The United States of America has, without much fanfare, slipped into a version of a New Cold War with China, with the war between Russia and Ukraine serving as a “hot” proxy battle between the two. You probably don’t think of me as a foreign policy writer, and neither do I. But once upon a time I wrote a book about the
I've always felt that in the case of U.S. and China, large amounts of trade between the two countries helps keep the peace, by making it very economically costly for one country to start a war that would cause the other to cut off trade with them. The current trend of trying to unwind U.S./China trade seems to be moving things in the wrong direction.
The national defense argument for tariffs comes in two versions:
1) risk that in an armed conflict, China could cut off supplies of key items and components either by China not exporting them or interdicting their export from regional countries
2) risk that general low level of manufacturing capacity would weaken war-making capacity
For the first, narrowly targeted tariffs or even bans on imports from China/China-interdictable countries -- but not from other countries -- makes sense. This might include EV drones, but not EV's in general
For the second production subsidies are more efficient. A tariff is a combination of a subsidy to domestic sales financed by an excise tax on consumption of the item. This creates two inefficiencies.
a) it creates a relative disincentive to export, especially harmful if economies of scale are important. And we can create a larger manufacturing base if some of its sales are for export than solely for domestic use.
b) an excise on one item is less efficient (greater deadweight loss) than a broad-based tax that does not distort consumption between the promoted item and others.
Part of this promotion of manufacturing in general should also come in the form of reversing net capital inflow that overvalue the dollar and makes imports of manufactures cheaper and exports of manufactures more expensive. This in turn will require an increased national savings, mainly through changes in the tax structure (taxation of consumption rather than income) and level of collections to reduce growth-inhibiting fiscal deficits. [I have not checked the numbers but my impressionist that the US had a net capital outflow and export surplus during the build-up to WW2.
A further implication of substituting production subsidies for tariffs is to reduce import barriers to manufactured goods and their inputs at least from non-hostile countries.
The same tax and production subsidy approach to rebuilding US manufacturing as the "arsenal of democracy" applies to industrial policy in any items for which we are confident that politicians can better identify long term comparative advantage then private firms.
These are not novel concepts. They are covered in standard trade theory and international development courses. [At least they were back in the '60's when I was taking them.] I know we are not living in a neoliberal paradise in which politics is kept focused on redistribution, but if national preparedness for possible conflict with China is important then it is important to employ the most efficient measures to promote them.
I really like this topic, but glancing through the comments, the discussion goes off on some very odd tangents.
Here are a few things I think are true:
1) The US has superior technology and inferior defense industrial capacity. China has inferior technology and superior defense industrial capacity.
2) Much like the Old Cold War, winning the New Cold War will require choking our adversaries' economies by ratcheting up defense spending whilst leveraging the value multiplier of rule of law/free markets.
3) In retrospect, it was profound arrogance that in the 90s we thought history had ended. History never ends; it repeats itself. The "peace dividend" was us squandering our windfall.
4) Politics makes for strange bedfellows -- just like we did during the Bad Old Days, we're going to have to take the position that the leader of XYZ Country "is a son of a bitch, but damn it, he's OUR son of a bitch."
Can someone explain the Canadian softwood lumber thing? I understand that it's happening, and it has something to do with stumping fees/subsidies and being a giveaway to Canadian lumber companies, but does anyone understand it more granularly than that?
Is the case for it simply "Canada is making it artificially cheap to produce softwood lumber and could thus drive American companies out of business via unfair competition?" By simply, I mean "if Canada removed their subsidies, would we drop the trade restrictions? Would that make it impossible for Canadian softwood producers to compete? Or is there just a surprisingly powerful domestic US timber lobby that can overcome the (quite obvious) impact on construction costs? When I asked ChatGPT about the largest softwood producing states, the only arguably swing-y ones are Georgia and North Carolina.
>is there just a surprisingly powerful domestic US timber lobby
Yes, the smaller rural northern states. This is a great example of how America's bias towards small and rural states leads to bad policy. Logging isn't a huge employer anywhere, but representatives from Maine, New Hampshire, Michigan, Minnesota etc. don't want the job losses in their districts. The last two are at least good-sized states, but remember that Maine and NH and Vermont each have 2 Senators. Plus NH is kind of a swing state
There can be something approximating free trade between Kansas and Oklahoma.
There can never be anything approximating free trade between US and China. "Free" trade in practice mean the US adopts the opposite industrial policy of China.
Whereas China through industrial policy effectively imposes huge taxes on its domestic consumers to subsidize its manufacturing and real estate construction, the US in pursuing "free trade" with China commits itself to massive subsidies of domestic consumption and finance at the expense of its own manufacturing base
Despite continuing neoliberal defenses of this arrangement, the country is getting tired of this and it's effects. Pols in both parties sense it. The country is moving on even if the "free trade" theorists won't..
This isn't really true, though. At this point with "free trade" where it is, going backwards would be highly inflationary. And look how pissed everyone is about inflation. Essentially, we have realized many problems associated with where we ended up with free trade. On the other hand, nobody is going to be willing to go backwards once they start to see the consequences.
The inflation argument is just tendentious. It's not inflation to tax something with a negative externality...and offshoring/outsourcing our productive capacity clearly has such externalities ( you could argue that point if you wanted but you'd lose that argument)
Free trade was a post WW2 arrangement explicitly adopted to help Germany and Japan (and the rest of the free world) reindustrialize...to keep them out of Soviet orbit. Same analogous vague logic applied to China post 1989--"free" trade to make them more Western and democratic.
It's long past time for a shift in political economy and that shift is in the offing whether neolibs like it or not.
I can't tell if you are just being intentionally obtuse or if I was unclear. Taxing things with negative externalities is, in fact, raising their prices to discourage their occurrence. Rising prices is inflation. In the case of returning manufacturing to the us, if U.S. manufacturers could compete at current prices then they would be in the market and selling tools, household appliances, toys..... The only way to return those jobs to the U.S. is to raise the prices on all of the manufactured goods in question. This is what tariffs do. That is by very definition inflation. To what extent it would affect the CPI or PCI is secondary.
So, if you don't want to call it inflation then just ask yourself, how much will people enjoy the price of all manufactured items rising rapidly in the short term and then less rapidly (but more than they would have previously) for the foreseeable future.
Edit[I am not saying that I disagree with the idea of reshoring more manufacturing. Just in how quickly it can be done and the amount of (dis)enthusiasm it is likely to generate.]
Rising prices of some things due to tariffs or taxes is not inflation. That's just a conceptual error. Inflation is where the general price level rises because of a declining value in the currency. I don't want to call it inflation because it is not, in fact, inflation.
Like any tax, there is no easy way to predict in advance who pays the tax (it would surely depend on the industry) or indeed whether people can substitute into other purchases that avoid the tax entirely--which is of course the point. But that's just a very short term calculus. Over time, if the overall political/economic climate favors domestic production, then we'd expect much more robust capital spending here in US and much shorter supply chains to follow that lower most consumer prices rather than rise them--of course factoring in higher American wages and thus higher purchasing power. Labor after all is not a huge input in modern capital heavy manufacutring.
That's how I see it. We don't have a "free trade" relationship with China. If we had, it would have been impossible for them to run such persistent surpluses with us
One question I have: are we preparing to fight the wrong war? Yes, a large manufacturing base is how the US won WW2, but it's not how the US won the Cold War. They did that through long term economic growth which the Soviets could not keep up with. That would point to policies like building more housing, expanding immigration, reforming permitting, deregulation, probably infrastructure investment. So do you need a giant manufacturing base if you've got nuclear weapons ready to carpet nuke the Pearl River Delta (yikes)? Or is the thought that Chinese expansion will be so slow that no one would ever start a nuclear war over it?
I think one big difference is that China has shown itself to be decent at economic growth. The Soviet Union was not. Their exports were garbage. China's exports are not. This is in addition to the huge population advantage China still has - a "sleeping giant" but also an "aging giant"
So our strategy to outlast China is to have extremely effective deterrence for the next generation, maybe two, until their population pyramid is a total disaster for them.
The Democratic Party has nurtured a deep hatred of the United States and the West among its young people for an entire generation. Now it expects them to agree to fight and perhaps die so that the United States and the West can live? This sounds almost unrealistic.
Umm, it isn't the hippies that are unpatriotic and spitting in the face of returning veterans anymore. It is the MAGA right. With their upside down flags and secession ideas, they have lost all claim to patriotism.
"The Democratic Party has nurtured a deep hatred of the United States and the West"
Add "the extreme lefty fringe" in front of "the Democratic Party," and you might have more of a case. Mainstream Democrats like Biden are always like, "We are Americans! There's nothing we can't do if we work together!" One of the standard Democratic points on immigration is, "See, we're such an awesome country, people WANT to come here, this is a good thing."
There isn't an exact breakdown here, but it's clear from the survey that the small Democratic majority still willing to fight for America is currently at an age that requires a wheelchair or at least crutches.
If the choices are die fighting vs surrender and survive, it would have to be a really extreme case for me to choose die fighting.
But if the choice is fight and have a 50% chance of dying while helping raise the chances of a good outcome for others, vs surrender and have a 20% chance of dying while reducing the chances of a good outcome for others, fighting looks more plausible. Maybe a lot of people are subconsciously hearing the question that way, but it certainly seems phrased in a way that biases towards surrendering, particularly for highly educated people who are more likely to read the question literally.
Basically, if China was a much larger Singapore everything would be fine. The CCP would still get to be Authoritarian but they'd be much more aligned with the West and wouldn't export their illiberal tendencies outside of their borders making for a safer and more prosperous world.
As a matter of phrasing, I don't like this paradigm. Anyone who remembers the old Axis is (at least) in their 80s now. For Gen Y, there's the unfortunate association of the word with GWB and the "Axis of Evil." And the "Allies" in this iteration are not so allied. We have trade links and (mostly) share NATO membership, but the fight does not yet feel existential. For better or for worse, in the 50s and 60s, people were genuinely terrified of communism. There is no sense of that, now. What does the average person's mind turn to when asked about China? Chinese takeout, TikTok, and cheap (both in cost and construction) consumer goods.
The piece is premised on the idea that the US and its allies must have the ability to fight a China-Russia-Iran-etc. axis militarily, but doesn’t make clear why this is the goal. Obviously there is risk of war over Taiwan and we have to take that seriously. But China is so different from the USSR in that it doesn’t have the same expansionist goals.
- If the objective is to limit China’s support for Russia’s expansionist goals, then driving an economic wedge between the US and China is counterproductive.
- If the objective is just to prepare for a war over Taiwan, then we have to seriously think about prioritizing military capability versus reducing the stakes of Taiwan to the US. The latter requires expanding the CHIPs Act efforts to focus intensely on working with Japan and South Korea — the other countries with semiconductor expertise — to increase non-China semiconductor capacity.
Regardless, increasing the economic manufacturing capacity of our allies is a nearly no-downside policy. What’s missing from the piece is a focus on Latin America. The economic disincentives for onshoring heavy manufacturing in the US are too great to be overcome. But we could do much more to support that capacity in Latin America. This is where Trump/MAGA policies are incoherent.
Is that right? It seems to me that the pie chart at least makes it easier to see when a group of adjacent wedges add up to more than another group of adjacent wedges, while bar charts don’t. There are probably a lot of things I’m not currently thinking of for which bar charts are more useful, but if you want to measure two alliances, the pie chart has some real advantages.
I absolutely agree with the four signs diagnosing when a pie chart has gone wrong! But the article makes the claim that literally *every* pie chart would be better as a bar chart, and I don't think it established that. If you aren't showing any really small wedges, and you want to see things as fractions of a whole, and possibly see the relative sizes of a few different overlapping combinations, they have some advantages.
I agree with the basic set of goals that you’re arguing with here (alliance system good, manufacturing capacity within alliance system good, trade and labor migration within alliance system good), but I also think that you’re probably overrating how dangerous the US’s geopolitical rivals are. Russia has been struggling against a chronically dysfunctional basket case state with no real air power, China is teetering on the brink of demographic collapse and resorting to an unsustainable bailout to save its tanking property sector, Iran can’t even get a single drone or missile to Israel, and North Korea is… well, North Korea.
I think you're the one really underrating China. You can point out that China has weaknesses and crises. This is hardly surprising. You could make a list of other structural, long-term weaknesses in the US (political dysfunction, vetocracy, housing crisis, inability to build infrastructure, so on). But that can't waive the reality that China's industrial capacity is staggering, its military buildup is massive, and thanks to the gender imbalance losing young men in war is basically the *opposite* of a problem.
Things like the demographic crisis and the incentives for Chinese policymakers to cover over economic weakness with unsustainable policy is the kind of thing that will create compounding problems over the course of decades, and the war over Taiwan will happen in less than two.
Youre so right, acknowledging the easily observable reality that China's navy adds ships in a tiny fraction of the time the US does is basically the same as Chinese propaganda.
"Russia has been struggling against a chronically dysfunctional basket case state with no real air power"
Yes, this is why I roll my eyes at Noah Smith's "The Russkies will be in Warsaw within a week if Ukraine falls!!!1!1!one" schtick. I'm happy to keep supporting Ukraine's defense indefinitely as long as Putin wants to keep shoving Russian forces into a meatgrinder, but people need to have a grip on reality -- the Ukrainians are still destroying Russian tanks faster than the Russians are building new ones and Russia is not going to be able to successfully launch a major offensive with rehabbed T-62s and T-55s against even just the European-component of NATO airpower. That's a recipe for Miracle on the Vistula, Part 2: Too Polish, Too Furious.
I'm far less sanguine about the Russian war than you are but "Miracle on the Vistula, Part 2: Too Polish, Too Furious" is brilliant, well done good sir.
Thank you, although I really wanted to come up with a word that would alliterate with "Polish" instead of just reusing "Furious," but couldn't immediately come up with a synonym for "Furious" that starts with a "P."
It is very very hard to mount a successful offensive against enemies who can easily blow you up from the sky. (Which, along with “move shipping containers full of stuff from point A to point B” is one of the NATO alliance’s core military competencies)
To flesh this out a little more, when we talk about the "new Axis," the two biggest players are China and Russia. Then there are lesser members, such as Iran, North Korea and Venezuela. Here's what bring them together.
1. They want territorial adjustments.
Russia wants to dominate and ultimately annex Ukraine, Belarus and Moldova.
China wants to absorb Taiwan and dominate the South China Sea
Venezuela wants to conquer oil-rich Guyana
North Korea wants to conquer South Korea
Iran wants its proxies to rule different countries in the Middle East
2. China and Russia want to move away from a system of multi-lateral organizations to a system of bilateral relations.
Multi-lateral organizations like NATO, the European Union, the WTO, etc empower small countries. If Russia is negotiating a trade agreement with a small country like Estonia, Russia can squeeze them because they are much larger and more powerful. However, if Russia negotiates a trade agreement with the European Union, then it doesn't have the same kind of leverage.
What Russia and China want is to undermine these multi-lateral organizations so that they can be the drivers in their "spheres of influence."
Unfortunately one of the few ideological underpinnings of the MAGA movement is to embrace this view of the world. They believe that the United States should leverage its enormous size and wealth to negotiate economic, trade and security deals with other countries that are overwhelmingly skewed in America's favor.
While there is a place for this (for example, NATO countries should increase their defense budgets), if taken too far then you create a world that's much poorer and the risk of war much higher. Just look at Europe. The European Union has its flaws, but ultimately rich countries like Germany, France, Sweden and the BENELUX countries have left a lot of money on the table to facilitate the development of once impoverished countries like Poland, Hungary and the Baltic States. Those peripheral countries are much richer, and the risk of war between these countries is small.
On the other hand, the post-Soviet states not in the European Union are all squeezed by Russia. These countries are unstable, poor and have the threat of war looming over them.
I've always felt that in the case of U.S. and China, large amounts of trade between the two countries helps keep the peace, by making it very economically costly for one country to start a war that would cause the other to cut off trade with them. The current trend of trying to unwind U.S./China trade seems to be moving things in the wrong direction.
How about a list of the areas where (like sugar) we could reduce trade barriers?
The national defense argument for tariffs comes in two versions:
1) risk that in an armed conflict, China could cut off supplies of key items and components either by China not exporting them or interdicting their export from regional countries
2) risk that general low level of manufacturing capacity would weaken war-making capacity
For the first, narrowly targeted tariffs or even bans on imports from China/China-interdictable countries -- but not from other countries -- makes sense. This might include EV drones, but not EV's in general
For the second production subsidies are more efficient. A tariff is a combination of a subsidy to domestic sales financed by an excise tax on consumption of the item. This creates two inefficiencies.
a) it creates a relative disincentive to export, especially harmful if economies of scale are important. And we can create a larger manufacturing base if some of its sales are for export than solely for domestic use.
b) an excise on one item is less efficient (greater deadweight loss) than a broad-based tax that does not distort consumption between the promoted item and others.
Part of this promotion of manufacturing in general should also come in the form of reversing net capital inflow that overvalue the dollar and makes imports of manufactures cheaper and exports of manufactures more expensive. This in turn will require an increased national savings, mainly through changes in the tax structure (taxation of consumption rather than income) and level of collections to reduce growth-inhibiting fiscal deficits. [I have not checked the numbers but my impressionist that the US had a net capital outflow and export surplus during the build-up to WW2.
A further implication of substituting production subsidies for tariffs is to reduce import barriers to manufactured goods and their inputs at least from non-hostile countries.
The same tax and production subsidy approach to rebuilding US manufacturing as the "arsenal of democracy" applies to industrial policy in any items for which we are confident that politicians can better identify long term comparative advantage then private firms.
These are not novel concepts. They are covered in standard trade theory and international development courses. [At least they were back in the '60's when I was taking them.] I know we are not living in a neoliberal paradise in which politics is kept focused on redistribution, but if national preparedness for possible conflict with China is important then it is important to employ the most efficient measures to promote them.
I really like this topic, but glancing through the comments, the discussion goes off on some very odd tangents.
Here are a few things I think are true:
1) The US has superior technology and inferior defense industrial capacity. China has inferior technology and superior defense industrial capacity.
2) Much like the Old Cold War, winning the New Cold War will require choking our adversaries' economies by ratcheting up defense spending whilst leveraging the value multiplier of rule of law/free markets.
3) In retrospect, it was profound arrogance that in the 90s we thought history had ended. History never ends; it repeats itself. The "peace dividend" was us squandering our windfall.
4) Politics makes for strange bedfellows -- just like we did during the Bad Old Days, we're going to have to take the position that the leader of XYZ Country "is a son of a bitch, but damn it, he's OUR son of a bitch."
A minor thing--footnote 2 -- capital purchase has no (or limited) impact on the income statement, not balance sheet for a conventional organization.
Can someone explain the Canadian softwood lumber thing? I understand that it's happening, and it has something to do with stumping fees/subsidies and being a giveaway to Canadian lumber companies, but does anyone understand it more granularly than that?
Is the case for it simply "Canada is making it artificially cheap to produce softwood lumber and could thus drive American companies out of business via unfair competition?" By simply, I mean "if Canada removed their subsidies, would we drop the trade restrictions? Would that make it impossible for Canadian softwood producers to compete? Or is there just a surprisingly powerful domestic US timber lobby that can overcome the (quite obvious) impact on construction costs? When I asked ChatGPT about the largest softwood producing states, the only arguably swing-y ones are Georgia and North Carolina.
>is there just a surprisingly powerful domestic US timber lobby
Yes, the smaller rural northern states. This is a great example of how America's bias towards small and rural states leads to bad policy. Logging isn't a huge employer anywhere, but representatives from Maine, New Hampshire, Michigan, Minnesota etc. don't want the job losses in their districts. The last two are at least good-sized states, but remember that Maine and NH and Vermont each have 2 Senators. Plus NH is kind of a swing state
There can be something approximating free trade between Kansas and Oklahoma.
There can never be anything approximating free trade between US and China. "Free" trade in practice mean the US adopts the opposite industrial policy of China.
Whereas China through industrial policy effectively imposes huge taxes on its domestic consumers to subsidize its manufacturing and real estate construction, the US in pursuing "free trade" with China commits itself to massive subsidies of domestic consumption and finance at the expense of its own manufacturing base
Despite continuing neoliberal defenses of this arrangement, the country is getting tired of this and it's effects. Pols in both parties sense it. The country is moving on even if the "free trade" theorists won't..
This isn't really true, though. At this point with "free trade" where it is, going backwards would be highly inflationary. And look how pissed everyone is about inflation. Essentially, we have realized many problems associated with where we ended up with free trade. On the other hand, nobody is going to be willing to go backwards once they start to see the consequences.
The inflation argument is just tendentious. It's not inflation to tax something with a negative externality...and offshoring/outsourcing our productive capacity clearly has such externalities ( you could argue that point if you wanted but you'd lose that argument)
Free trade was a post WW2 arrangement explicitly adopted to help Germany and Japan (and the rest of the free world) reindustrialize...to keep them out of Soviet orbit. Same analogous vague logic applied to China post 1989--"free" trade to make them more Western and democratic.
It's long past time for a shift in political economy and that shift is in the offing whether neolibs like it or not.
I can't tell if you are just being intentionally obtuse or if I was unclear. Taxing things with negative externalities is, in fact, raising their prices to discourage their occurrence. Rising prices is inflation. In the case of returning manufacturing to the us, if U.S. manufacturers could compete at current prices then they would be in the market and selling tools, household appliances, toys..... The only way to return those jobs to the U.S. is to raise the prices on all of the manufactured goods in question. This is what tariffs do. That is by very definition inflation. To what extent it would affect the CPI or PCI is secondary.
So, if you don't want to call it inflation then just ask yourself, how much will people enjoy the price of all manufactured items rising rapidly in the short term and then less rapidly (but more than they would have previously) for the foreseeable future.
Edit[I am not saying that I disagree with the idea of reshoring more manufacturing. Just in how quickly it can be done and the amount of (dis)enthusiasm it is likely to generate.]
Rising prices of some things due to tariffs or taxes is not inflation. That's just a conceptual error. Inflation is where the general price level rises because of a declining value in the currency. I don't want to call it inflation because it is not, in fact, inflation.
Like any tax, there is no easy way to predict in advance who pays the tax (it would surely depend on the industry) or indeed whether people can substitute into other purchases that avoid the tax entirely--which is of course the point. But that's just a very short term calculus. Over time, if the overall political/economic climate favors domestic production, then we'd expect much more robust capital spending here in US and much shorter supply chains to follow that lower most consumer prices rather than rise them--of course factoring in higher American wages and thus higher purchasing power. Labor after all is not a huge input in modern capital heavy manufacutring.
That's how I see it. We don't have a "free trade" relationship with China. If we had, it would have been impossible for them to run such persistent surpluses with us
One question I have: are we preparing to fight the wrong war? Yes, a large manufacturing base is how the US won WW2, but it's not how the US won the Cold War. They did that through long term economic growth which the Soviets could not keep up with. That would point to policies like building more housing, expanding immigration, reforming permitting, deregulation, probably infrastructure investment. So do you need a giant manufacturing base if you've got nuclear weapons ready to carpet nuke the Pearl River Delta (yikes)? Or is the thought that Chinese expansion will be so slow that no one would ever start a nuclear war over it?
I think one big difference is that China has shown itself to be decent at economic growth. The Soviet Union was not. Their exports were garbage. China's exports are not. This is in addition to the huge population advantage China still has - a "sleeping giant" but also an "aging giant"
So our strategy to outlast China is to have extremely effective deterrence for the next generation, maybe two, until their population pyramid is a total disaster for them.
Bravo!
The Democratic Party has nurtured a deep hatred of the United States and the West among its young people for an entire generation. Now it expects them to agree to fight and perhaps die so that the United States and the West can live? This sounds almost unrealistic.
Umm, it isn't the hippies that are unpatriotic and spitting in the face of returning veterans anymore. It is the MAGA right. With their upside down flags and secession ideas, they have lost all claim to patriotism.
"The Democratic Party has nurtured a deep hatred of the United States and the West"
Add "the extreme lefty fringe" in front of "the Democratic Party," and you might have more of a case. Mainstream Democrats like Biden are always like, "We are Americans! There's nothing we can't do if we work together!" One of the standard Democratic points on immigration is, "See, we're such an awesome country, people WANT to come here, this is a good thing."
This is such an extreme statement. Do you live in the United States? People have apathy and cynicism. Few have a "deep hatred"
There isn't an exact breakdown here, but it's clear from the survey that the small Democratic majority still willing to fight for America is currently at an age that requires a wheelchair or at least crutches.
There are lots of great reasons to not want to die that don't require you to hate your country.
https://www.dailymail.co.uk/news/article-12589297/amp/Poll-die-fighting-Democrats.html
If the choices are die fighting vs surrender and survive, it would have to be a really extreme case for me to choose die fighting.
But if the choice is fight and have a 50% chance of dying while helping raise the chances of a good outcome for others, vs surrender and have a 20% chance of dying while reducing the chances of a good outcome for others, fighting looks more plausible. Maybe a lot of people are subconsciously hearing the question that way, but it certainly seems phrased in a way that biases towards surrendering, particularly for highly educated people who are more likely to read the question literally.
Basically, if China was a much larger Singapore everything would be fine. The CCP would still get to be Authoritarian but they'd be much more aligned with the West and wouldn't export their illiberal tendencies outside of their borders making for a safer and more prosperous world.
Shouldn’t you be giving Noah Smith credit for the terms New Allies and New Axis?
I wouldn't say he invented this paradigm.
As a matter of phrasing, I don't like this paradigm. Anyone who remembers the old Axis is (at least) in their 80s now. For Gen Y, there's the unfortunate association of the word with GWB and the "Axis of Evil." And the "Allies" in this iteration are not so allied. We have trade links and (mostly) share NATO membership, but the fight does not yet feel existential. For better or for worse, in the 50s and 60s, people were genuinely terrified of communism. There is no sense of that, now. What does the average person's mind turn to when asked about China? Chinese takeout, TikTok, and cheap (both in cost and construction) consumer goods.
The piece is premised on the idea that the US and its allies must have the ability to fight a China-Russia-Iran-etc. axis militarily, but doesn’t make clear why this is the goal. Obviously there is risk of war over Taiwan and we have to take that seriously. But China is so different from the USSR in that it doesn’t have the same expansionist goals.
- If the objective is to limit China’s support for Russia’s expansionist goals, then driving an economic wedge between the US and China is counterproductive.
- If the objective is just to prepare for a war over Taiwan, then we have to seriously think about prioritizing military capability versus reducing the stakes of Taiwan to the US. The latter requires expanding the CHIPs Act efforts to focus intensely on working with Japan and South Korea — the other countries with semiconductor expertise — to increase non-China semiconductor capacity.
Regardless, increasing the economic manufacturing capacity of our allies is a nearly no-downside policy. What’s missing from the piece is a focus on Latin America. The economic disincentives for onshoring heavy manufacturing in the US are too great to be overcome. But we could do much more to support that capacity in Latin America. This is where Trump/MAGA policies are incoherent.
Love this article but can we please get bar charts rather than pie charts? Pie charts with more than two slices are hard to parse.
Is that right? It seems to me that the pie chart at least makes it easier to see when a group of adjacent wedges add up to more than another group of adjacent wedges, while bar charts don’t. There are probably a lot of things I’m not currently thinking of for which bar charts are more useful, but if you want to measure two alliances, the pie chart has some real advantages.
Here is a good article summarizing the case against pie charts: https://scc.ms.unimelb.edu.au/resources/data-visualisation-and-exploration/no_pie-charts
I absolutely agree with the four signs diagnosing when a pie chart has gone wrong! But the article makes the claim that literally *every* pie chart would be better as a bar chart, and I don't think it established that. If you aren't showing any really small wedges, and you want to see things as fractions of a whole, and possibly see the relative sizes of a few different overlapping combinations, they have some advantages.
Even for that, a stacked bar chart would be better.
Noted!
I agree with the basic set of goals that you’re arguing with here (alliance system good, manufacturing capacity within alliance system good, trade and labor migration within alliance system good), but I also think that you’re probably overrating how dangerous the US’s geopolitical rivals are. Russia has been struggling against a chronically dysfunctional basket case state with no real air power, China is teetering on the brink of demographic collapse and resorting to an unsustainable bailout to save its tanking property sector, Iran can’t even get a single drone or missile to Israel, and North Korea is… well, North Korea.
“Teetering on the brink of demographic collapse” might be true on actuarial timescales of decades, but not the timescale that wars are fought on.
I think you're the one really underrating China. You can point out that China has weaknesses and crises. This is hardly surprising. You could make a list of other structural, long-term weaknesses in the US (political dysfunction, vetocracy, housing crisis, inability to build infrastructure, so on). But that can't waive the reality that China's industrial capacity is staggering, its military buildup is massive, and thanks to the gender imbalance losing young men in war is basically the *opposite* of a problem.
Things like the demographic crisis and the incentives for Chinese policymakers to cover over economic weakness with unsustainable policy is the kind of thing that will create compounding problems over the course of decades, and the war over Taiwan will happen in less than two.
Matt should be proud that Xinhua takes the trouble to maintain a sockpuppet account on his Substack.
Based on his past posting history, that's unfair to Kade U. (blox., on the other hand, I'm pretty sure is working for somebody. . . .)
Youre so right, acknowledging the easily observable reality that China's navy adds ships in a tiny fraction of the time the US does is basically the same as Chinese propaganda.
You don't hear much about the "surplus young men" issue.
I agree that those things seem _likely_ but hedging our bets here also seems wise.
I think that's a reasonable point of view-- and a lot of things that would be prudent hedges are also just a good idea anyway.
"Russia has been struggling against a chronically dysfunctional basket case state with no real air power"
Yes, this is why I roll my eyes at Noah Smith's "The Russkies will be in Warsaw within a week if Ukraine falls!!!1!1!one" schtick. I'm happy to keep supporting Ukraine's defense indefinitely as long as Putin wants to keep shoving Russian forces into a meatgrinder, but people need to have a grip on reality -- the Ukrainians are still destroying Russian tanks faster than the Russians are building new ones and Russia is not going to be able to successfully launch a major offensive with rehabbed T-62s and T-55s against even just the European-component of NATO airpower. That's a recipe for Miracle on the Vistula, Part 2: Too Polish, Too Furious.
I'm far less sanguine about the Russian war than you are but "Miracle on the Vistula, Part 2: Too Polish, Too Furious" is brilliant, well done good sir.
Thank you, although I really wanted to come up with a word that would alliterate with "Polish" instead of just reusing "Furious," but couldn't immediately come up with a synonym for "Furious" that starts with a "P."
It is very very hard to mount a successful offensive against enemies who can easily blow you up from the sky. (Which, along with “move shipping containers full of stuff from point A to point B” is one of the NATO alliance’s core military competencies)
To flesh this out a little more, when we talk about the "new Axis," the two biggest players are China and Russia. Then there are lesser members, such as Iran, North Korea and Venezuela. Here's what bring them together.
1. They want territorial adjustments.
Russia wants to dominate and ultimately annex Ukraine, Belarus and Moldova.
China wants to absorb Taiwan and dominate the South China Sea
Venezuela wants to conquer oil-rich Guyana
North Korea wants to conquer South Korea
Iran wants its proxies to rule different countries in the Middle East
2. China and Russia want to move away from a system of multi-lateral organizations to a system of bilateral relations.
Multi-lateral organizations like NATO, the European Union, the WTO, etc empower small countries. If Russia is negotiating a trade agreement with a small country like Estonia, Russia can squeeze them because they are much larger and more powerful. However, if Russia negotiates a trade agreement with the European Union, then it doesn't have the same kind of leverage.
What Russia and China want is to undermine these multi-lateral organizations so that they can be the drivers in their "spheres of influence."
Unfortunately one of the few ideological underpinnings of the MAGA movement is to embrace this view of the world. They believe that the United States should leverage its enormous size and wealth to negotiate economic, trade and security deals with other countries that are overwhelmingly skewed in America's favor.
While there is a place for this (for example, NATO countries should increase their defense budgets), if taken too far then you create a world that's much poorer and the risk of war much higher. Just look at Europe. The European Union has its flaws, but ultimately rich countries like Germany, France, Sweden and the BENELUX countries have left a lot of money on the table to facilitate the development of once impoverished countries like Poland, Hungary and the Baltic States. Those peripheral countries are much richer, and the risk of war between these countries is small.
On the other hand, the post-Soviet states not in the European Union are all squeezed by Russia. These countries are unstable, poor and have the threat of war looming over them.