Last week Wall Street focused on what the Trump-Xi summit would mean for the China trade war, the global economy and the Dow Jones. But the high-stakes meeting turned out to be a warm-up act. President Donald Trump’s real diplomatic flourish came as he crossed into the DMZ to shake hands with North Korea’s Kim Jong-un.
Investors are still trying to discern whether China trade talks will bear fruit after Trump’s big concession to Chinese President Xi Jinping. In addition to holding off on further tariffs, Trump said he would ease a ban on American technology sales to Chinese telecom equipment giant Huawei. Beijing appeared to give up little or nothing, and shows no sign of caving to Trump’s demands.
That raises the risk of another sudden collapse of China trade talks and a further escalation of tariffs. If that happens, both the U.S. economy and Dow Jones look vulnerable, even as the Dow hit record highs Wednesday.
But it may make sense to look at the China trade war through the prism of Trump’s push for a North Korea breakthrough. It’s a good bet that Trump-Kim DMZ meeting wouldn’t have happened if he hadn’t gotten China trade talks back on track.
Now Trump is pushing for a White House visit and reportedly wants North Korea to agree to substantially freeze nuclear weapons capabilities. As long as Trump sees Beijing as a “strategic partner” reining in North Korea’s nuclear ambitions, further escalation of the China trade war seems unlikely.
The relationship between North Korea and China is complex. But China has significant economic ties with North Korea, has often taken Pyongyang’s side against harsh international sanctions and has been seen as able to influence its behavior. International relations experts also say that Beijing has long used its role in mediating North Korea’s threat as a buffer against criticism by the West.
Trump has previously discussed China’s North Korea ties as a consideration in the U.S.-China trade dispute. While that hasn’t averted a major trade conflict, this past weekend isn’t the only time North Korea nuclear issue and China trade war have seemed to follow a parallel path.
Last December, Trump and Xi agreed to their first trade cease-fire. Then came Trump’s February summit with the North Korean leader in Hanoi. Trump walked away from that meeting, putting talks on ice. In May, China trade talks also broke down as Trump lost patience with Beijing for backtracking on commitments. On May 5, Trump threatened to escalate tariffs. Four days later, North Korea fired off short-range missiles in an implicit challenge to the U.S.
The odds of a China trade deal look pretty low, given the depth of the differences separating the two sides. The U.S. insists that China write new laws resolving complaints over theft of intellectual property, forced technology transfers, currency manipulation, access to Chinese markets and state subsidies. Even then, the U.S. wants Trump tariffs to remain in force, with some falling away as Beijing clears these benchmarks. China has refused all of these demands as humiliating and a violation of its sovereignty.
Trump may be losing hope for a huge China trade deal, but he seems to think a North Korean nuclear deal could be in reach. Trump may even see a certain logic in letting a North Korea deal come first. If Beijing really is a “strategic partner,” as Trump said in a Saturday press conference, Chinese leaders will encourage North Korea to complete a nuclear deal with him. If that happened, Trump might be more trusting of China to abide by any trade agreement, rather than keeping tariffs in place until Beijing proves it will keep its word.
A game where only one side plays by the rules is rigged. We have now locked ourselves in an embrace with a corrupt regime, and it has not been to our benefit economically or morally.
The United States and China have traded since the early days of our republic, but only recently has the scale of that trade become a political issue. More than any other point, Donald Trump’s rhetoric against outsourcing to China gave him the blue-collar Midwestern votes that made up his margin of victory in 2016. His election was a break with the generation-long bipartisan consensus that more and freer trade is better, whether the trading partner is a liberal democracy that respects the rule of law or a communist dictatorship where unfree people labor in unsafe conditions for government-suppressed wages.
Even to call trade with China “free” is a misnomer. Besides the minor tariffs still in place, there is also an uneven use of non-tariff trade barriers. Chinese goods enter our markets cheaply and freely because we agree to follow our agreements, our laws, and the rules of the World Trade Organization (WTO). Our goods, on the other hand, are subject to arbitrary restrictions by the communist government, while Chinese companies and government routinely infringe our intellectual property rights. The high hopes of free trade have been replaced with humiliation and decline.
Free trade with unfree nations smells like a conspiracy: the rich get richer by paying peanuts for production, while blue-collar workers lose their jobs and are bought off with cheap goods and more welfare. The truth is not criminal, just criminally stupid.
In classic American broad-mindedness, when our system won the Cold War, we bent over backward to befriend our former enemies. Free trade would lead to a prosperous, freer China, the thinking went. We thought that lowering our guard would turn a foe into an ally. Instead, the American worker just got sucker-punched.
One of the best examples of the perils of this uneven trade is the dispute over rare earth elements. Rare earths—a group of 17 different elements—are plentiful, but difficult to mine and environmentally hazardous to process. In recent years, rare earths have become more important, as many are used in modern electronics and military and high-tech applications.
At present, about 80 percent of the world’s production of rare earths comes from China. That undoubtedly suits China just fine, and the western companies that have outsourced industrial production there don’t have a problem with it, either. After all, if your iPhone comes from China, why shouldn’t its components?
But China’s dominance of the field has other effects. While the United States once led the world in rare earth production, we now import the vast majority of these minerals from China. The loss in mining jobs is bad enough, but the extreme concentration in the field means that China essentially controls the world’s access to a vital industrial and military resource.
Free-market conservatives confronted with a situation like this one usually laud the efficiency gained by trade and competition. They are not completely wrong: it is more efficient to have third-world workers in an unfree country mining hazardous materials. Mining is a dirty, dangerous job: why not let someone in a country with terrible environmental laws and lax workplace safety rules do it?
If rare earths were only used for toys and video games, that might be a financially acceptable albeit morally dubious answer. The military applications, though, make this a much bigger problem. Once China achieved a near-monopoly on rare earths, their position was ripe for abuse.
And, wouldn’t you know it, they abused it. Between 2009 and 2012, China drastically reduced its export of rare earths and two other important metals, tungsten and molybdenum. In a free economy, that would encourage production in sources outside of China, where the artificial scarcity Beijing imposed would make it worthwhile to produce at higher prices.
In 2012, U.S.-based Molycorp, attracted to the higher prices that resulted from the Chinese government’s efforts to boost profits by restricting REE [i.e., rare earth elements] exports, made plans to ramp up domestic REE production, investing nearly $800 million in state-of-the-art mining operations in California. At the moment when the project was poised to succeed, China flooded the market with REEs just long enough to knock Molycorp out of the market. After its Chapter 11 bankruptcy reorganization, Beijing is allowing Molycorp to continue operations in China. But once again, the U.S. has no domestic REE production.
This anti-competitive behavior in a domestic company would earn an investigation by the Federal Trade Commission (FTC). In the international economy, the American government’s options were more limited. The Obama administration, joined by Japan and the European Union, filed a complaint against China in the Dispute Settlement Body of the World Trade Organization (WTO).
America won its case, but the Molycorp mine in California was still bankrupt. In 2017, the rare-earth mining assets were sold to a consortium of buyers that includes Shenghe Resources Holding Company, a Chinese firm with ties to the PRC’s government, according to mining executives quoted in IndustryWeek. The Chinese government broke the rules of the WTO and still came out on top.
The rare earths industry is one of the more egregious instances of a non-market economy manipulating the markets, but it is far from the only one. The problem began when the free nations of the world agreed to admit China into the WTO in the first place. The WTO grew out of the General Agreement on Tariffs and Trade, a post-World War II attempt to rationalize trade and reduce barriers to it. As far as it concerned trade between developed nations recognizing the rule of law, it was a great success.
China joined the WTO in 2001. The organization’s press release from that day is full of hopes for expansion of “its rules-based system” that, in retrospect, look naive. “As a result of the negotiations,” the press release reads, “China has agreed to undertake a series of important commitments to open and liberalize its regime in order to better integrate in the world economy and offer a more predictable environment for trade and foreign investment in accordance with WTO rules.”
The specific promises are even less believable 18 years later:
China will provide non-discriminatory treatment to all WTO Members…many of the restrictions that foreign companies have at present in China will be eliminated or considerably eased after a 3-year phase-out period. In other areas, like the protection of intellectual property rights, China will implement the TRIPS (Trade-related Aspects of Intellectual Property Rights) Agreement in full from the date of accession.
Many of these changes have been made in Chinese law, but in a communist country, the law matters less than the will of those enforcing it. Intellectual property rights of foreign nations are routinely ignored, and counterfeits from China are sold around the world with the tacit acceptance of their government.
China also ignores environmental and occupational safety laws while banning independent trade unions from organizing. In a country that respects the rule of law, these things have been judged to make the marketplace more humane. They also make it more expensive to do business, but most people accept that tradeoff. China routinely ignores what laws it does have and squashes any independent source of power like trade unions or industry groups that might challenge the state to change.
China’s accession to the WTO came with the expectation that China would be a “market economy” before very long. These actions show that it has not, and has no intention of ever doing so. Even so, we continue to trade with China on unfavorable terms, a reflection of the consensus among bipartisan elites that free trade benefits everyone, with little or no tradeoffs. The rare earths dispute shows how untrue that is.
Conservatives have recently been transfixed by a dispute between Sohrab Ahmari and David French over whether the liberal democratic system will allow social conservatism to co-exist with the values of the secular left when the secular left increasingly refuses to play by liberal democracy’s rules. A similar argument needs to be had about free market competition with non-market economies that are just as lawless in their pursuit of victory. Conservatives have long fought for greater market efficiencies, but we must now ask ourselves if that goal is worth the price.
Free traders have been very pleased to divide the debate between two sides: those who want to trade with the world, and those who want to keep out all foreign goods. It is a false dichotomy between absolutes. In between, there are many who would be happy with trade, provided it were among free nations. In a system where all involved can be trusted to obey the rules, and where violations can be punished with more than a slap on the wrist, trade can improve all nations’ prosperity.
But a game where only one side plays by the rules is—and there is no other way to say this—rigged. Competition among equal parties is fair and free. If a factory in one state loses out to another, so long as no government’s thumb is on the scale, the result is just. Everyone follows the rules. May the best company, and the best workers, win.
Compare that to competition with an unfree country’s manufacturers. Is a factory in China polluting in violation of their laws? We have no way of knowing. Even if we did, there is little we can do about it when their court system serves only the will of the Chinese Communist Party.
Are their factories working cheaper because they are unsafe? Likely, but again there is no justice system that will remedy it. There are no independent unions to fight for work rules that protect people’s health, nor for increased wages like those in the developed world. China pretends to be a worker’s paradise, but in reality, it is a billion-member factory town.
This month in The Atlantic, Reihan Salam argued normalizing trade with China was a mistake from the beginning. Salam dates the problem to a year before China’s WTO accession, when Congress extended “permanent normal trade relations” (PNTR) to China, rather than annually renewing most-favored-nation status. The results were stark:
The annual battles over whether or not China merited MFN status naturally brought human rights issues to the fore, and gave voice to champions of the Tibetans and other marginalized, and sometimes brutalized, minorities. The deepening of economic ties that followed PNTR had the opposite effect—rather than draw attention to all the reasons the U.S. might want to be wary of further entanglement with China, it greatly enriched those who profited from that entanglement.
We have now locked ourselves in an embrace with a corrupt regime, and it has not been to our benefit economically or morally. The rare earths trade has been one of the worst examples of how Red China has used our openness against us, but it is far from the only one. Now, bound to a hostile nation that grows in power every day, we have outsourced so much of our economic machinery to them that business leaders are heard to say that reshoring manufacturing is “impossible.”
It is not impossible, but it requires hard work. Congress—yes, Congress—must reassess the ease with which unfree nations are granted access to American markets. The entire international trade structure of the WTO has become an unequal treaty, with the United States and the rest of the developed world on the losing end.
China is familiar with the concept. Its trade with the Western world was once starkly unfair in the other direction. More powerful nations, including the United States, forced China to sign unequal treaties beginning in the 1840s. What came next was a “century of humiliation,” followed by the isolation caused by the communists’ victory in their revolution in 1949.
Our politicians may be ignorant of history, but China’s are not. American surrender on trade could cause our own century of humiliation. To avoid it, our leaders must, at last, ask the question workers across the country have asked for 20 years: has unrestricted, one-sided, free trade with China really benefited the average American community? Has ceding control of strategic resources to the enemy made us safer as a nation? After two decades of humiliation, the answer is clear.
His flip-flops suggest that he remains troublingly clueless about the biggest geo-political peer rival and potential challenger to the United States.
Under old-school journalism, reporters would be camping in front of Joe Biden’s campaign offices asking questions on his foreign policy: whether he still thinks Qatari-funded jihadis wanted to topple Syria’s Bashar Assad, if Libya intervention under President Obama was a mistake, and the reason for the flop of Obama’s Asia Pivot. In the last few weeks, Joe Biden has shown he would say anything to be president, including first promising to cure cancer, then flip-flopping on abortion, and finally flipping on China.
American domestic politics are for Americans to decide when the election comes, but at a time Beijing is returning to Tiananmen form, no bigger issue needs further scrutiny than Biden’s China stance.
Biden recently said in Iowa that China is a “serious challenge” and threat, adding, “We are in a competition with China. We need to get tough with China. They are a serious challenge to us and in some areas a real threat.”
Funny, because in May, he mocked the China threat, saying, “China is going to eat our lunch? Come on, man…They can’t even figure out how to deal with the fact that they have this great division between the China Sea and the mountains in the east, I mean in the west.”
Biden then added that he is worried about President Trump’s tariff wars against China, which is arguably “exacerbating the challenge,” and said “if we do what we need to do here at home…we can out-compete anyone.” According to reports, Biden then said: “You bet I’m worried about China…if we keep following Trump’s path.”
While pondering the alternative way, Biden said he would force China to go green: “Biden will rally a united front of nations to hold China accountable to high environmental standards in its Belt and Road Initiative infrastructure projects so that China can’t outsource pollution to other countries.” Yes, good luck with that. It might sound plausible in a school kid’s Earth Day project, but not in the policy plans of the prospective leader of the free world.
This, is, of course, pure madness. There is no bigger potential challenge for the West, and especially for the United States, than the rise of a near peer-rival great power like China. At this very moment, Chinese government lackeys in Hong Kong are cracking down on the largest protests of 2019, where more than a million Hong Kongers are marching to stop China’s de facto takeover of Hong Kong’s justice system, which would allow any dissident to be packed off to trial in mainland China.
But that is not the biggest issue. The problem is China is a challenge unprecedented to U.S. policymakers. Chinese peacetime gross domestic product is overtaking America’s, and China is set to soon, as a percentage of relative power, eclipse all previous great power challenges that the United States has ever faced, including Imperial Spain, Imperial Germany, Nazi Germany, Imperial Japan, and even the Soviet Union.
To put it simply, the conflict of interest between the rising China and an established hegemon in the United States is inevitable. In international relations, it is known as “the Thucydides Trap“.
Consider the world of international politics like a snooker table. Unlike the domestic politics of a nation state, the international system is anarchic in nature. That is because, in domestic politics there is an established government that can decide and, if needed, enforce. The lack of hierarchy in international politics makes it anarchical, in Kenneth Waltz’s terminology, because there is no global governance, and any attempt to form a global empire would invite backlash from rival powers, while any attempt at global governance would result in a global war.
Naturally, international politics is determined by nation-states, and more importantly great powers, which are the single most important actors of world politics. And great powers rise or fall due to a variety of factors: stupid policies, ideological and military overstretch, spending more than one can afford, foolish wars and global policing, failure or decline in technological competition, juvenile or effeminate elites, and the biggest variable of all: time.
In that light, the Thucydides Trap comes in.
Throughout history, there has been one completely consistent pattern: Growing and rising powers always challenge established powers. From Athens and Sparta, to Rome and Carthage, to Napoleon, to the two World Wars, and the Cold War, this pattern remained the same. China and the United States are just the new avatars of this great game, as the actors change, but the game remains the same.
In this context, conflict does not always mean war. It could be a cold war, trade war, proxy wars, anything, but conflict between a rising and established power is inevitable. As J.J. Mearsheimer states in his book, China will try and push away the United States from Asia, just as the United States once pushed away European great powers from the Western Hemisphere.
Meanwhile, Biden is flip-flopping on this biggest challenge confronting the United States, tweeting friendship bands about how much he misses Barack Obama, and claiming there was not a hint of scandal during his eight years as vice president. For all his problems, President Trump has been forthright about the China challenge, much more than any current Democrat, or even a majority of the Republican leaders. In the future, this might be considered his legacy.
While most focus on tariffs and economics, China—with its AI research, space research, naval build-up, data and IP theft, and unfair trade practices—is a much bigger challenge than to suffer a dollar increase in the price of a beer can. There are questions already on how one should contain China, or what in itself is an intelligent containment strategy.
Some are pointing out their doubts about whether the present U.S. leadership and population is even martial enough to withstand the long-coming generational conflict. But whatever the case, to lightly rephrase an old and used proverb, you cannot choose whether to be interested in a coming Cold War, as the Cold War is already interested in you.
Biden’s callousness about identifying that and then his face-saving flip-flop is, therefore, the most troubling aspect of his candidacy. The less said about his Democratic colleagues, the better.
In a recent rally, the septuagenarian former vice president flashed his pearly set and declared, to the utter confusion of foreign policy analysts across the Euro-Atlantic, that China is no threat to the West: “China is going to eat our lunch? Come on, man.”
Beijing is the world’s second-largest economy, and increasingly isolated due to its revanchism in the Asia Pacific. It is confronting Australia, India, and Japan simultaneously, challenging the U.S. Navy and British Royal Navy every day. It’s returning to Maoist totalitarianism and Chinese civilizational exceptionalism, the leader of artificial intelligence and genetics research, with advanced space warfare capabilities and highly advanced stealth and hypersonic warfare capabilities.
China is a chronic thief of intellectual property, a great power extensively buying lands (and governments) across the world, a manufacturing giant in a trade war, and a great power engaged in espionage, cyber warfare, and naval buildup. Yet, according to the front-runner of the Democratic presidential field, it is no threat to the United States and the West.
Biden is obviously wrong about China. In fact, Biden is wrong about a lot of things. Like Johnny English, it is his job to know nothing, be wrong, and goof around. He has a glowing smile, 1950s social mannerisms, righteous rage at social justice issues to update himself for the kids, and is catastrophically wrong about every single foreign policy position possible.
Let’s start with the biggest position that would come back to haunt him as president. I was a rookie reporter covering the U.S. vice presidential candidates’ debate when I saw the difference between a quietly earnest if wonkish Paul Ryan, and a smug, condescending Biden, with a media fully disposed in the latter’s favor. It was Biden who dismissed whether Russia was a revanchist power.
While one can argue about how much Russia was a “threat” per se, no one would deny that Russia is and will be an adversarial power, and something Biden’s administration not only didn’t perceive, but when informed, dismissed mockingly.
But that is not all. Biden is stuck in time, as the world changed around him. For example, Tucker Carlson writes in his book, “Ship of Fools,” “In the fall of 2002, a total of seventy-seven senators voted in favor of the Iraq War resolution. This included the majority of Democrats, and 100 percent of the party’s rising stars. Two future presidential candidates who voted for the war, John Kerry and Hillary Clinton, also happened to be future secretaries of state. The future vice president, Joe Biden, voted for it…”
He also notes that, during Vietnam evacuation, “Senator Joe Biden of Delaware agreed; he introduced legislation to curb the arrival of Vietnamese immigrants, accusing the Ford administration of not being honest about how many refugees would be arriving.” Vietnamese immigrants, needless to say, are one of the most successful and assimilated groups in the United States, but that’s beyond the point.
The point is Biden never thought independently about what might be good or bad, but said the things the Democratic base wanted to hear. In 2002, Iraq War support was simply good politics, even though now no one talks about it.
Biden also argued for a renewed troop surge in Afghanistan, a conflict that has long transformed from a war to an imperial law and order mission, similar to what the British did in the 1890s, against Afghan rebels in North West Frontier Province. Funnily enough, when the most consequential decision of the Obama administration came, such as the raid to kill Osama Bin Laden, Biden argued against it. Obama, of course, took the advice of his generals instead.
To Biden’s credit, like a broken clock he was right about foreign policy twice. During one of the most catastrophic foreign policy decision in modern Western history, when Hillary Clinton, Samantha Power, and Susan Rice were arguing for toppling Muammar Gaddafi, which turned Libya into a slave trading hub and mass migration springboard, Biden apparently argued against it. He was also apparently overruled and then went on to fully support the Obama intervention, even when he despised Clinton, according to his aides.
Likewise, he was the first one to publicly state that there are no good Syrian rebels, because all are Qatari-funded Islamists. But then he promptly backtracked, genuflected, and apologized. He should have stuck by both, because history could have proved his caution and restraint right. But he did not.
The problem for Biden is much more than that. He reminds me of the grandmother in “Good bye, Lenin!” who fell in coma during the Soviet years, only to wake up after the fall of the Berlin Wall in a unified Germany, yet her grandson must continue an elaborate hoax to assure her that she is still in communist Germany, so she doesn’t have another shock and suffer a stroke.
Biden, likewise, is also stuck in the heady days of early 1990s triumphalism, with an expanding North Atlantic Trade Organization, an European Union that is a prospective trade ally, and the world fit for liberal interventionism and democracy, with a hope that China would eventually be entrenched as a pillar in the liberal order.
Unfortunately, none of that came true, and China is pretty much the biggest rising great-power rival challenge to an established superpower, compared to the history of rising-power challenges, from Sparta to Athens, Carthage to Rome, the Spaniards, Napoleon and Germans twice, to the Brits. There’s an academic consensus about it, and Uncle Joe is wrong once again.
Most importantly, however, he is opposed to his own base. Recent studies suggest, that Americans overwhelmingly, distinctly support a restrained foreign policy and less liberal interventionism and democracy promotion abroad, this stance is even stronger among the Democratic base.
The findings in this survey suggest that American voters are not isolationist. Rather, voters are more accurately described as supporting ‘restrained engagement’ in international affairs—a strategy that favours diplomatic, political, and economic actions over military action when advancing U.S. interests in the world. American voters want their political leaders to make more public investments in the American people in order to compete in the world and to strike the right balance abroad after more than a decade of what they see as military overextension.
Guess who won an election promising just that?
It is a mystery that President Trump cannot transform his foreign policy instincts into electoral support, but one can blame Trump’s poor PR, lack of strict message discipline, and continuous mainstream media opposition for that. The fact remains, however, that Trump is more attuned to a non-interventionist America than his prospective rival Biden.
It is still too early to say what would happen. The primaries and the debates haven’t started yet. While one can be sympathetic to an affable grand-fatherly figure, one should be careful about someone who has repeatedly, to use a liberal catch-phrase, been on the “wrong side of history.”
By Bill Gertz • Washington Free Beacon
China is building a long-range cruise missile fired from a shipping container that could turn Beijing’s large fleet of freighters into potential warships and commercial ports into future missile bases.
The new missile is in flight testing and is a land-attack variant of an advanced anti-ship missile called the YJ-18C, according to American defense officials.
The missile will be deployed in launchers that appear from the outside to be standard international shipping containers used throughout the world for moving millions of tons of goods, often on the deck of large freighters.
The YJ-18C is China’s version of the Club-K cruise missile built by Russia that also uses a launcher disguised as a shipping container. Israel also is working on a container-launched missile called the Lora.
Spokesmen for the Defense Intelligence Agency and Navy declined to comment.
The long overdue actions taken by the European Parliament on September 12, 2018, and by the United States Senate through Resolution 30 of January 25, 2019, authored by Senators Feinstein, Durbin and Murphy, condemn in no uncertain terms the Viktor Orban led government’s dismantling of Hungary’s fledgling democracy. Based on the Sargentini Report, the European Union charged the Hungarian government with political as well as economic and financial corruption. Pursuant to this Report, since 2010, Hungary has increasingly become a rogue state. Actually, Hungary has been taken over by political gangsters, headed by the Prime Minister, Viktor Orban, who have shamelessly robbed the Hungarian people blind. Democracy has been replaced by “illiberal democracy”, meaning the personal cult of Viktor Orban. The Alliance of Young Democrats (Hungarian acronyms: FIDESZ) dominated Parliament passed a new constitution which was already amended seven times to accommodate the changing needs of the Prime Minister and his accomplices. This new constitution has curtailed the independence of the judiciary, has made a mockery of the freedom of expression, the freedom of religion, the freedom of association, the right of equal treatment, the right of minorities, and has practically abolished the main economic and social rights. Continue reading
By Bill Gertz • Washington Free Beacon
Chinese military forces have deployed multiple units armed with anti-satellite (ASAT) missiles that can destroy scores of American satellites, according to a Pentagon intelligence report.
The new report by the National Air and Space Intelligence Center, known as NASIC, revealed that People’s Liberation Army units have begun training with the satellite-killing missiles.
The report warns that China, along with Russia, has developed an array of space arms designed to challenge U.S. space superiority. The report was made public last month.
The report for first time reveals that Chinese military units already are conducting training for space attacks with anti-satellites missiles. Russia also is developing a new anti-satellite missile the report said. Continue reading
A week and half after President Trump and Chinese President Xi Jinping met to smooth over trade disputes, China announced it will buy more foreign goods , including U.S. soybeans. At the same time, it vowed to completely retool its “Made In China 2025” program, intended to make China the world’s most powerful economy. Nice gestures, but whether China follows through is a big question.
Reuters reports that Chinese state-owned firms snapped up more than half a million tons of U.S. soybeans on Wednesday to show they mean business. But the Made In China 2025 reversal, if sincere, is even more significant. It would mark a major shift in China’s guiding economic philosophy, a strange melding of top-down communist political control with free-market tenets.
“The revised plan would play down China’s bid to dominate manufacturing and be more open to participation by foreign companies,” The Wall Street Journal reported, citing “people briefed on the matter” as the source. Continue reading
Later this week, President Trump and Chinese President Xi Jinping are expected to convene for discussions on a variety of contentious economic matters. While previous talks on tariffs, intellectual property theft, and cyber security have been disappointing, Saturday’s meeting in Buenos Aires presents a clear opportunity for breakthroughs.
Although much of trade negotiations are fraught with roadblocks and challenges, the issues of international shipping through the Universal Postal Union are far more straightforward. As the Trump Administration has pointed out, American enterprises and small businesses have suffered from an obvious one-side imbalance due to the UPU pricing treaty. The majorly reduced rates from the U.S. Postal Service have allowed businesses from China to drastically undercut U.S. companies on shipping costs.
In October, Frontiers of Freedom president George Landrith praised President Trump’s decision to withdraw the U.S. from the UPU, adding, “Chinese businesses should pay the reasonable price of their shipping. It is not right that the American taxpayer and postal rate payers have been forced to subsidize them.”
The current below-cost international rates have added to the Postal Service’s beleaguered financial position, producing losses of $410 million since 2015. Thankfully, the administration is now poised to adopt pricing changes that are financial sustainable while also creating a level playing field for domestic shippers.
By Peter Roff • RealClearPolitics
The relationship with Kuwait should be one of the United States’ strongest, but it is starting to fray. There’s still time to set it right, and the Kuwaiti Emir’s visit to Washington last week was a good start. Meanwhile, however, investors remain on edge, as they have been ever since officials in this Gulf state froze millions of dollars in American and international assets without any clear explanation.
Candidly, there’s a lot going on in Kuwait that’s suspect. The regime seems to be cozying up to Iran and China, officials have made remarks about Israel that are just short of incendiary, and corruption surrounding the delivery of supplies to U.S. troops stationed there has been highly disruptive. Americans, it seems to me, have the right to expect better from those whom they saved by leading an international intervention after their country was invaded by Saddam Hussein.
It seems instead that much has changed since President Donald Trump hosted Sheikh Sabah Al-Ahmad Al-Sabah last year and hailed the countries’ bilateral relationship, calling it as strong as it had ever been. Indeed, the country continues to be a key regional security partner with 20,000 U.S. troops stationed there.
Recently though, officials in the Kuwaiti government seem to have gone to great lengths to offend America’s allies and get close to our adversaries. Their outspoken defense of the Palestinians inside the U.N. Security Council has undermined the White House’s effort to make peace and has caused problems for Israel. The United States was even forced to veto a Kuwaiti-drafted resolution calling for the protection of Palestinians in the West Bank and Gaza. Continue reading
by Stephen Moore • Investor’s Business Daily
Is it possible that Donald Trump is winning on trade?
Last week, Trump apparently delivered two underappreciated victories as a result of his threat of stiff tariffs and renegotiated trade deals.
First, Seoul has agreed to reduce long-standing non-tariff trade barriers that have reduced American exports to Korea. Though the details are still sketchy, the Koreans have agreed to buy more Ford and General Motors Co. cars and trucks and other U.S.-made products. This can only be good news for American workers. The Koreans have also agreed to increase reimbursement rates to American drug and vaccine producers.
Even The New York Times grudgingly conceded that the deal “represents the type of one-on-one agreement that Mr. Trump says makes the best sense for American companies and workers.”
Also in recent days, China appeared to stand down in response to Trump’s jarring announcement of a record $50 billion of tariffs on Chinese products. Premier Li Keqiang pledged to improve American companies’ access to Chinese markets. He also said in a news conference that China would treat foreign and domestic firms equally. And what’s more, Beijing has promised that it would stop forcing foreign firms to transfer technology to China and would strengthen intellectual property rights enforcement. That was a smart and encouraging response. Continue reading
by Bill Gertz • Washington Free Beacon
China’s Communist Party recently authorized an aggressive program of stealing U.S. science and technology information by recruiting Americans in the tech sector with access to trade secrets, according to an internal Party directive.
The directive outlines a secret program authorized by the general office of the Communist Party of China (CCP) Central Committee of stepped up technology collection beginning in late 2016 and carried out by an intelligence unit called the United Front Work Department.
The document is an approval order from the Central Committee for a “working plan on strengthening the intensity of United Front Work in the area of science and technology of the United States in 2017.”
“The united front work targeted on the areas of science and technology of the United States is an important measure of our party to deeply divide western hostile forces, to maintain social stability, to ensure national security, to comprehensively advance the rapid development of our own science and technology and economy, to accelerate the construction of national defense modernization, and to consolidate the overseas united front,” the document states. Continue reading
by Bill Gertz • Washington Free Beacon
The United States faces a growing threat of ballistic and cruise missiles from China, Russia, Iran, and North Korea, according to a military intelligence report.
“Ballistic and cruise missiles present a significant threat to U.S. and allied forces overseas, and to the United States and its territories,” states the latest report by the National Air and Space Intelligence Center in Ohio.
The report warns that both China and Russia are expanding their force of strategic nuclear missiles with new multi-warhead weapons.
North Korea now has three intercontinental-range missiles and is moving ahead with a submarine-launched ballistic missile. Continue reading
A Chinese company, Ant Financial, largely owned by the government of China, is intent on taking over MoneyGram, a leading US-based financial payments company. This planned acquisition raises serious questions as to whether ownership of MoneyGram would be part of China’s strategic plan to obtain sensitive personal and financial information of Americans and westerners worldwide as well as to undermine American economic strength. This acquisition should be stopped for that reason.
The Committee on Foreign Investment in the United States (CFIUS) exists to review the national security implications of foreign investments in US companies. CFIUS is comprised of representatives from a number of US agencies or departments — including the Departments of Defense, Homeland Security, State and Commerce. CFIUS can block foreign sales and investments that would result in a foreign power acquiring assets and intellectual property that would harm America’s national security.
There are a number of important national security and strategic reasons that CFIUS should reject Ant Financial’s proposed takeover of MoneyGram. Continue reading
by Morgan Chalfant • Daily Caller
The U.S. Army’s ground combat systems risk being surpassed by those being developed by foreign countries such as Russia and China, according to a new report from the nonpartisan Congressional Research Service.
The Army is currently using main battle tanks, tracked infantry fighting vehicles, tracked self-propelled artillery, and multiple launch rocket systems developed during the Soviet era. Billion-dollar plans to modernize the force’s ground combat systems have been cancelled over the last decade.
Meanwhile, potential adversaries have prioritized funding new weapons systems and technologies for their forces, raising concerns among American experts about the shrinking capability gap between the United States and other nations. Continue reading