can We Ensure Accountability?
Several questions remain. The maximum penalty under Chinese law for drug trafficking is death. Would the Chinese government kill its own people? Certainly. But would they enforce such measures at the behest and for the benefit of the United States? Moreover, how can the United States verify that the gesture has any substance behind it? Or is this likely to be more of the Chinese government’s typical rhetorical jiu-jitsu?

The politburo’s routine imprisonment of its own people justifies and is justified by the ultimate authority and supremacy of the Chinese government. To kill in the service of the greater Chinese national interest is one thing. To kill on behalf of the American desire for justice is another. Even (perhaps especially) as the Chinese government signals compliance with Western humanitarian values, the U.S. should remain vigilant.

Moving forward, this current opioid crisis requires an honest estimation both of China and of America. Fentanyl’s penetration of the U.S. illicit drug market is a form of surreptitious, unrestricted warfare. In effect, this is a depopulation campaign enacted on those who have lost their livelihoods due to automation, offshoring, and migratory labor. The demoralizing effect of the fentanyl crisis on middle America cannot be overstated.

Widespread addiction and its sister, social dispossession, open America up to domination in the long term. The profiteers of the crisis, both primary and complicit, must be punished according to the severity of their crimes. This moment of recognition is an opportunity. If we fail to follow up, we allow ourselves to be subdued without even fighting. Trump and Xi’s meeting at the G20 Summit will either mark a turning point or another hollow promise floated by the Chinese government in pursuit of its interests. For communists and oriental despots, the ends always justify the means. No matter the true meaning of the moment, which will surely reveal itself over time, it requires energetic attention.

This current opioid crisis is an almost perfect reversal of the conditions leading up to the Opium Wars just two centuries ago. In time, the Chinese learned their lesson. America must take heed of history as well.

Photo Credit: Saul Loeb/AFP/Getty Images

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Asia • China • Foreign Policy • Post • Technology

Americans Need Protection from Chinese Hackers

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Earlier this fall, the United States issued reports and warnings that hackers with backing from the Chinese government and military pose serious cyber-threats to U.S.-based companies. It is not just American businesses that need to be wary of Chinese privacy and security breaches, however; American consumers should be concerned as well.

Recently, the U.S. Department of Homeland Security warned U.S. firms to be vigilant about potential cyber-threats from Chinese firms that either solely or with U.S. partners offer managed services, such as IT support for American companies that choose to outsource their IT needs. At the same time, the U.S. Computer Emergency Response Team (US-CERT), which provides disaster response and warnings about serious cybersecurity issues, published an alert that un-named countries are using cloud services to steal data and trade secrets from U.S. companies.

US-CERT did not identify the nation-states that were launching the attacks or the companies that were victimized, but China has long been known to be a sponsor of government- and military-backed hacks. US-CERT indicated that the cyber-attacks targeted information technology firms, health-care companies, telecommunications and Internet providers, and manufacturers—all entities that Chinese cyber-attacks have previously sought to undercut.

At the same time these warnings were being released, Bloomberg published a stunning investigation showing that Chinese hackers most likely backed by the Chinese government, inserted chips into network servers used by U.S. government entities—the Defense Department and CIA—and more than 30 major U.S. corporations. Despite significant pushback from some parties, Bloomberg stood by its story which found that the motherboards for the servers where the chips were found were built by a company bought by Amazon in 2015, but may have been in place before Amazon’s purchase.

Amazon is now one of the world’s largest cloud server providers, with extensive government and corporate clients worldwide. The chips enabled hackers to gain direct access to the networks that the servers helped to manage. In other words, the hackers had access to U.S. Navy and CIA data, as well as data for global banks and perhaps Apple. Such backdoor hacks are even showing up on Internet networking equipment, according to Bloomberg.

Beyond the potential for personal data theft from banks or employers, or even personal data stored by government agencies, such as the IRS or Health and Human Services, what does all this mean for consumers?  That they need to be wary not only about how they connect to the Internet and the information they share, but also about what hardware they use to connect to the Internet, as consumers increasingly embed every facet of their life to the so-called Internet of Things (IoT).

Whether it’s in-home personal assistants offered by Amazon, Google, or Apple that listen to your every word and store all that data to serve you better, or “smart” tools like thermostats, home security systems and cameras, or e-health tools and monitors, or smart appliances, or tools that allow you to network your home with better Wi-Fi or broadband access, all of them have to store consumers’ data to function properly. And all of them, most likely, have to connect to cloud storage systems via the Internet.

Consider this: thousands of the motherboards like the ones produced for Amazon’s server company are produced by tech firms in Chinese cities you’ve never heard of like Guangzhou, a city in southeastern Chin or Shenzhen, the “Silicon Valley of Hardware,” and home to tech giants like Huawei or Tuya. These companies can produce IoT hardware—voice assistants to thermostats, in-home video cameras, and Wi-Fi extenders—for U.S. businesses in less than 90 days and at prices virtually any American consumer could afford. But it’s hardly unusual to find chips or software embedded in devices for U.S. purchase that transmit data back to Chinese servers or that provide back door access for hackers to U.S. networks.

There was a saying a few years ago in Silicon Valley that “data is the new oil.” While it’s true that data must be mined for value, it’s also true that where the data is located and secured to be mined can be just as important. Increasingly, American businesses and consumer companies are using cloud and data storage entities based in China or controlled by Chinese firms, many of which have close relationships with the Communist government and military.

China is looking for a technological—if not an overall economic and competitive—edge over the United States, and they are willing to do whatever it takes to achieve that end.  China is becoming the go-to nation state for good quality computer chips for all sorts of products.  We now are seeing why U.S. based companies leaning on Chinese-owned or managed data storage or data management not only puts U.S. innovation and strategic advantage at risk, but also consumers’ data.

As President Trump, his Commerce Department, and other trade advisers continue their dialogue with China on a new trade agreement, it’s time for the administration not only to talk tough on steel, autos, and agriculture. It’s time to talk tough on protecting America’s intellectual property from hackers, and to protect consumers’ data, too. Indeed, it’s long past the time to talk about it. It’s time to do something about it.

Photo Credit: STR/AFP/Getty Images

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2016 Election • America • China • Democrats • Elections • Post • Trade

Rethinking Free Trade on the Campaign Trail

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Eight hours before the first polls closed on November 8, 2016, the late Charles Krauthammer appeared on Fox News and made a prediction. Should Trump win, he said, it would “irreversibly” change the Republican Party.

“Particularly the most obvious issues will be immigration and trade,” Krauthammer explained.

Nearly two years into the Trump presidency, a look at debates from key Senate races may offer a hint at the party’s future on trade. The old guard is sticking with its free-trade roots.

“I am for freedom, free people and free markets, and I am not a fan of tariffs and never have been,” Tennessee Republican Marsha Blackburn said in her debate with Democrat Phil Bredesen. “But China has had a trade war on us for decades, and if we’re in a trade war, for goodness sakes let’s make sure we win this. Now, I hope that we get these tariffs over and done with because they are not good for Tennessee.”

Moments later Blackburn was asked to name one Trump policy she disagreed with.

“One is the tariffs . . . ”

On this the two candidates agreed. “The tariffs we have right now are hurting Tennessee badly,” Bredesen said.

The free trade question has sometimes offered a rare note of harmony for debating Republicans and Democrats who can’t agree on much else.

“I’m against tariffs. I’m against a trade war,” Senator Ted Cruz (R-Texas) said during his debate with Democratic Rep. Beto O’Rourke. “This is one of the few issues on which Congressman O’Rourke and I have some common ground in that we’ve both spoken out in favor of trade.”

Whether out of conviction or because of their reading of the electorate, the tone is often different from emerging GOP voices.

Martha McSally is the Republican Party establishment candidate in Arizona. She recently campaigned with unabashed free trader Mitt Romney.

Yet when the question came up in her October debate with Rep. Kyrsten Sinema, McSally said, “I believe in free and fair trade.”

McSally followed up the debate with a page on her website that cast her opponent as the unrestrained free trader: “Kyrsten Sinema continues to obstruct the President’s agenda to overturn unfair trade deals that harm American workers and put America first, even though a majority of Americans agree with his trade policies.

Republican candidates are now finding a way to put the word “fair” right up there in equal billing when discussing free trade.

“Yes, we need free but fair trade,” Michigan Republican John James said in his recent Senate debate. “You can no longer have predatory business deals where China takes advantage of the American worker and the American business.”

The shift in tone and substance hasn’t gone unnoticed by the media.

It has become trendy for pundits to point to Republican candidates lagging behind the Democrats in industrial states and claim Trump’s trade policies are proving too much to bear.

Except that in some cases it is the Democrat who is more in line with Trump’s trade policy.

In Ohio, incumbent Democratic Senator and longtime free-trade critic Sherrod Brown nearly did a “happy dance” on learning of Trump’s steel tariffs, according to one news report. Brown is currently running ahead of his Republican challenger and another recent headline read, “Sticking with Trump on trade boosts Ohio Democrat in Senate race.”

Contrast that contest with the one in Missouri, where Republican Josh Hawley is running against Senator Claire McCaskill, who has criticized Trump on tariffs and trade.

In their October debate, Hawley gave an articulate and forceful defense of Trump Administration trade practices.

Hawley said America is in a trade war that China started. Then he zeroed in on McCaskill’s opposition to Trump’s aid package to help offset losses to the agriculture industry as the administration works for a better deal. Specifically, Hawley took issue with the assertion that the aid package was intervening in the market to pick winners and losers.

“With all due respect, I wanna pick winners and losers,” Hawley said. “I wanna pick Missouri farmers as winners, and I wanna pick China as a loser.”

Conservatives have long opposed using the tax code and regulation to pick winners and losers among American businesses.

Hawley makes the case that we absolutely should look out for American workers and businesses when cutting deals with other countries. It is an important distinction.

Old mantras die hard, and the most hardline free traders can still find like minds among Republican Senate candidates.

But there is increasing support from Republican politicians for trade deals that put the interests of American workers and businesses first at the negotiating table.

In line with Krauthammer’s prediction, the free trade hold on the GOP appears to have loosened significantly since that pivotal November night. It’s about time.

Photo Credit: VCG/VCG via Gettty Images

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America • China • Conservatives • Economy • Post • Trade

Dear Liberals: People Aren’t Commodities

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Afraid his son would steal his throne, Dionysius I, Tyrant of Syracuse, locked the boy away in a tower. Never leaving his prison, the boy learned about the world from his teachers and books. War, rhetoric, politics—he mastered them all. The boy was Leonidas without soldiers, Pericles without words, Themistocles without followers.

Everything changed when Dionysius I died. The boy—now a man—ascended the throne. Yet for all his knowledge he lost battles, forgot speeches, and impoverished his people. Dionysius II even invited Plato to help him rule as a philosopher-king. But all Plato’s wisdom proved worthless. He was lucky to escape Syracuse with his life.

Although Dionysius II knew everything, he also knew nothing. Theory is not reality. Logic is not experience. Knowledge is not skill. Dionysius never realized that his knowledge was ignorance, and his ignorance, knowledge. He died in disgrace.

This lesson remains true today, particularly in the field of economics. For example, although international free trade looks like a good theory, it seldom works in reality. Why? Because underlying the theory are a number of false assumptions. Free trade’s logical foundation is quicksand and no matter how sturdy and elaborate the edifice becomes, the structure is forever fragile.

Killing Archie Bunker
The story of Dionysius brings me a recent article by Andy Kessler in the Wall Street Journal. Kessler argues that “duties and tariffs are a fool’s game” because they prevent America’s multinational corporations from offshoring their “low margin” production to developing countries. This prevents America from getting rich by moving “up the margin chain.”

Kessler notes, for example, when Japanese companies began dominating the dynamic random-access memory market, American producers were forced to specialize in designing higher-margin microprocessors. The reason they could do this is that they offshored their production to places like Taiwan, which freed up American talent for better things. Kessler lauds his paradigm:

We’ll design (high margin), and they’ll manufacture (low margin). We think, they sweat. It’s the “Designed by Apple in California. Assembled in China” label.

Kessler thinks free trade like this enriches America in the same way paralegals enrich lawyers. Just as lawyers delegate menial tasks to paralegals so that they can focus on billing clients, America offshores factories to China so that Americans can focus on designing new products and services. It’s all about margins, profits. If designing is more lucrative than manufacturing, then why shouldn’t America focus on designing? And let’s be honest: who would want to work a grungy blue-collar job like Archie Bunker when he could wear a slick suit to work like Harvey Specter?

Millions of Americans, that’s who.

Not everyone wants to be the next Steve Jobs—and even if everyone did, very few people possess the necessary intellectual and creative talents. Although this will come as a shock to libertarians and “progressives” alike, the truth is that not all men are created equal in their capacities and characteristics. Some are tall, others short. Some are brave, many are cowards. A lucky few are clever, and many more are not. In the end, everyone has different proclivities and personalities, tastes and talents, skills and experience. This observation cuts to the core of the free trade debate, and brings economists to their knees.

Smarter Than the Average Bear
Assume for a moment that America fully embraces free trade, and it works exactly as planned: we offshore all our low-margin production to developing countries, and this indeed frees-up our population to work in lucrative industries like product design, finance, management etc. While this may make America richer (in the short term), it will not necessarily make Americans richer. Why? Not everyone can be an engineer, investment banker, or lawyer—most people just aren’t smart enough, and many more don’t have the personality for it. It’s harsh, but true.

Charles Murray explains in his seminal book The Bell Curve that human intelligence, as measured by IQ, conforms to a normal distribution. That is, most people are of roughly average intelligence (68.2 percent fall within one standard deviation of the mean), while a minority are significantly more or less intelligent than average (15.9 percent are one or more standard deviations above or below the mean respectively). Importantly, half of all Americans are smarter than average—and half are, well, below the average. This has big economic consequences which Kessler ignores.

For example, America’s average IQ is 100, while the average IQ of engineers is about one standard deviation higher. This means that the average engineer is more intelligent than some 85 percent of the general population. Further, the data implies that an “IQ threshold” exists near 105 IQ points, below which the odds of someone becoming an engineer are infinitesimally small. This suggests that 62 percent of Americans are simply not bright enough to be engineers—no matter how hard they try. Biology limits us, whether we accept it or not.

People not only differ in cognitive ability, they also differ in personality. According to the five factor model, people’s personalities are rooted in five basic psychological predilections: openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism. These personality foundations impact everything about us, and have important economic consequences.

Consider the trait “conscientiousness.” Conscientious people tend to be organized and dependable, disciplined: they show up for work on time, stay focused on their task, and rarely call in sick. In short, they’re model employees. For this reason, a conscientious personality is the best single predictor of an individual’s economic success in life (after their IQ score, that is). For our purposes, another important trait is openness: people who are open to new experiences and ideas are more creative on average.

But being open isn’t enough. Productive creativity is driven by people who are predisposed towards openness and conscientiousness—they not only have new ideas, but they are willing to put in the work. This combination is rare, and it partly explains why there are relatively few creative engineers (like Steve Jobs) and disciplined artists (like Michelangelo). In any case, my point here is that different people have different personalities, and that being an engineer or designer isn’t for everyone.

Les Déplorables
Kessler thinks free trade will enrich America by letting us “move up the margin chain”—offshoring “low-margin” manufacturing jobs to China will free-up Americans to work in “high-margin” design sector. They sweat, we think.

Of course, this makes perfect sense, and I have written copiously about America’s need to expand her technologically sophisticated industries. But unlike Kessler, I don’t think we can, nor do I think we should, expand them at the expense of “low margin” industries. People are not interchangeable parts, they have different intellectual abilities and personality predilections—not every factory worker can be, nor wants to be, an engineer.

In practice, this means manufacturing and design do not draw from the same labor pool, and shrinking one will not substantially grow the other. Kessler’s argument is a dud.

I cannot emphasize this enough: offshoring isn’t just a question of economics, it’s one of politics, morality, and basic human dignity. By trading with China and Mexico, free traders take the bread from their brothers’ mouths and give them nothing in return—“cheap goods” aren’t so cheap when you don’t have a job. They dispossess their fellow Americans for their own profit.

My question for Kessler: what do we do with the millions of Americans who’ve lost their jobs and cannot—through no fault of their own—simply “move up the margin chain” by becoming designers or engineers? Do we, like a new Ancien Régime, let them eat cake? It’s not only about income, it’s also about dignity. Do we engage in political iatrogenics, and merely assuage the symptoms by providing welfare or a universal basic income? Or, do we protect our industries from foreign competition, and guarantee that America remains the land of opportunity for all Americans?

I know where I stand.

Photo Credit: Spencer Platt/Getty Images

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Center for American Greatness • China • Deterrence • Donald Trump • Europe • Foreign Policy • military • Mueller-Russia Witch Hunt • Post • Russia

Pesky Russian Agent Threatens Russia with Nukes

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The long-running narrative of “collusion” between Donald Trump’s 2016 presidential campaign and Russian intelligence peddled by hack journalists and entitled former U.S. “intelligence” officials has been dealt another significant blow. Never mind the fact that absolutely no evidence linking Trump to a Russian influence operation in 2016 has been uncovered (despite nearly two years of an out-of-control special counsel investigation), President Trump last week withdrew America’s participation in the Reagan-era Intermediate-Range Nuclear Forces (INF) treaty with Russia.

In his statement explaining why the administration would pull out of the treaty, the president argued:

Russia has violated the agreement. They’ve been violating it for many years. And I don’t know why President Obama didn’t negotiate or pull out. And we’re not going to let them violate a nuclear agreement and go out and do weapons and we’re not allowed to. We’re the ones that have stayed in the agreement and we’ve honored the agreement. But, Russia, has not, unfortunately, honored the agreement. So we’re going to terminate the agreement. We’re gonna pull out.

Mind you, this announcement was made on the heels of Russian President Vladimir Putin’s claim that his country would deploy hypersonic missiles in the “coming months.” This is a type of weapon against which the United States has no defense.

The INF treaty was signed in 1987 between former President Ronald Reagan and Soviet Premier Mikhail Gorbachev. It was not meant to end the threat of nuclear war. It was intended, however, to reduce the likelihood that nuclear weapons would be used in war. The treaty did not take aim at reducing the number of the big nuclear weapons either the United States and Russia possess (what are known as strategic nuclear weapons); instead, the agreement attempted to end the development of smaller, medium-sized nuclear devices. While the strategic nuclear weapons are the things that terrify most people, the intermediate range, nonstrategic nuclear arms are the ones most likely to be used in any conflict.

Funny thing, though: for all of the praise coming from the political class over the INF treaty, Trump is correct when he says the Russians aren’t respecting the terms of the agreement.

Since former President Barack Obama’s “New START” treaty with the Russian Federation in 2011, Moscow has been allowed the capacity to modernize and expand its intermediate-range nuclear forces while the United States is not. Medium-range nuclear missiles are the most threatening to the NATO forces charged with defending Europe from a Russian invasion since such weapons would be deployed in conflict by Russia to “soften up” American and NATO lines. Think of these weapons essentially as big artillery pieces (since that’s how the Russians traditionally have viewed them).

More dangerously, the Chinese were not signatories to the INF Treaty. For that reason alone, the United States Pacific Command has been pushing to deploy intermediate-range nuclear weapons in the Asia-Pacific region. But that isn’t really possible under the INF. It doesn’t matter that the missiles would be used to deter the Chinese—the Russians view any American development of intermediate-range nukes as a threat to them. After all, the Russians recognized that they had an advantage over the United States when it came mid-range nuclear devices and they were happy to keep it.

Meanwhile, China has assiduously built up its own nuclear forces over the decades. They now have the capability to threaten American forces in the Asia-Pacific along with our allies with intermediate-range ballistic missiles (which could devastate American forces forward-deployed in the region). America is playing catch-up. Abrogating the treaty allows the United States to defend itself properly. This is especially true since, on top of their intermediate-range nuclear weapons, some analysts fear that China has quietly amassed a large nuclear weapons stockpile in a 3,000-mile tunnel known as the “underground great wall.”

Unfortunately, we live in a world where the United States must assume the worst and plan accordingly.

Moreover, the old INF treaty makes it nearly impossible for the United States to deploy even a rudimentary ballistic missile defense system on the ground in Europe (although a space-based defense would be better). Any treaty which not only hamstrings the ability of the United States to defend either itself or its allies is an unethical one to enforce today. This is doubly true, considering that the Russians have long ignored the treaty and America’s greatest rival today, China, never even signed it.

By pulling out of this treaty, Trump is putting America first—and complicating Russia’s (as well as China’s) ability to threaten the United States.

So, Robert Mueller, please explain to us exactly how Trump is a Russian agent.

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Photo Credit: TASS\TASS via Getty Images

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