Tag: china

Is It Over America? Did China Win Without Even Firing a Shot?

Several decades ago speculation began about a new cold war, this one between America and China, with the newly emerging state capitalism of China confronting the then only remaining superpower, the United States. Those of us in the west were reassured by history, or at least the recent history we were most familiar with, where western ideas, economic organization and ideology had always triumphed, most recently against the “evil empire” of the Soviet Union. It seemed likely, or maybe even certain, this would also happen with communist China where, we were told, the dynamism and creativity needed for a truly successful society would ultimately come crashing up against the stultifying rigidity and need for control of the centralized communist state. The brutal crushing of student activism in Tiananmen Square a decade earlier seemed proof the Chinese model could never compete successfully, let alone endure, against the dynamism of western democracies and capitalism with their at times chaotic free flow and exchange of ideas. China’s domination of much of Asia for centuries before the emergence of the western European empires was nothing but a footnote, or so we thought. And to be completely honest, this was supported by the persistent racism directed at the Chinese by westerners over the preceding two centuries.

Future historians will spend their careers trying to understand what happened next. For reasons beyond the understanding of most of us, Americans turned against the model that created and maintained their prosperity and dominance, and that they mostly built for just that purpose. Instead of supporting and celebrating that model, many Americans came to feel put upon by it as they bought into the elitist narrative of American decline as exemplified by the hollowed out communities that had been the centre of American industry. I say “elitist” because it was a narrative favoured by wealthy vested interests in America as it enabled them to resist changes that would have affected their bottom lines. And what better person to personify this than Donald Trump? In not one, but two, separate elections they chose him and his ideology, if you can call it that, that promised to undo the very foundations of American greatness and with it the western world order. His 2016 election could be viewed as an aberration given the relative numbers with the popular vote, but his 2024 victory was an unmistakable statement that a majority American voters supported him and what he represented, whatever that might be.

In only nine months he has led an assault on almost every pillar of American greatness. Perhaps first amongst these is his drive to destroy the international trading system that has developed since the Second World War. With no distinction between friend and foe, he has attacked trading partners using tariffs as his cudgel. This shouldn’t have been a surprise as he has long publicly held the view that America was being “ripped off” by its trading partners and that tariffs were the remedy. Never the less, the speed and aggression employed caught almost everyone off guard.

His approach to negotiations with other nations reflects a view that may have been effective in New York real estate but that, in international affairs, guarantees fallout that will last generations. Put simply, if a negotiation is a “one of”, where the parties have no continuing relationship, it is possible to aim for a settlement where one party demonstrably wins and the other loses. And, in fact, it is even possible to crow about your success afterwards without damaging long term relationships and your own interests. I say “possible” because even in such a straightforward and transactional negotiation, nothing occurs in a vacum and, if nothing else, you emerge with your reputation sullied, although a sullied reputation is clearly not something Donald Trump cares about. But when you are negotiating with nations with whom you will have an enduring relationship, it is an entirely different matter. And that’s what’s happening now.

And it’s not just trading relationships that are being affected as the threat of tariffs is mobilized to interfere in the internal affairs of other nations. With Brazil, Trump is using tariffs to attempt to end the prosecution of his ally and former Brazilian President, Jair Bolsonaro, who has been charged with attempting to remain in power after losing an election by inciting a coup (sound familiar?). With Vietnam, the threat of tariffs was used to force the Vietnamese to accept and pay for, a golf club that benefits the Trump family. With Canada, the threat to end any negotiations on the tariffs was used to force it to abandon its digital services tax. With South Africa, tariffs are being used to try to force the government to repeal laws that might transfer agricultural lands from white South Africans to black South Africans. And, perhaps most damaging of all, his attack on India for importing Russian oil almost certainly guarantees a fundamental realignment of great powers that will not benefit the west.

Although this approach might lead to some short term “wins” for America, it will fail spectacularly in the long term as the barely dormant view of the “ugly American” re-emerges. America’s status as a superpower is significantly strengthened by its ability to rally the advanced western and Asian democracies behind it as force multipliers. The negative views fostered by the trade shakedowns will profoundly undermine that. Even with Canada, America’s closest neighbour and ally, the fracture will poison future relations for generations. Of course Canada will continue to help America when it experiences disasters but, when the day comes America needs allied troops beside it in places like Afghanistan where Canadians fought and died beside Americans, things will be different.

There’s something else going on under the guise of trade negotiations that everyone who cares about economic freedom and free enterprise should be concerned about. Of late, Trump has been announcing trade deals with private companies where the government takes significant ownership stakes in the companies in return for permitting them to conduct business both in the United States and with the rest of the world. In other words “pay to play”. This is the antithesis of the American free enterprise that drove its economy for well over two centuries. It’s the kind of state control evident in countries with authoritarian regimes that believe government and central planning is always the best way to organize an economy. This, despite the experience of the twentieth century, where time and time again, those economies failed to compete with the capitalist and democratic west and Asians. China may be an exception in this regard because of it’s long and very different history from the west, but do Americans really want to trade their freedom for the type of state control effectively practiced by the People’s Republic of China?

And it’s not just trade policy that’s undermining America’s status in the world. Terminating it’s premier foreign aid program, USAID, not only is having devasting effects on some of the most vulnerable and impoverished people on earth, it’s showing a callousness that completely undermines any claim to moral authority by America. Of course, it’s pretty obvious Donald Trump doesn’t give a fig about moral authority, apparently not understanding how it strengthened America in its past battles for the hearts and minds of people around the world.

America’s greatness was not just a result of it’s wealth and power; nor its democratic example; nor the moral clarity it often brought to international relations. It was also the result of the untrammelled intellectual freedom, scientific exploration, artistic freedom and, at times, almost chaotic internal debates over it’s direction. And now all these are under assault from forces that would prefer a much narrower, closed and static society. Using the pretext of antisemitism, Donald Trump has begun a full out assault on some of America’s greatest institutions of higher learning, seeking to bend them to his control and will. And some of them are bending. Even at the level of schools states controlled by MAGA supporters are banning books and, in one case at least, applying a filter against “wokeness” when assessing whether or not to hire teachers.

In the fields of medical and other scientific research the U.S. government is moving aggressively to end funding and to rollback supports for medical advances that don’t fit its narrow view of what is or is not correct. The research is being warped to fit the pre-conceived beliefs, and so advances in many areas crucial to human health and progress are being slowed or stopped, this under the Health and Human Services Secretary, Bobby Kennedy Jr, who is single handedly dismantling the great centres of medical research and management. His father must be rolling in his grave.

Even in the areas of arts and entertainment Trump and his allies are moving to defund and stifle the extraordinary creativity that has been the hallmark of American arts for at least a century. The perfect example is his takeover of the previously non partisan Kennedy Centre where he has now assumed the role of board chair and is actively intervening to ensure productions reflect his mudane tastes. This at the same time the government is cutting funding for public broadcasting in the United States.

And then there’s the existential issue of the effect of man made climate change on the world. Donald Trump and his supporters deny man made climate change because, to borrow a phrase from the documentary on the subject, it is a very inconvenient truth for those who prosper from the continued despoiling of the planet. After accepting massive donations from the petrochemical industry, the Trump administration has moved quickly to dismantle the supports and incentives for a transition to clean energy, casting them off as exemplars of woke liberalism and, particularly, of the administration of President Joe Biden. They have also withdrawn from international efforts to coordinate and accelerate the move away from carbon based energy. This, as the climate warms and the consequences appear as massive floods, hurricanes, firestorms, droughts and sea rise. I thought once the climate effects began to impact Americans, particularly those in red states, public opinion would change. But, thus far at least, apparently not, despite the advent of completely unprecedented disasters costing billions in damages and hundreds of lives. It’s probably a disservice to lemmings to draw a comparison between them and climate change deniers in the United States but it is oh so tempting.

So, while America turns increasingly inward and away from its great traditions of freedom, science, collaboration and progress, China just waits. It’s unlikely anyone would have predicted so many Americans would embrace a suicide pact that by any rational measure, is contrary to their own interests. But here we are. China is forging ahead with the technologies that will define the future while America looks longingly at a mythical and, for many, dark past. And although it is possible America may choose a different direction in 2028, that’s an eternity in the changing world we now inhabit. Increasingly, other nations will be pulled into the Chinese orbit, attracted by its wealth, military might and order, and repelled by the culture of blackmail and shakedowns increasingly characteristic of America’s approach to the world.

Is this the end of the “western moment”? I’m not sure but it does seem to be circling the drain. And the great tragedy is it is all so unnecessary and self inflicted.

Just sayin

GH

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Fasten Your Seatbelts. It’s Going to be a Bumpy Four Years

One of the comments I received in response to my last blog where I opined on the risk to Canada of a new Trump Presidency described me as “a paranoid imbecile”. Imbecile maybe. But paranoid?

Two days ago private citizen Donald Trump sent out a post on his ‘”Truth Social” social media platform in which he said he would impose 25% tariffs on all imports from Canada and Mexico until they take steps that stem the flow of fentanyl and illegal entrants to the United States. And he said he would do this on the first day of his new administration, January 20, 2025. Never one to be bothered by facts, Trump seemed to believe there was a huge problem with drugs and illegal immigrants coming from Canada. Or did he?

In an earlier conversation, Donald Trump laughed and suggested it was going to be fun dealing with Canada in his new administration. That was the same conversation where he said he loved tariffs as somehow the answer to all the problems that are plaguing America. Clearly he has a thing about Canada and it’s not good. None of us really knows why although the gratutitous shots Prime Minister Trudeau has taken at him over the years, particularly since his 2020 defeat, have not helped. That, combined with the seeming consensus amongst his Cabinet nominees and closest advisors that Canada is some kind of socialist threat where the woke policies they hate and reject are firmly in place, undoubtedly contribute to his views as he assembles what is likely to be the American government most hostile to its northern neighbour in at least a century. And that is something we have little control over. What we can control is our response. Having spent nearly half a century negotiating contracts, most of them asymetrical, i.e. with one party more powerful than the other, and usually representing the weaker of the parties, I certainly have some thoughts on how Canada should be responding.

Even before the explicit threat, some of our politicians were auditioning for the role of supplicant in chief to the golden throne of King Donald. Premier Doug Ford’s public musings on throwing Mexico under the bus and Premier Danielle Smith’s initiatives to cut some kind of a side deal on oil exports surely opened the door to the kick we received a week or so later. And once it arrived Chicken Littles appeared everywhere. First, we have Premier Ford fulminating on how insulting it is to be grouped in with Mexico. Aside from the implicit racism in that statement, it is also profoundly stupid if we want to develop a coherent and effective strategy to deal with the bully about to be reinstated in the White House. Not to be outdone, Premier Smith stated how difficult it would be for Alberta to be part of a united Canadian front given the presence of Prime Minister Trudeau. Also worthy of mention is Saskatchewan’s Premier Moe who, just in case we forgot, wanted the world to know he agreed with Alberta and, what’s more, agreed with Donald Trump that there was a huge problem with illegal immigration and fentanyl imports across the northern border despite all evidence to the contrary. By comparison, the federal government was mostly restrained, but not completely, with the Prime Minister immediately initiating a panicked phone call with Donald Trump and expressing gratitude he took the call, and then saying Canada would “prefer” a settlement that included Mexico which doesn’t exlude the possibility of him joining the “throw Mexico under the bus” mob at some point down the road.

All this is music to the ears of Trump and his advisers. We could practically hear the laughing and high fives at Mara Lago all the way up in Vancouver. The bully got the response he wanted and I guarantee he will now return to that playbook over and over again. He wants Canada to abandon supply management of dairy products, something I agree with by the way, so he threatens massive tariffs on the Canadian economy if we don’t. He wants Canada to end the digital service tax so, again, he threatens massive tariffs. He wants Canada to massively increase spending on defence so, again, the threat of massive tariffs. The list goes on and on and only includes the issues we are already aware of. What if, for example, America decides to engage in yet another unjust war somewhere and wants Canada’s support. Well, you know the drill.

So, what should Canada do? Well, for starters, shut up. There’s no need to respond to every provocation from Donald Trump except to say we are aware of it and we are working with our partners to ensure a careful and effective Canadian response. And, by the way, those partners must include Mexico. Canada imports approximately $485 billion of goods from the United States annually. Mexico imports approximately $455 billion. Canada is America’s second biggest market and Mexico isn’t far behind. Except for China, no other nations even come close. Between Canada and Mexico, nearly a trillion dollars of U.S. goods flow into those two countries. So, that’s a starting point. Some perspective.

No one would win an all out trade war and it’s likely Canada and Mexico would suffer more than the United States, but all would feel considerable pain. So, how do we calibrate just the right amount of push back while, simultaneously, showing the Trump administration this is not a path they want to go down? Well, for starters we don’t begin by offering terms of “surrender” before we even find an appropriate negotiating forum. And that is a problem right now. Donald Trump is not the President of the United States, Joe Biden is and will continue until January 20th so deciding how to engage with Trump is complicated but not impossible. In fact, in some ways, that’s the least of the problems.

In anticipation of the negotiations wherever and whenever they occur, Canada must assess what the Trump administration really needs and also what Canada’s core objectives in the negotiations are. We must also determine where Donald Trump is vulnerable and over what time, remembering there are mid term elections in the United States less than two years after he takes office. And, most important, Canada needs to game out any number of strategies and outcomes from the best to the worst and then plan its response to each. Oh, and never forget, the all out war approach always favours the more powerful party.

In parallel with this strategizing, we should reach out to allies, starting with Mexico with whom we need very close coordination, and including American business leaders, states potentially most damaged by the tariffs or by countervailing duties from Canada and Mexico, and friendly voices within Trump’s orbit.

And in the meantime, as the clock is ticking down to January 20, we must exude calm and confidence. Thanks to the initial reactions from some Canadian political leaders, we are already on our back foot and that’s unfortunate but not fatal, at least not yet. I don’t underestimate the difficulty of getting the Canadian choir to sing from the same songbook but, if Canadians generally support this approach, most will fall in line and the rest will just have to be marginalized.

And so I end with the British motto from the Second World War: “Keep calm and carry on” while the hard work is occuring out of public view.

Just sayin

GH

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