The Necessary War

Sen. Lindsey Graham: "Accept the pain that comes with trade between US and China"
By Andrew O'Reilly 

Sen. Lindsey Graham, R-S.C., said on Sunday that Democrats should not criticize President Trump for taking on China over trade as they have complained for years about Beijing’s policies but done nothing.
“Every Democrat and every Republican of note has said China cheats,” Graham said on CBS News’ “Face the Nation.” 

“The Democrats for years have been claiming that China should be stood up to, now President Trump is and we’ve just got to accept the pain that comes with standing up to China.”
Graham added: “To my Democratic colleagues: he’s doing the things you’ve been calling for all these years.”
Graham’s comments come as President Trump faced a tense reception from his counterparts on the world stage as they gathered in a French beach resort for the Group of Seven summit.
President Trump suggested during a breakfast meeting with United Kingdom Prime Minister Boris Johnson that he harbored qualms about the spiraling conflict. 

"Yeah. For sure," he told reporters when asked if he had any second thoughts about ramping up tariffs on China after Beijing imposed new tariffs to retaliate against earlier tariff moves by the U.S.

Then hours later, however, White House Press Secretary Stephanie Grisham issued a statement saying the news media had "greatly misinterpreted" President Trump's response. 

Grisham said the president only responded "in the affirmative -- because he regrets not raising the tariffs higher."
President Trump had been trying to use the summit to rally the other leaders to do more to stimulate their economies, as fears rise of a potential slowdown in the U.S. before he stands for reelection in November 2020.

The meetings come days after President Trump responded to China's announcement Friday that it would slap new tariffs on $75 billion in American goods with more tariffs of his own. 

President Trump also issued an extraordinary threat to declare a national emergency in an attempt to force U.S. businesses to cut ties with China.
Graham on Sunday did admit that the trade war would hurt some of his constituents – saying “consumer prices on commodities are going to go up” – but called it a necessary evil to take on Beijing.
“Until [the Chinese] feel the pain they’re not going to stop,” he said. 

“They never will until they feel a heavier price.”

The Anti-China Crusade

What tools could President Trump use to get treasonous firms to quit China?
By Andrea Shalal, Joel Schectman, Jason Lange, Eric M. Johnson and Jan Wolf

WASHINGTON  -- Hours after China announced retaliatory tariffs on U.S. goods on Friday, President Donald Trump ordered U.S. companies to “start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”.

U.S. President Donald Trump answers questions from reporters as he meets with Romania's President Klaus Iohannis in the Oval Office of the White House In Washington, U.S. August 20, 2019.

The stakes are high: U.S. companies invested a total of $256 billion in China between 1990 and 2017, compared with $140 billion Chinese companies have invested in the United States, according to estimates by the Rhodium Group research institute.
Some U.S. companies had been shifting operations out of China even before the tit-for-tat tariff trade war began more than a year ago.
But winding down operations and shifting production out of China completely would take time. Further, many U.S. companies such as those in the aerospace, services and retail sectors would be sure to resist pressure to leave a market that is growing.
Unlike China, the United States does not have a centrally planned economy.
So what legal action can the president take to compel American companies to do his bidding?
President Trump does have some powerful tools that would not require approval from U.S. Congress:

MORE TARIFFS
President Trump could do more of what he’s already doing, that is hiking tariffs to squeeze company profits enough for them to make it no longer worth their while to operate out of China.
President Trump on Friday boosted by 5 percentage points the 25% tariffs already in place on nearly $250 billion of Chinese imports, including raw materials, machinery, and finished goods, with the new higher 30% rate to take effect on Oct. 1.
He said planned 10% tariffs on about $300 billion worth of additional Chinese-made consumer goods would be raised to 15%, with those measures set to take effect on Sept. 1 and Dec. 15.
In addition to making it more expensive to buy components from Chinese suppliers, tariff hikes punish U.S. firms that manufacture goods through joint ventures in China.

NATIONAL EMERGENCY
President Trump could treat China more like Iran and order sanctions, which would involve declaring a national emergency under a 1977 law called the International Emergency Economic Powers Act, or IEEPA.
Once an emergency is declared, the law gives President Trump broad authority to block the activities of individual companies or even entire economic sectors, former federal officials and legal experts said.
For example, by stating that Chinese theft of U.S. companies’ intellectual property constitutes a national emergency, President Trump could order U.S. companies to avoid certain transactions, such as buying Chinese technology products, said Tim Meyer, director of the International Legal Studies Program at Vanderbilt Law School in Nashville.
President Trump used a similar strategy earlier this year when he said illegal immigration was an emergency and threatened to put tariffs on all Mexican imports.
Past presidents have invoked IEEPA to freeze the assets of foreign governments, such as when former President Jimmy Carter in 1979 blocked assets owned by the Iranian government from passing through the U.S. financial system.
“The IEEPA framework is broad enough to do something blunt,” said Meyer.
Using it could risk unintended harm to the U.S. economy, said Peter Harrell, a former senior State Department official responsible for sanctions, now at the Center for a New American Security.

FEDERAL PROCUREMENT CURBS
Another option that would not require congressional action would be to ban U.S. companies from competing for federal contracts if they also have operations in China, said Bill Reinsch, a senior adviser at the Center for Strategic and International Studies think tank.
Such a measure might be targeted specifically at certain sectors since a blanket order would hit companies such as Boeing, which is both a key weapons maker for the Pentagon and the top U.S. exporter.
Boeing opened its first completion plant for 737 airliners in China in December, a strategic investment aimed at building a sales lead over its European arch-rival Airbus.
Boeing and Airbus have been expanding their footprint in China as they vie for orders in the country’s fast-growing aviation market, which is expected to overtake the United States as the world’s largest in the next decade.

1917 TRADING WITH THE ENEMY ACT
A more efficient measure would be to invoke the Trading with the Enemy Act, which was passed by Congress during World War One.
The law allows the U.S. president to regulate and punish trade with a country with whom the United States is at war. 
Invoking this law because would sharply escalate tensions with China.
That would amount to an overt declaration, while IEEPA would allow the Trump administration to take similar actions without as large of a diplomatic cost.

National Emergency vs. Huawei

President Trump Takes Aim At Huawei, Paves Way For Ban Of Chinese Telecom Equipment

By RICHARD GONZALES

President Trump signed an executive order Wednesday designed to bar U.S. telecommunications networks from using equipment from foreign suppliers, a move apparently targeting Chinese telecom giant Huawei.
The order declares a "national emergency" and says that "foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services" and committing economic and industrial espionage against the U.S.
Trump's order directs Commerce Secretary Wilbur Ross to draft rules to restrict the purchase of information and communications technology from companies "owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary."
A senior administration official says the order is not directed at any particular country or company, but the order appears to be aimed at Chinese telecom manufacturer Huawei.
Separately, the Commerce Department said Wednesday it was adding Huawei to its "Entity List," preventing it from buying components from American companies without U.S. government approval.
The administration says Huawei's technology could become a conduit for snooping or sabotage by the government in Beijing. 

The U.S. federal government itself is already barred from doing business with Huawei and another Chinese telecom firm, ZTE. 

The administration has also been discouraging allies from using Huawei equipment as they build out 5G networks.
The executive order gives the Commerce Department 150 days to write regulations implementing it.
The Trump administration "will do what it takes to keep America safe and prosperous, and to protect America from foreign adversaries" targeting vulnerabilities in American communications infrastructure, White House press secretary Sarah Sanders said in a statement.
The president's action was described by a senior administration official as "company and country agnostic." 

Even so, it was greeted with bipartisan endorsements on Capitol Hill as strong action against China amid American fears of technological vulnerability.
"This is a needed step, and reflects the reality that Huawei and ZTE represent a threat to the security of U.S. and allied communications networks," said Virginia Sen. Mark Warner, the top Democrat on the Senate Intelligence Committee, in a statement. 

"Under current Chinese security laws, these and other companies based in China are required to provide assistance to the Chinese state."
Republican Sen. Ben Sasse of Nebraska, also a member of the Senate Intelligence Committee, said in a statement, "Let's cut to the chase: China's main export is espionage, and the distinction between the Chinese Communist Party and Chinese 'private-sector' businesses like Huawei is imaginary. The Trump Administration is right to recognize this reality and issue this order."
The president's executive order comes as the U.S. and China are locked in a trade war, with both nations imposing tariffs on products from the other.

President Trump could declare a national emergency barring US companies from using equipment made by China's Huawei and ZTE

• President Donald Trump is considering an executive order in the new year to declare a national emergency that would bar U.S. companies from using telecommunications equipment made by China's Huawei and ZTE.
• The two companies work at the behest of the Chinese government and their equipment is used to spy on Americans.
• It would be the latest step by the Trump administration to cut Huawei and ZTE, two of China's biggest network equipment companies, out of the U.S. market.
• The issue has new urgency as U.S. wireless carriers look for partners as they prepare to adopt next generation 5G wireless networks.

By David Shepardson and Diane Bartz

WASHINGTON -- President Donald Trump is considering an executive order in the new year to declare a national emergency that would bar U.S. companies from using telecommunications equipment made by China's Huawei and ZTE, three sources familiar with the situation told Reuters.
It would be the latest step by the Trump administration to cut Huawei and ZTE, two of China's biggest network equipment companies, out of the U.S. market.

The two companies work at the behest of the Chinese government and their equipment could be used to spy on Americans.
The executive order, which has been under consideration for more than eight months, could be issued as early as January and would direct the Commerce Department to block U.S. companies from buying equipment from foreign telecommunications makers that pose significant national security risks, sources from the telecoms industry and the administration said.
While the order is unlikely to name Huawei or ZTE, a source said it is expected that Commerce officials would interpret it as authorization to limit the spread of equipment made by the two companies. 

The sources said the text for the order has not been finalized.
The executive order would invoke the International Emergency Economic Powers Act, a law that gives the president the authority to regulate commerce in response to a national emergency that threatens the United States.
The issue has new urgency as U.S. wireless carriers look for partners as they prepare to adopt next generation 5G wireless networks.
The order follows the passage of a defense policy bill in August that barred the U.S. government itself from using Huawei and ZTE equipment.
Huawei and ZTE did not return requests for comment. 

The White House also did not return a request for comment.
The Wall Street Journal first reported in early May that the order was under consideration, but it was never issued.

A security guard keeps watch at the entrance of the Huawei global headquarters in Shenzhen in China's southern Guangdong province on December 18, 2018.

Chinese are using the American countryside to encircle and finally capture the cities

Rural operators in the United States are among the biggest customers of Huawei and ZTE, and fear the executive order would also require them to rip out existing Chinese-made equipment without compensation. 

Industry officials are divided on whether the administration could legally compel operators to do that.
While the big U.S. wireless companies have cut ties with Huawei in particular, small rural carriers have relied on Huawei and ZTE switches and other equipment because they tend to be less expensive.
The company is so central to small carriers that William Levy, vice president for sales of Huawei Tech USA, is on the board of directors of the Rural Wireless Association.
The RWA represents carriers with fewer than 100,000 subscribers. 

It estimates that 25 percent of its members had Huawei or ZTE equipment in their networks, it said in a filing to the Federal Communications Commission earlier this month.
The RWA is concerned that an executive order could force its members to remove ZTE and Huawei equipment and also bar future purchases, said Caressa Bennet, RWA general counsel.
It would cost $800 million to $1 billion for all RWA members to replace their Huawei and ZTE equipment, Bennet said.
Separately, the FCC in April granted initial approval to a regulation that bars giving federal funding to help pay for telecommunication infrastructure to companies that purchase equipment from firms deemed threats to U.S. national security, which analysts have said is aimed at Huawei and ZTE.
The FCC is also considering whether to require carriers to remove and replace equipment from firms deemed a national security risk.
In March, FCC Chairman Ajit Pai said "hidden 'back doors' to our networks in routers, switches — and virtually any other type of telecommunications equipment - can provide an avenue for hostile governments to inject viruses, launch denial-of-service attacks, steal data, and more."
In the December filing, Pine Belt Communications in Alabama estimated it would cost $7 million to $13 million to replace its Chinese-made equipment, while Sagebrush in Montana said replacement would cost $57 million and take two years.

Chinese Peril

Chinese indicted on illegal drug manufacturing
By Sadie Gurman

Drug Enforcement Administration Acting Administrator Robert Patterson, center, accompanied by Royal Canadian Mounted Police Assistant Commissioner Joanne Grace Crampton, left, and Deputy Attorney General Rod Rosenstein, right, speaks at a news conference at the Justice Department in Washington, Tuesday, Oct. 17, 2017, to announce the indictments of two Chinese fentanyl trackers in the fight against opiate substances from entering the United States.

WASHINGTON — Two Chinese nationals have been indicted on charges they manufactured tons of fentanyl and other powerful narcotics that were then peddled in the United States, killing at least four people and seriously injuring five others, Justice Department officials announced Tuesday.
Authorities said the men controlled one of the most prolific Chinese drug-trafficking organizations, but with no extradition treaty with China, the chances are slim they will ever be brought to the U.S. to face the charges.
The men, who are not in custody, are accused of separately running chemical labs in China that produced the drug and other illegal opioids for sale online to Americans who were often unaware of its potency and susceptible to overdose. 

At least 21 other people were also indicted on charges they trafficked the drugs across the U.S. and Canada, often through the U.S. mail.
The announcement comes as the Trump administration suffered a setback in its efforts to call attention to the nation’s drug crisis. 

Its nominee to be the nation’s drug czar withdrew Tuesday from consideration following reports that he played a key role in weakening the federal government’s authority to stop companies from distributing opioids.
It also comes amid growing pressure on Donald Trump to fulfill his pledge to declare the nation’s opioid epidemic a “national emergency,” as a commission he’s convened on the subject has urged him to do. 

An initial report from the commission in July noted that the approximate 142 deaths each day from drug overdoses mean the death toll is “equal to September 11th every three weeks.”
A sign of White House interest in the issue, presidential counselor Kellyanne Conway quietly attended Tuesday’s news conference at the Justice Department.
Robert W. Patterson, acting administrator of the U.S. Drug Enforcement Administration, said the Chinese case represents “one of the most significant drug threats facing the country” because they were able to produce a wide array of synthetic drugs and hide their tracks with web-based sales, international shipments and digital currencies like bitcoin.
The Chinese men indicted were Xiaobang Yan, 40, and Jian Zhang, 38, who worked separately but similarly, authorities said.
Yan, who operated at least two chemical plants in China that were capable of producing tons of fentanyl, would monitor drug legislation and law enforcement actions in the U.S., changing the chemical structure of his drugs to avoid prosecution, Deputy Attorney General Rod Rosenstein said. A 2013 traffic stop in Mississippi unearthed a domestic drug ring linked to Yan.
Zhang, along with five Canadians, two people from Florida and New Jersey man, were indicted in North Dakota for conspiracy to import the drugs from Canada and China. 

Prosecutors say Zhang ran at least four labs and sold the drug to American customers online. Investigators became aware of him after police officers responded to a deadly overdose in Grand Forks, North Dakota and traced the supply chain, officials said.
Rosenstein, who discussed the problem with Chinese officials last week during a high-level dialogue on law enforcement and cybersecurity, would not say whether the labs have been shut down. 

He said he was hopeful Chinese authorities would hold the men accountable.
Federal authorities are increasingly warning of the dangers of fentanyl, which can be lethal even in small amounts and is often laced with other dangerous drugs. 

The Centers for Disease Control and Prevention estimated that more than 20,000 Americans were killed by the drug and its analogues in 2016, and the number is rising, Rosenstein said.