Trade War vs. Real War

by Peter O’Brien
Senior Fellow 

Reporting on Sunday suggests another chemical weapon attack, in Douma, Syria. If true, this is unacceptable, as the President has made clear. What he’ll do about it remains to be seen, but what’s certain is that the use of chemical weapons is going to provoke a response from the US. And, since this administration has already shown displeasure at the Assad regime (following Assad’s use of chemical weapons on April 4, 2017, with a strike of 59 Tomahawk missiles), it’s reasonable to assume the next strike would be larger and more complex.

The point the President is making is that certain types of behavior won’t be tolerated.

That specific point is, in fact, the reason behind the tariffs directed at China: certain types of behavior won’t be tolerated.

The argument against tariffs is fairly simple: tariffs raise the price of certain goods imported from country X. Consumers then pay more for the goods, either from a local producer or from the foreign source. The local producer benefits, but consumers pay more. And there are second order economic effects in country X.

But…

One issue is simply politics; as Tip O’Neill noted, “all politics are local.” The actions of US politicians are supposed to serve the needs of the citizens of the US, not the citizens of any other country. How that’s parsed – between producers and consumers – is subject to our political debate.

Further, Congress, the President, the agencies of government, have a Constitutional – and moral – obligation to address the needs of US citizens; it’s part of the “social contract” under which they sought office, and for which they took oaths of office. They are bound to serve the citizens of the US; no one else.

There’s the argument that tariffs rarely work, and they usually cause damage to the country imposing the tariff. This is true on the whole. Nevertheless, tariffs have been regularly used to protect industries thought to be special, whether vital to national survival, or in order to protect a nascent industry, etc.

But tariffs can also be used to respond to a country engaging in unfair economic practices, such as subsidizing a certain industry, or theft of intellectual property…

Which leads to China. China has engaged in such practices for years, in protecting their own interests and in moving aggressively to acquire certain technologies or capabilities to further those interests, targeting the US economy and US technology. Thus, US aerospace firms had to share technology with China in order to expand their footprint in China. This technology then flowed into China’s aerospace and defense industries even as China expanded their military footprint in East Asia and around the world, using that expanded military to pressure its neighbors.

So, while a trade war isn’t welcome by anyone, the US and the whole world faces a rising, dictatorial China, with irredentist behavior to match; they’ve staked out claims in the South China Sea and they’re now attempting to enforce them, despite the Permanent Court of Arbitration having found against them in 2016. They’ve continued to push at their southern borders; they continue to occupy Tibet (and are now engaged in moving Chinese citizens to permanently change Tibet’s demographics); they’re staking out positions across Africa, buying large tracts of lands to grow food for the Chinese, and establishing a military footprint to serve their food security needs.

Communist China has, despite their aggressive public relations effort, grown more politically rigid and socially inflexible with each year. Now it’s flexing its muscles, with technology bought or stolen from around the world. We now find ourselves in strategic conflict with China.

Stated otherwise, our strategic goals are at cross-purposes to those of China. (The same is true of Syria. And Russia. And Iran.)

But strategic conflicts don’t necessarily lead to war. Economic and political pressure, both positive and negative, can solve a host of problems. In some cases (Syria) the selective use of other means – Tomahawk missiles perhaps – may be appropriate.

But pressure must be applied. Trade wars, and eventually embargoes, thus are not necessarily preludes to real wars. If properly executed they may, in fact, prevent a real war.

China needs to start acting responsibly or there will be far more trouble ahead. Tariffs and economic pressure are necessary preliminary steps. Hopefully, the US and China can reach a modus vivendi. If we’ve acted in time, this trade “war” may well prevent a real war.