Sina Delenda Est

Secretary of State Mike Pompeo Calls China’s Communist Party ‘Central Threat of Our Times’
By Marc Santora

Secretary of State Mike Pompeo, right, in London on Wednesday with the British foreign secretary, Dominic Raab.

LONDON — Secretary of State Mike Pompeo declared the Chinese Communist Party “the central threat of our times” on Thursday, even as he sought to talk up the prospects of a United States trade deal with Britain, which rebuffed American pressure to ban a Chinese company from future telecommunications infrastructure.
The scathing criticism of the Chinese government was the strongest language Mr. Pompeo has used as the Trump administration seeks to convince American allies of the risks posed by using equipment from Huawei, a Chinese technology giant.
At the same time, Mr. Pompeo sought to reassure British officials that even though the two countries saw the issue differently, it would not undermine the strong bond between them.
Mr. Pompeo’s reassurances come at a delicate moment for the British government as it begins the process of forging new stand-alone trade deals after it formally leaves the European Union on Friday.
Speaking at an appearance with the British foreign secretary, Dominic Raab, Mr. Pompeo referred derisively to a 2016 warning from President Barack Obama that Brexit would place Britain at the “back of the queue” in any trade negotiations.
“We intend to put the United Kingdom at the front of the line,” Mr. Pompeo said.
Still, while Britain’s security and economy depend on a close relationship with Washington, China is a significant investor in the country and a growing buyer of British goods.
That was reflected in Britain’s decision this week to allow Huawei to play a limited role in its systems for the next generation of high-speed mobile internet, known as 5G.
With Washington pressing governments across Europe and elsewhere to ban Huawei equipment from new 5G networks, leaders have had to walk a fine line, trying not to antagonize either economic giant while not falling behind in the race to build the next generation of information technology.

Huawei’s main U.K. offices in Reading, west of London.

Mr. Pompeo said that the concerns of the United States were not about any one company, but rather, the Chinese system.
“When you allow the information of your citizens or the national security information of your citizens to transit a network that the Chinese Communist Party has a legal mandate to obtain, it creates risk,” he said.
“While we still have to be enormously vigilant about terror, there are still challenges all across the world, the Chinese Communist Party presents the central threat of our times,” he said.
While Mr. Pompeo was particularly blunt in his criticism of the Chinese government on Thursday, it was in keeping with his warnings to European leaders as he has sought to persuade them to keep Huawei out of their new networks.
“China has inroads too on this continent that demand our attention,” he told reporters in June during a trip to The Hague, in the Netherlands. 

“China wants to be the dominant economic and military power of the world, spreading its authoritarian vision for society and its corrupt practices worldwide.”
Mr. Pompeo said he was disappointed by the British decision, but said the two countries would work through the issue and reaffirmed Britain’s vital role in the Five Eyes intelligence-sharing alliance with the United States.
Still, he cautioned it could still affect the way information was shared.
“We will never permit American national security information to go across a network we do not have trust and confidence in,” he said.
Mr. Pompeo also mentions Iran regularly as a threat, but not using language as strong as what he applied to China today.
London was Mr. Pompeo’s first stop on a five-nation tour that includes Ukraine, where he will become the first United States cabinet member to visit the country since Trump’s July phone call with the newly elected Ukrainian president, Volodymyr Zelensky.
That call, during which Trump urged Mr. Zelensky to look into issues related to the 2016 election in the United States and to former Vice President Joseph R. Biden Jr. and his son, Hunter Biden, provoked a whistle-blower complaint and led to Trump’s impeachment and his trial in the Senate.
Mr. Pompeo’s trip was originally scheduled to take place just after the new year, but was delayed because of concerns about escalating tensions with Iran.
In addition to the United Kingdom and Ukraine, Mr. Pompeo is scheduled to make stops in Belarus, Kazakhstan and Uzbekistan.
Mr. Pompeo left the United States trailed by controversy after the State Department barred National Public Radio’s diplomatic correspondent from the trip. 

It came after a dust-up with a veteran reporter from the organization, Mary Louise Kelly, who questioned him about the Trump administration’s firing of the United States ambassador to Ukraine.
In an extraordinary statement, Mr. Pompeo lashed out at Ms. Kelly, and said the news media was “unhinged.”
And the decision by Britain to allow Huawei to provide some of the equipment in its 5G network, coming just days before Mr. Pompeo arrived, was a bitter disappointment.British officials sought to convince the Americans that in limiting the role of Huawei, they would keep their critical infrastructure safe.
Without naming Huawei, the British guidelines noted the dangers posed by “high-risk” vendors and said they would be limited to parts of the country’s wireless infrastructure, such as antennas and base stations, that were not seen as critical to the integrity of the entire system.
Mr. Pompeo said that while the Trump administration disagreed with that assessment, the issue would not undermine the deep bond shared between the two countries.
“The truth is it is your best friends you call up and say ‘What the heck are you doing?’” he said.
Mr. Pompeo then went on to Downing Street for a meeting with Britain’s prime minister, Boris Johnson, which he summed up as “fantastic.”

Pr. Peter Navarro Highlights Case for More China Tariffs

By Alan Rappeport

Pr. Peter Navarro, senior trade adviser to President Trump.

WASHINGTON — A critical decision about China tariffs is looming, and Pr. Peter Navarro has re-emerged to share some thoughts on the matter.
President Trump must decide within days whether to proceed with the next round of tariffs on $160 billion of Chinese goods, which are slated to go into effect on Sunday. 

Pr. Navarro, a senior trade adviser to President Trump and a China skeptic, has cast doubt on the willingness of Beijing to meaningfully overhaul its trade practices and has advocated the tariffs as a tool to force China to change its behavior.
He’s not the only one making that point. 

To illustrate those concerns, Pr. Navarro harnessed his literary muse, Ron Vara, in a memo that is circulating in Washington. 

Sent from an email address belonging to Ron Vara, the memo highlights public commentary in favor of keeping the pressure on China with more tariffs.
“Much debate going on,” Ron Vara wrote, referring to the decision about whether to roll back or double down on China tariffs. 

“Here’s one side that has not been in focus. Thoughts?”
Ron Vara is the fictional character that Pr. Navarro created and cited as an expert more than a dozen times in five of his 13 books, where he offered searing critiques of China. 

Pr. Navarro confirmed the authenticity of the memo. 

It is not clear how widely it was distributed.

“On a daily basis, I speak to, or correspond with, people that I respect, and don’t necessarily agree with, to receive their thoughts on issues critical to American workers and the American people,” Pr. Navarro said. 

“This kind of active dialogue makes for the best possible decisions.”
He added: “Such a free exchange of ideas is essential to the success of an administration that is simultaneously putting up the best economic numbers in a half century and achieving success after success on the trade front.” 

He described a new trade deal with Canada and Mexico that is on track to become law as “just the latest big win.”
The memo does not show Pr. Navarro formally endorsing any views, but it lives up to his reputation for seeking to force deep structural changes to China’s economy through tariffs. 

It outlines the “keep tariffs argument,” which accuses China of stepping up American farm purchases of pork and soybeans only because of its domestic swine fever outbreak. 

And he claims that recent changes to Chinese law run counter to promises by the country’s officials to protect American intellectual property.
The memo also asserts that President Trump’s tariffs are protecting the United States economy without having any negative effect on growth or the stock market.
And, in a twist on market certainty, it suggests that President Trump could calm jittery investors by publicly backing away from a deal: “Get uncertainty out of the market by announcing NO deal until after the election and ride the tariffs to victory.”
Trump administration officials have been giving mixed signals about the fate of the tariffs and the significance of the Sunday deadline. 

Pr. Navarro, who has been pushing privately for the most ambitious deal possible, has made few public remarks about the China negotiations in recent weeks.
Amid the jockeying within the Trump administration, officials often try to arrange for television anchors or commentators to convey their views in hopes that President Trump will watch them and be persuaded.
Pr. Navarro’s memo goes on to cite a recent commentary from Jim Cramer, the CNBC host, who made the case that the strength of America’s economy means that it can withstand any drag from a more protracted trade dispute with China.
It also includes an analysis from Lawrence B. Lindsey, who was director of the National Economic Council under George W. Bush and makes the argument that another round of China tariffs would do minimal harm to the United States. 

Sina Delenda Est

Japan To Get First Aircraft Carriers Since World War II

By H I Sutton

Japan is set to deploy its first aircraft carriers since World War II. 

The Japanese Navy will modernize two helicopter destroyers into de facto aircraft carriers. 

This will increase the number of carrier operators in the Asia-Pacific region.

Japanese Navy carrier Izumo, photographed in 2016. She will be modified to support F-35 jets.

Historically the Imperial Japanese Navy placed a heavy emphasis on aircraft carriers. 

The Hōshō, when she was commissioned on December 27, 1922, was the first purpose built aircraft carrier in the world. 

Going into the Battle of Midway in June 1942 Japan had the largest aircraft carrier fleet in the world. 

This did not last. 

By the end of the war many carriers had been sunk, mostly by the U.S. Navy. 

After the war the remaining carriers were scrapped and Japan entered a period of disarmament, adopting a Constitution in 1947 that forbade the maintenance of forces that could wage war.
Amid the Korean War and Cold War, with U.S. support, military capabilities were rebuilt for the purpose of self-defense, which was deemed constitutional.
Recently Japan’s neighbors have began acquiring carriers. 

China is building a fleet of large aircraft carriers. 

One of them, Shandong, sailed through the Taiwan Strait on November 17 with fighter jets on deck. The passage, which could be interpreted as a show of force, was reportedly trailed by U.S Navy and Japanese Maritime Self-Defense Force (JMSDF) vessels. 

South Korea is also planning its first jet-equipped carriers.
Against this backdrop the interpretation of the war-renouncing Article 9 of the Constitution has shifted under Prime Minister Shinzo Abe. 

Japan will not have aircraft carriers, but it will have Multi-Purpose Operation Destroyers. 

To a lay person the difference is only in the name. 

Two current ‘Helicopter Destroyers’ will be modified to carry F-35B fighters.Actually, the return to de facto aircraft carriers has been a multi-step journey, at least in naval architecture terms. 

Starting in the Cold War, Japan built extra-large destroyers equipped with more helicopters than those of other nations. 

The Shirane class were 7,500 tons and could carry 3 Sea King helicopters. 

Other countries' destroyers could carry one or two helicopters. 

But there was no suggestion that they might carry jet aircraft.
The ships which followed them were in a different league altogether. 

Euphemistically called 'helicopter destroyers,' these have the look and feel of flat-top aircraft carriers. And at 19,000 tons they are larger than some of the light carriers in service with other navies. 

But the biggest was yet to come. 

The follow-on Izumo class comes in at 27,000 tons. 

It is these 2 ships which are slated to receive F-35B Lightning-II jets.
Japan formally announced the purchase of 42 Lockheed Martin F-35B jets in August. 

These are the jump jet version, capable of short take-off and vertical landing (STOVL) operations. This allows them to operate aboard Japan’s new carriers. 

The air force already operates the larger F-35A model which is not capable of landing on the new carriers. 

By the time the -B models enter service, probably in the 2020s, the carriers should be ready to receive them.
Japan’s carriers will be smaller and fewer than China’s, but they slow the pace by which the JMSDF is being overtaken by the rapidly modernizing Chinese fleet.

Sina Delenda Est

U.S. carrots have failed to reform China. It’s time to use sticks.

By Henry Olsen 

Protesters use umbrellas to protect from tear gas in the Kowloon area of Hong Kong on Monday. 

This was a bad weekend for the Communist Chinese government. 

The leak of internal documents proving that the government has detained more than 1 million Muslim Uighurs, combined with the violent crackdown on Hong Kong university protesters, again reveals the regime’s true face. 

The United States cannot stand idly by.
China’s government cannot credibly deny its repressive nature. 

It is bad enough that there is no political freedom and that it censors public expression and the Internet. 

Its suppression and ruthless colonization of Tibet were a cause celebre years ago but unfortunately have been forgotten even as Tibet’s culture and its people are slowly crushed beneath the weight of state power. 

What is happening now in East Turkestan, home of the Uighur population, and Hong Kong isn’t a bug; it’s the essential feature of the Chinese regime.
The United States bears some responsibility for what is going on. 

China’s Communists would repress its people regardless of what we do, but our open and extensive economic ties finance the regime’s power. 

Without our markets, China would be a poor and technologically backward country. 

With them, however, they are fast becoming a global power that can dream of repressing other people in addition to its own.We had hoped the regime would liberalize once it saw how rich it could become by becoming more Western. 

Instead, open economic ties enrich its economy while Western governments turn a blind eye to the terrors the government perpetuates. 

Carrots have not worked. 

If we want China to liberalize, and if we want to reduce its potential threat to our way of life, we need to start looking at using sticks.
A bill working its way through Congress is a good first step. 

Because Hong Kong is officially semi-independent of China under the “one nation, two systems” doctrine, it has long had a separate economic status under U.S. law. 

That status gives goods and services that flow through Hong Kong special access and favored treatment and is thus unaffected by the current trade war with China. 

The bill would require an annual reassessment of that status based on whether Hong Kong is credibly a separate part of China or remains under the thumb of Beijing as any other Chinese city. 

The bill has already been approved by the House, and Sen. Marco Rubio (R-Fla.) is working this week to ease its passage through the Senate by unanimous consent. 

All signs suggest he will succeed.
Trump should then sign the measure and show China’s government that he does not value a trade deal more than he values human rights. 

Indeed, a veto would be a sign of weakness in his trade negotiations, as China would see that pressure from U.S. businesses eager to keep the money flowing can influence the White House. 

Signing the Hong Kong bill would thus both help the protesters fighting for freedom and strengthen Trump’s hand in the ongoing discussions.
But this should be only a first step. 

China’s government needs rapid economic growth to further its power and ambitions. 

Its people have become used to capitalist comforts. 

Any slowing of that growth would raise the potential for discontent and unrest among the Chinese themselves. 

It should be U.S. policy to slow that growth and thereby force the Chinese government to choose between freedom and repression, between guns and butter.That will mean going much further than even the Senate bill contemplates. 

Taking a tough line on trade negotiations is essential. 

The United States should not sign any deal that allows China to continue its mercantilist practices, even if refusal to sign a deal causes U.S. businesses pain. 

China is counting on our government caring more about avoiding pain than on inflicting pain on it. 

Trump revels in showing he is a tough guy; he cannot show weakness now by giving in to commercial pressure.
The United States also needs to commit to a slow economic disengagement from China. 

The government should encourage U.S. firms to find other countries to invest in, and we need to work with our allies to have them follow suit as much as possible. 

This will slow global economic growth for some time, as moving businesses is expensive. 

But the Chinese government should see that global engagement with the West means adapting to the values of the West.
China is known for its collection of wise proverbs. 

“Patience is power,” one states. 

“In a struggle between strength and patience, patience will win,” advises another. 

If the United States can patiently use its power, it will start to change China’s dangerous and unjust behavior. 

This will take a while, but “it takes more than one cold day for a river to freeze a meter deep.” 

For our sake, and for the sake of the Uighurs, Tibetans, Hong Kongers and all of China, we should start today.

Sina Delenda Est

U.S. Sails Warships Through Taiwan Strait in Show of Force to China
By LUIS MARTINEZ

Flying with the US Navy as it keeps tabs on China over the South China Sea.

Two U.S. Navy warships sailed through the international waters of the Taiwan Strait on Monday, the body of water separating China and Taiwan, the island nation that China considers a breakaway province.
The transit could increase tensions between the U.S. and China as both countries are involved in a trade dispute and as the U.S. voices concerns over China’s militarization of the South China Sea.
“USS Curtis Wilbur (DDG 54) and USS Antietam (CG 54) conducted a routine Taiwan Strait Transit on Oct. 22, in accordance with international law,” Cmdr. Nate Christensen, Deputy Spokesman, US Pacific Fleet. ”
“The ships’ transit through the Taiwan Strait demonstrates the U.S. commitment to a free and open Indo-Pacific,” he added. “The U.S. Navy will continue to fly, sail and operate anywhere international law allows.”
A similar transit by two U.S. destroyers occurred in July, the first time the Navy had carried out a mission like that in more than a year.
Taiwan’s Defense Ministry first confirmed the transit in a statement.
“The Ministry of National Defense said today that two US ships have sailed from the south to the north through the Taiwan Strait,” said a translation of the statement.
“The Ministry of National Defense pointed out that the US ship routinely passed the international waters of the Taiwan Strait, and the relevant details were explained by the US government,” it added.
While the U.S. and China cooperate in denuclearizing North Korea, tensions have increased as both the U.S. and China have engaged in a trade war.
There are also tensions between the two countries over China's growing military presence on man-made islands in the Spratly Islands in the South China Sea.
Earlier this month a Chinese Navy ship came within 45 yards of the U.S. Navy destroyer USS Decatur as it carried out a freedom of navigation passage through international waters close to those islands.
Another irritant in the U.S.-China relationship continues to be U.S. support for Taiwan.
The U.S. continues to sell military weapons to the island nation even though it does not have diplomatic relations with Taiwan. 

Sina Delenda Est

US Navy proposing major show of force to warn China

By Barbara Starr

The US Navy's Pacific Fleet has drawn up a classified proposal to carry out a global show of force as a warning to China and to demonstrate the US is prepared to deter and counter their military actions, according to several US defense officials.
The draft proposal from the Navy is recommending the US Pacific Fleet conduct a series of operations during a single week in November.
The goal is to carry out a highly focused and concentrated set of exercises involving US warships, combat aircraft and troops to demonstrate that the US can counter potential adversaries quickly on several fronts.

The plan suggests sailing ships and flying aircraft near China's territorial waters in the South China Sea and Taiwan Strait in freedom of navigation operations to demonstrate the right of free passage in international waters. 

The proposal means US ships and aircraft would operate close to Chinese forces.
The defense officials emphasized that there is no intention to engage in combat with the Chinese.
While the US military carries out these types of operations throughout the year, the proposal being circulated calls for several missions to take place in just a few days.
While one official described it as "just an idea," it is far enough along that there is a classified operational name attached to the proposal, which is circulating at several levels of the military. Officials would not confirm the name of the potential operation.

The Pentagon refused to acknowledge or comment on the proposal. 

"As the secretary of defense has said on countless occasions, we don't comment on future operations of any kind," said Lt. Col. David Eastburn, a Pentagon spokesman.
The US Pacific Fleet also refused to comment.
Word of the US Navy's proposal comes just days after what the Pentagon has called an "unsafe" encounter between US and Chinese destroyers in the South China Sea.
The US Navy said the Chinese destroyer Lanzhou came within 45 yards (41 meters) of the USS Decatur while the US ship was on a "freedom of navigation" operation near Chinese-claimed islands.
The 8,000-ton destroyers could have been seconds away from colliding, said Carl Schuster, a former US Navy officer who spent 12 years at sea.
The destroyer encounter capped weeks of heightened tensions between Beijing and Washington.
Late last week, US Secretary of Defense James Mattis pulled out of a planned visit to Beijing later in October, two US officials told CNN.
Mattis had originally planned to visit the Chinese capital to meet with senior Chinese officials to discuss security issues. 

The last-minute cancellation of the unannounced trip has not been publicly confirmed by the Pentagon.
Earlier in the week, the Chinese government canceled a port visit to Hong Kong by the USS Wasp, a US Navy amphibious assault ship.
Following the cancellation, the US Navy released a series of photos showing troops aboard the 40,000-ton Wasp taking part in a live-fire exercise in the South China Sea.
Also last week, the US flew B-52 bombers over the South China Sea and East China Sea.
Earlier in September, Washington levied sanctions against the Chinese military over its purchase of weapons from Russia, including Su-35 fighter jets and S-400 surface-to-air missile systems.
Meanwhile, on the economic front, the US and Chinese governments have been levying tariffs on an expanding number of each country's exports.
At a press conference last week, US President Donald Trump said his often-mentioned "friendship" with Chinese dictator Xi Jinping may have come to an end.

While the proposal for the week-long exercises is being driven by the US military, carrying it out it during November when US mid-term elections are taking place could have political implications for the Trump administration if the US troops are challenged by China.

The proposal for now focuses on a series of operations in the Pacific, near China, but they could stretch as far as the west coast of South America where China is increasing its investments. 

If the initial proposal is approved, the missions could be expanded to Russian territory.
Defense Secretary James Mattis and Gen. Joseph Dunford, chairman of the Joint Chiefs of Staff, will take into account the diplomatic implications of each mission, officials said. 

They will also have to consider the risk of suddenly moving forces to new areas away from planned deployments, and whether potential threat areas are being left uncovered by the military, especially in the Middle East.
At this time the proposal is still being considered within the military.
The proposal has grown out of the Pentagon's National Defense Strategy which focuses on the growing military challenge posed by the Chinese and Russian militaries. 

Mattis has urged US commanders to come up with innovative and unexpected ways to deploy forces.
Currently the aircraft carrier USS Harry S Truman is taking the unexpected step of operating in the North Sea -- sending a signal to Russia that US military forces can extend their reach to that area.

Sina Delenda Est

President Trump appeals to patriotism as China retaliates with tariffs
By ROBERT SCHROEDER

President Donald Trump appealed to Americans’ patriotism in the trade war with China, as he met with Poland’s president at the White House.

‘THESE PEOPLE ARE GREAT PATRIOTS’
Trump on Twitter both warned China against taking retaliatory action as well as expressed hope that Americans would rally to his side if it did. 

Beijing has responded to Trump’s imposing $200 billion worth of tariffs on Chinese goods by announcing it would take retaliatory tariff action against $60 billion of American goods.
“China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me,” the president tweeted Tuesday.
“What China does not understand is that these people are great patriots and fully understand that China has been taking advantage of the United States on trade for many years. They also know that I am the one that knows how to stop it. There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!”
In comments alongside Polish President Andrzej Duda in the Oval Office, Trump said the U.S. will probably have no choice but to impose another $267 billion in duties on Chinese goods. 

Investors shrugged off trade tensions on Tuesday, with the Dow Jones Industrial Average jumping by more than 185 points. 

The U.S. did reduce the planned tariff rate on Chinese goods, and China did the same for its retaliatory action.

Sina Delenda Est

China Once Looked Tough on Trade. Now Its Options Are Dwindling.
By Keith Bradsher

A Chinese trade delegation during a tour of soybean fields in Missouri last month. American soybeans are an essential import in China, which will have trouble replacing them.

BEIJING — President Trump imposed tariffs in July on $34 billion in Chinese goods. 

China matched them dollar for dollar with its own.
Then he hit an additional $16 billion in goods in August. 

China matched that, too.
Now, Mr. Trump has made his biggest move yet, announcing 10 percent tariffs starting in a week on $200 billion a year of Chinese goods. 

But this time, China can’t match them all — and that crystallizes a growing problem for Beijing.
China’s tit-for-tat responses have so far failed to thwart President Trump’s trade offensive, and with the White House amping up the fight again, Chinese leaders aren’t sure how to respond, people briefed on economic policymaking discussions say.
Chinese officials “are generally confused,” said Raúl Hinojosa-Ojeda, a trade specialist at the University of California, Los Angeles, who has been traveling around China speaking with officials, businesspeople and workers.
“They don’t know what to do,” he added. 

“They worry that the tit-for-tat model is playing into President Trump’s hands.”
China doesn’t import nearly enough from the United States to target $200 billion in American goods. 

But China’s leaders feel they can’t back down. 

They have presented the trade war as part of a broader effort by the United States to contain China’s rise. 

The Chinese public could see any effort to soothe tensions as capitulation.
Some hard-liners want a more aggressive stance. 

Lou Jiwei, who retired as finance minister in 2016 but is still the head of the country’s social security fund, suggested on Sunday that China could deliberately disrupt American companies’ supply chains by halting the export of crucial components mostly made in China. 

But Chinese trade experts dismiss that idea as impractical and not the government’s position.
For now, China is punting. 

It has said it would add tariffs on $60 billion in American goods, which would account for nearly everything it buys from the United States. 

It is still considering its options after that.

A factory worker making socks for export in Huaibei, China. Because of the trade imbalance, China can’t match the United States tariff for tariff.

In a statement on Tuesday, China’s Ministry of Commerce said it that was “deeply disappointed” and that “China will have to adopt countermeasures.” 

It did not specify what those might be.
Chinese officials know what they don’t want to do. 

They have rejected one idea that would replace the matching tariffs with a more sophisticated system, said the people briefed on the discussions, who spoke on the condition of anonymity because of the fragility of the deliberations. 

That response — discussed in detail within the Commerce Ministry and other agencies — would have led to lower tariffs on American goods in dollar terms, which could be seen as a fig leaf to the White House.
That approach would have recognized a potentially expensive new reality for Beijing: The tariffs may be here to stay. 

President Trump is suffering from weak approval ratings and could lose influence in congressional elections in November. 

But while Democrats have opposed most of his agenda, many have supported his attacks on trade with China. 

Even if President Trump leaves office in two years, there is little guarantee that his China trade policies will be changed.
In Beijing, proponents of the new approach, which would scale down China’s tariffs in dollar terms to reflect the lopsided trade imbalance between the two countries, say Chinese leaders could still revisit the idea because it offers them a way to contain the damage and soothe tensions.
China’s leaders “don’t really want to engage in a dollar-for-dollar retaliation,” said Yu Yongding, a prominent economist at the Chinese Academy of Social Sciences. 

“Their purpose is to stop this trade war.”
China’s other options are limited.
It could punish American businesses that depend on China. 

Already, its antitrust officials have effectively killed the $44 billion effort by Qualcomm, the semiconductor company, to buy a Dutch chip maker. 

China has also pledged to buy soybeans from other countries, but replacing voluminous American supplies will be difficult.
Other moves have already served as warnings, like delays at Chinese ports. 

Ford Motor’s Lincoln cars and other goods have sometimes been the subject of unusually lengthy customs inspections this summer, although the delays do not appear to have caused much financial harm.
“It is certain that China will have other, invisible retaliation against the United States,” said Mei Xinyu, a researcher at the Commerce Ministry’s policy research and training academy.
But more drastic moves, like closing factories or encouraging consumer boycotts of American goods, could eliminate Chinese jobs. 

They could also permanently damage China’s reputation as a place to do business and only accelerate corporate plans to look to other countries.
“It’s difficult to build a reputation, and easy to harm a reputation,” Mr. Mei said.
China could also guide its currency to a weaker level against the dollar. 

It has already nudged the currency a bit lower, making Chinese goods cheaper in the United States and partly offsetting the tariffs. 

But a weaker currency would make China’s imports more expensive, raise the risk of inflation and lead to a damaging flight of money out of the country. 

It could also provoke further American retaliation.
Imported cars at the port in Qingdao, China. Some of Beijing’s options beyond tariffs could cause China pain, eliminating jobs and damaging its reputation as a place to do business.

While the trade war has hit only a small part of the Chinese economy for now, the damage could add up. 

Higher tariffs on American goods raise the cost of essential imports like soybeans and microchips. 

China still derives a big chunk of growth from making smartphones, clothing, chemicals and a raft of other goods and selling them to Americans.
Already its currency and stock market have weakened as the trade war has intensified. 

China has taken steps to shore up its economy, but they could take months or years to kick in.
China has offered small concessions to the United States, like lowering its tariffs on imported cars from everywhere to 15 percent, from 25 percent; the United States, however, charges 2.5 percent. China has also allowed foreign companies to own greater shares of Chinese insurers, banks, asset management companies and car factories.
The new plan that Chinese officials rejected in recent weeks could have been more warmly greeted by the White House.
Under that plan, the United States and China would each levy tariffs based on proportions of trade rather than dollar amounts, people familiar with the discussions said. 

Because the United States imports nearly four times as much from China as it exports, that would lead to tariffs at different values.
For example, the United States has already levied tariffs on $50 billion in Chinese goods, one-tenth of what it imports from China. 

Instead of matching that with tariffs on $50 billion in American-made goods, China would levy tariffs on one-tenth of such goods, totaling $13 billion to $15 billion, depending on the details.
Proponents of the plan say letting Washington impose more tariffs than Beijing would actually hurt the United States more because tariffs are ultimately paid by consumers and businesses in the countries that levy them.

But other Chinese trade experts say tariffs on equal fractions of trade would be too big a compromise.
“It’s unrealistic, it’s difficult in practice, it’s not doable, and it’s against basic trade rules,” said Mr. Mei, the Commerce Ministry researcher.

Sina Delenda Est

With Ships and Missiles, China Is Ready to Challenge U.S. Navy in Pacific
By Steven Lee Myers

China’s first aircraft carrier, the Liaoning, at sea in April. First launched by the Soviet Union in 1988, it was sold for $20 million to a Chinese investor who said it would become a floating casino, though he was in reality acting on behalf of the People’s Liberation Army Navy.

DALIAN, China — In April, on the 69th anniversary of the founding of China’s Navy, the country’s first domestically built aircraft carrier stirred from its berth in the port city of Dalian on the Bohai Sea, tethered to tugboats for a test of its seaworthiness.
“China’s first homegrown aircraft carrier just moved a bit, and the United States, Japan and India squirmed,” a military news website crowed, referring to the three nations China views as its main rivals.
Not long ago, such boasts would have been dismissed as the bravado of a second-string military. 

No longer.
A modernization program focused on naval and missile forces has shifted the balance of power in the Pacific in ways the United States and its allies are only beginning to digest.
While China lags in projecting firepower on a global scale, it can now challenge American military supremacy in the places that matter most to it: the waters around Taiwan and in the disputed South China Sea.
That means a growing section of the Pacific Ocean — where the United States has operated unchallenged since the naval battles of World War II — is once again contested territory, with Chinese warships and aircraft regularly bumping up against those of the United States and its allies.
To prevail in these waters, according to officials and analysts who scrutinize Chinese military developments, China does not need a military that can defeat the United States outright but merely one that can make intervention in the region too costly for Washington to contemplate. 

Many analysts say Beijing has already achieved that goal.
To do so, it has developed “anti-access” capabilities that use radar, satellites and missiles to neutralize the decisive edge that America’s powerful aircraft carrier strike groups have enjoyed. 

It is also rapidly expanding its naval forces with the goal of deploying a “blue water” navy that would allow it to defend its growing interests beyond its coastal waters.
“China is now capable of controlling the South China Sea in all scenarios short of war with the United States,” the new commander of the United States Indo-Pacific Command, Adm. Philip S. Davidson, acknowledged in written remarks submitted during his Senate confirmation process in March.
He described China as a “peer competitor” gaining on the United States not by matching its forces weapon by weapon but by building critical “asymmetrical capabilities,” including with anti-ship missiles and in submarine warfare. 

“There is no guarantee that the United States would win a future conflict with China,” he concluded.
Last year, the Chinese Navy became the world’s largest, with more warships and submarines than the United States, and it continues to build new ships at a stunning rate. 

Though the American fleet remains superior qualitatively, it is spread much thinner.
“The task of building a powerful navy has never been as urgent as it is today,” Xi Jinping declared in April as he presided over a naval procession off the southern Chinese island of Hainan that opened exercises involving 48 ships and submarines. 

The Ministry of National Defense said they were the largest since the People’s Republic of China was founded in 1949.
Even as the United States wages a trade war against China, Chinese warships and aircraft have picked up the pace of operations in the waters off Japan, Taiwan, and the islands, shoals and reefs it has claimed in the South China Sea over the objections of Vietnam and the Philippines.
When two American warships — the Higgins, a destroyer, and the Antietam, a cruiser — sailed within a few miles of disputed islands in the Paracels in May, Chinese vessels rushed to challenge what Beijing later denounced as “a provocative act.” 

China did the same to three Australian ships passing through the South China Sea in April.
Only three years ago, Xi stood beside President Barack Obama in the Rose Garden and promised not to militarize artificial islands it has built farther south in the Spratlys archipelago. 

Chinese officials have since acknowledged deploying missiles there, but argue that they are necessary because of American “incursions” in Chinese waters.
When Defense Secretary Jim Mattis visited Beijing in June, Xi bluntly warned him that China would not yield “even one inch” of territory it claims as its own.
Ballistic missiles designed to strike ships on display at a military parade in Beijing in 2015.

‘Anti-Access/Area Denial’
China’s naval expansion began in 2000 but accelerated sharply after Xi took command in 2013. 

He has drastically shifted the military’s focus to naval as well as air and strategic rocket forces, while purging commanders accused of corruption and cutting the traditional land forces.
The People’s Liberation Army — the bedrock of Communist power since the revolution — has actually shrunk in order to free up resources for a more modern fighting force. 

Since 2015, the army has cut 300,000 enlisted soldiers and officers, paring the military to two million personnel over all, compared with 1.4 million in the United States.
While every branch of China’s armed forces lags behind the United States’ in firepower and experience, China has made significant gains in asymmetrical weaponry to blunt America’s advantages. 

One focus has been in what American military planners call A2/AD, for “anti-access/area denial,” or what the Chinese call “counter-intervention.”
A centerpiece of this strategy is an arsenal of high-speed ballistic missiles designed to strike moving ships. 

The latest versions, the DF-21D and, since 2016, the DF-26, are popularly known as “carrier killers,” since they can threaten the most powerful vessels in the American fleet long before they get close to China.
The DF-26, which made its debut in a military parade in Beijing in 2015 and was tested in the Bohai Sea last year, has a range that would allow it to menace ships and bases as far away as Guam, according to the latest Pentagon report on the Chinese military, released this month. 

These missiles are almost impossible to detect and intercept, and are directed at moving targets by an increasingly sophisticated Chinese network of radar and satellites.
China announced in April that the DF-26 had entered service. 

State television showed rocket launchers carrying 22 of them, though the number deployed now is unknown. 

A brigade equipped with them is reported to be based in Henan Province, in central China.
Such missiles pose a particular challenge to American commanders because neutralizing them might require an attack deep inside Chinese territory, which would be a major escalation.
The American Navy has never faced such a threat before, the Congressional Research Office warned in a report in May, adding that some analysts consider the missiles “game changing.”
The “carrier killers” have been supplemented by the deployment this year of missiles in the South China Sea. 

The weaponry includes the new YJ-12B anti-ship cruise missile, which puts most of the waters between the Philippines and Vietnam in range.
The Chinese military is preparing for a limited military conflict from the sea, according to a 2013 paper in a journal called The Science of Military Strategy.
Lyle Morris, an analyst with the RAND Corporation, said that China’s deployment of missiles in the disputed Paracel and Spratly Islands “will dramatically change how the U.S. military operates” across Asia and the Pacific.
The best American response, he added, would be “to find new and innovative methods” of deploying ships outside their range. 

Given the longer range of the ballistic missiles, however, that is not possible “in most contingencies” the American Navy would be likely to face in Asia.

Soldiers with the People’s Liberation Army Navy patrolling Woody Island in the disputed Paracel archipelago in 2016.

Blue-Water Ambitions
The aircraft carrier that put to sea in April for its first trials is China’s second, but the first built domestically. 

It is the most prominent manifestation of a modernization project meant to propel the country into the upper tier of military powers. 

Only the United States, with 11 nuclear-powered carriers, operates more than one.
A third Chinese carrier is under construction in a port near Shanghai. 

Analysts believe China will eventually build five or six.
The Chinese military, traditionally focused on repelling a land invasion, increasingly aims to project power into the “blue waters” of the world to protect China’s expanding economic and diplomatic interests, from the Pacific to the Atlantic.
The carriers attract the most attention but China’s naval expansion has been far broader. 

The Chinese Navy — officially the People’s Liberation Army Navy — has built more than 100 warships and submarines in the last decade alone, more than the entire naval fleets of all but a handful of nations.
Last year, China also introduced the first of a new class of a heavy cruisers — or “super destroyers” — that, according to the American Office of Naval Intelligence, “are comparable in many respects to most modern Western warships.” 

Two more were launched from dry dock in Dalian in July, the state media reported.
Last year, China counted 317 warships and submarines in active service, compared with 283 in the United States Navy, which has been essentially unrivaled in the open seas since the collapse of the Soviet Union in 1991.
Unlike the Soviet Union, which drained its coffers during the Cold War arms race, military spending in China is a manageable percentage of a growing economy. 

Beijing’s defense budget now ranks second only to the United States: $228 billion to $610 billion, according to estimates by the Stockholm International Peace Research Institute.
The roots of China’s focus on sea power and “area denial” can be traced to what many Chinese viewed as humiliation in 1995 and 1996. 

When Taiwan moved to hold its first democratic elections, China fired missiles near the island, prompting President Bill Clinton to dispatch two aircraft carriers to the region.
“We avoided the sea, took it as a moat and a joyful little pond to the Middle Kingdom,” a naval analyst, Chen Guoqiang, wrote recently in the official Navy newspaper. 

“So not only did we lose all the advantages of the sea but also our territories became the prey of the imperialist powers.”
China’s naval buildup since then has been remarkable. 

In 1995, China had only three submarines. 

It now has nearly 60 and plans to expand to nearly 80, according to a report last month by the United States Congressional Research Service.
As it has in its civilian economy, China has bought or absorbed technologies from the rest of the world, in some cases illicitly. 

Much of its military hardware is of Soviet origin or modeled on antiquated Soviet designs, but with each new wave of production, analysts say, China is deploying more advanced capabilities.
China’s first aircraft carrier was originally launched by the Soviet Union in 1988 and left to rust when the nation collapsed three years later. 

Newly independent Ukraine sold it for $20 million to a Chinese investor who claimed it would become a floating casino, though he was really acting on behalf of Beijing, which refurbished the vessel and named it the Liaoning.
The second aircraft carrier — as yet unnamed — is largely based on the Liaoning’s designs, but is reported to have enhanced technology. 

In February, the China Shipbuilding Industry Corporation disclosed that it has plans to build nuclear-powered carriers, which have far greater endurance than ones that require refueling stops.
China’s military has encountered some growing pains. 

It is hampered by corruption, which Xi has vowed to wipe out, and a lack of combat experience. 

As a fighting force, it remains untested by combat.
In January, it was embarrassed when one of its most advanced submarines was detected as it neared Japanese islands known as the Senkaku. 

The attack submarine should never have been spotted.
The second aircraft carrier also appears to have experienced hiccups. 

Its first sea trials were announced in April and then inexplicably delayed. 

Not long after the trials went ahead in May, the general manager of China Shipbuilding was placed under investigation for “serious violation of laws and discipline,” the official Xinhua news agency reported, without elaborating.

Fiery Cross Reef in the South China Sea. The deployment of missiles on three man-made reefs in the disputed Spratly Islands — Subi, Mischief and Fiery Cross — has prompted protests from the White House.

Defending Its Claims
China’s military advances have nonetheless emboldened the country’s leadership.
The state media declared the carrier Liaoning “combat ready” in the summer after it moved with six other warships through the Miyako Strait that splits Japan’s Ryukyu Islands and conducted its first flight operations in the Pacific.
The Liaoning’s battle group now routinely circles Taiwan. 

So do Chinese fighter jets and bombers.
China’s new J-20 stealth fighter conducted its first training mission at sea in May, while its strategic bomber, the H-6, landed for the first time on Woody Island in the Paracels. 

From the airfield there or from those in the Spratly Islands, the bombers could strike all of Southeast Asia.
The recent Pentagon report noted that H-6 flights in the Pacific were intended to demonstrate the ability to strike American bases in Japan and South Korea, and as far away as Guam.
“Competition is the American way of seeing it,” said Li Jie, an analyst with the Chinese Naval Research Institute in Beijing. 

“China is simply protecting its rights and its interests in the Pacific.”
And China’s interests are expanding.
In 2017, it opened its first overseas military base in Djibouti, on the Horn of Africa, saying that it will be used to support its participation in multinational antipiracy patrols off Somalia.
It now appears to be planning to acquire access to a network of ports and bases throughout the Indian Ocean. 

Though ostensibly commercial, these projects have laid the groundwork for a necklace of refueling and resupply arrangements that will “facilitate Beijing’s long-range naval operations,” according to a new report by C4ADS, a research organization in Washington.
“They soon will be able, for example, to send a squadron of ships to somewhere, say in Africa, and have all the capabilities to make a landing in force to protect Chinese assets,” said Vassily Kashin, an expert with the Institute of Far Eastern Studies of the Russian Academy of Sciences in Moscow.
The need was driven home in 2015 when Chinese warships evacuated 629 Chinese and 279 foreigners from Yemen when the country’s civil war raged in Aden, a southern port city.
One of the frigates involved in the rescue, the Linyi, was featured in a patriotic blockbuster film, “Operation Red Sea.”
“The Chinese are going to be more present,” Mr. Kashin added, “and everyone has to get used to it.”

Fighter jets on the Liaoning in the East China Sea in April.

The Necessary War

China training pilots to target US

By Ryan Browne and Ben Westcott

Washington -- China is actively developing its fleet of long-range bombers and training its pilots for missions targeting the US, according to a new Pentagon report.
"Over the last three years, the People's Liberation Army (PLA) has rapidly expanded its overwater bomber operating areas, gaining experience in critical maritime regions and training for strikes against US and allied targets," the report said.
The "Annual Report on Military and Security Developments Involving the People's Republic of China" is a US government report mandated by Congress, which details Chinese military developments over the previous year.
This year's report also claims that China is pursuing a nuclear capability on its long-range bombers, saying the Chinese air force "has been re-assigned a nuclear mission."
"The deployment and integration of nuclear capable bombers would, for the first time, provide China with a nuclear 'triad' of delivery systems dispersed across land, sea, and air," the report said.
Chinese dictator Xi Jinping has made no secret of his desire to modernize China's armed forces, including weeding out widespread corruption in the ranks and updating the country's military hardware.
As Thursday's report notes, the PLA is undergoing "the most comprehensive restructure in its history to become a force capable of fighting joint operations."
The United States released a new Defense Strategy at the beginning of 2018 where it proclaimed "long-term strategic competitions with China" as one of the US military's top challenges.
According to Thursday's report, China is working on a "stealthy, long-range strategic bomber with a nuclear delivery capability that could be operational within the next 10 years," in addition to the bombers it already operates.
In a show of the expanding reach of Beijing's power, the Chinese military landed nuclear-capable H-6K bombers on one of their artificial islands in the South China Sea for the first time in May.
This year's report comes at a time of heightened tensions between the United States and China, amid an escalating trade war and disagreements over Beijing's actions in Taiwan and the South China Sea.
Even before the new report's release, Washington was feeling the full brunt of the Chinese military's fury over a new $717 billion US defense bill which encourages closer cooperation with Taiwan to counter Beijing.
In a statement released on Tuesday, Chinese Ministry of Defense spokesman Wu Qian said the United States was"full of Cold War mentality."
The new US report released on Thursday said China was deploying "increasingly advance military capabilities intended to coerce Taiwan" in a bid to prevent the island from declaring independence.
Despite Taiwan being self-governed for almost 70 years, the mainland Chinese government continues to view the island as an integral part of its territory.
The US report didn't just highlight threats to the United States or its allies -- there was also a broader discussion of the spread of Chinese influence around the world.
The document notes China has established its first overseas base in Djibouti and that it "will seek to establish additional military bases in countries with which it has a longstanding friendly relationship and similar strategic interests, such as Pakistan, and in which there is a precedent for hosting foreign militaries."
China formally established its Djibouti military base in July last year, followed several months later by the country's controversial acquisition of the Hambantota port in Sri Lanka.
Around the time of the Djbouti base opening, an editorial in the state-run Global Times stressed its importance to Beijing's plans. 

"Certainly this is the People's Liberation Army's first overseas base and we will base troops there. It's not a commercial resupply point... This base can support Chinese Navy to go farther, so it means a lot," said the paper.
Xi Jinping's signature infrastructure policy, the Belt and Road Initiative (BRI), served to encourage countries to fall into line with China's ambitions.
"China uses the BRI to develop strong economic ties with other countries, shape their interests to align with China's, and deter confrontation or criticism of China's approach to sensitive issues," the report said.
China also continues to develop counterspace capabilities, "including kinetic-kill missiles, ground-based lasers and orbiting space robots," the report said, a time when US President Donald Trump plans to establish a Space Force by 2020 to protect US assets in space.
Beijing is also working "to expand space surveillance capabilities that can monitor objects across the globe and in space and enable counterspace actions."

Sina Delenda Est

President Trump and Europe are teaming up against China on trade
By Rick Newman

President Trump called it “a very big day for free and fair trade.” 

That’s Trumpian hyperbole, but the president’s new efforts to smooth out trade disputes with Europe include one major new development.
After meeting with European Commission president Jean-Claude Juncker, President Trump hosted a short press conference to highlight what transpired: There’s a new goal to eliminate tariffs on many goods traded between the two regions and to “resolve” President Trump’s new tariffs on steel and aluminum imports. 

Europe pledged to buy more American energy and agricultural products. 

And the two giant economies will try to improve cooperation on technical standards, which could ultimately boost trade.
The last point President Trump mentioned may be the most significant, however. 

Trump said the United States and Europe will work together to “address unfair trading practices,” including “forced technology transfer,” “theft of intellectual property” and “overcapacity.” 

Neither man mentioned China, but that’s exactly who they were talking about.

President Donald Trump and European Commission president Jean-Claude Juncker speak in the Rose Garden of the White House, Wednesday, July 25, 2018, in Washington. 

All advanced nations have the same complaints about China: It forces foreign firms to turn over key technology as a condition of doing business in the country. 

It copies or steals trade secrets belonging to foreign firms. 

And it subsidizes giant companies that produce steel, aluminum and other commodities, allowing them to undercut foreign rivals on price, gobble up market share and drive foreign competition out of business.
President Trump has tried to address those problems, mostly be slapping tariffs on Chinese imports and insisting that China reduce its trade surplus with the United States. 

Trade experts say that won’t work. 

But joining with allies and pressuring China together could work, they say. 

And the place to start is at the World Trade Organization, the mysterious, globalist, technocratic trade arbiter President Trump has repeatedly bashed, to the delight of his supporters.

Reforming the WTO
President Trump has moved toward the mainstream, at least for a while. 

President Trump said Europe and the United States will work with “like-minded partners” within the WTO to address China’s trade abuses. 

That’s a good idea. 

The United States and dozens of other nations formed the WTO in 1995, when China was still a fledgling, developing economy that qualified for more protections than advanced economies. 

China entered the WTO in 2001, opening the door to becoming the export colossus it is now.
China is now the world’s second-largest economy, and there’s no other nation that intervenes in the economy on the scale China does. 

The trade honchos who formed the WTO in the 1990s never quite foresaw that, and the WTO lacks many of the tools to deal with China’s unique economic model.
Reforming the WTO to bring China to heel would be the kind of drawn-out, detail-oriented forward crawl that President Trump seems to despise. 

So his interest could wane and he might not follow through. 

But of all the moves China should fear, a revamped WTO that sharply limits China’s ability to pump government money into giant, home-grown firms is probably more threatening than President Trump’s tariffs.
Other trade announcements President Trump made were less impressive. 

President Trump said the two regions would work toward zero tariffs on “non-auto industrial goods.” Fine, but autos are the biggest sticking point between President Trump and Europe, not fruit or leather or bourbon. 

And there was no mention of any action on autos. 

That means President Trump’s threat to put a 20% tariff on all imported autos remains, which would roil the industry if it were to happen.
Both sides also emphasized that they were beginning “talks” to lower trade barriers between the United States and Europe, without any actual commitments. 

And President Trump and Juncker both indicated either party could terminate the agreement, which means it’s more of an agreement to try to agree than anything tangible. 

Still, President Trump’s bluster was subdued and he didn’t insult anyone. 

Maybe it was a big day after all.

Sina Delenda Est

Steve Bannon: China will blink in trade war with US
By Carleton English

Steve Bannon

Trade wars, while perhaps nerve-wracking, are winnable, according to former White House chief strategist Steve Bannon.
“How [the trade war] ends is in victory,” Bannon said Wednesday at a Manhattan investor conference. 

“Donald Trump is not going to back off this. The Chinese are going to blink.”
Earlier this month the US and China levied tariffs of $34 billion on each other’s goods, with the Trump administration then threatening more tariffs in response to China’s theft of US intellectual property.
“I think the No. 1 thing you’re going to see out of the trade war is the reorientation of the complete supply chain of Japan, Western Europe, the United States, and Southeast Asia,” Bannon added, noting that “the regime in China is in deep trouble.”
But for all his excitement over his former boss, Bannon conceded that he doesn’t speak directly with the president.
“I talk to guys in the White House all the time,” the 64-year-old said at the CNBC Institutional Investor Delivering Alpha Conference. 

“But with the president I make sure we go through lawyers.” 

Bannon said the ongoing Mueller investigation is why he leans on lawyers when reaching out to Trump.
Earlier at the conference, National Economic Council Director Larry Kudlow painted a rosy picture of the economy, saying: “There’s no recession in sight right now.”
Kudlow’s bullishness stems from the possibility of an unprecedented capital spending boom and the return of capital to US from Europe and China at levels unseen since the 1990s.
Those factors could contribute to GDP growth in excess of 4 percent for a quarter or two, Kudlow noted.
Kudlow’s remarks come as many from Wall Street to Washington have worried about a more volatile stock market and the brewing trade war between the US and China.
But when it comes to trade, the ball is now in Xi Jinping’s court to end the battle, Kudlow said, adding that his sources indicate that many in China want a deal to be made.

Sina Delenda Est

How to win a trade war with China
By Peter Morici

U.S. President Donald Trump and Chinese dictator Xi Jinping arrive at a state dinner at the Great Hall of the People in Beijing, China, November 9, 2017. 

For decades, China has waged a trade war—targeting U.S. industries and stealing jobs from ordinary American workers.
Obama’s weakness on trade—along with the left’s obsession with identity politics—helped put Donald Trump in the White House.
Now we have a leader who puts American workers first but his factious trade team appears clueless about how to bring effective pressure to win at negotiations or if necessary unilaterally reorder our trade with China to be fair.
To prevail in any international confrontation—whethr it is disarming North Korea, stifling Russian aggression or fixing trade aggression—the president needs to know the enemy, cultivate allies to bring pressure that compliments U.S. actions and implement a strategy that makes retaliation difficult.
Mr. Trump’s hawks—Ambassador Robert Lighthizer and Trade Director Peter Navarro—confuse trade with the world with trade with China. 
The WTO isn’t busted and our allies are not trade criminals.
Europe has its dysfunctions—most significantly Germany's obsession with trade surpluses that victimized southern EU members and the United States—but slapping tariffs on Europe and Canada does not solve America’s number one trade problem.
The United States has a $515 billion trade deficit—$374 billion is with China and oil accounts for most of the rest. 
Contrary to Trump’s claims we have a modest trade surplus with Canada.
Our allies increasingly recognize China’s mercantilism and its goal to dominate artificial intelligence and other critical technologies by 2025 is a big threat.
They could be engaged to help put pressure on China but slapping tariffs on those allies pushes them into Beijing’s corner.

In 2001, China was admitted to the WTO on the premise that its economic policies would evolve toward western norms. Instead, it got rich exploiting its developing country status on tariffs and to target and obtain critical technologies by applying coercive tactics and outright theft.

WTO rules are intended to boost trade and investment among western market economies and its dispute settlement mechanism is designed to adjudicate the venial sins of overly-aggressive, western industrial policies—for example, state subsidies to Airbus.
In 2001, China was admitted on the premise that its economic policies would evolve toward western norms.
Instead, it got rich exploiting its developing country status in the WTO—that permits, for example, Chinese tariffs of 25 percent on cars as compared to the U.S. levy of 2.5 percent—and to target and obtain critical technologies by applying coercive tactics and outright theft.
Its notorious industrial targeting—opaque administrative barriers to imports that supplement high tariffs, extravagant production and export subsidies and criminal acquisition of western technology through compulsory joint ventures and outright piracy—is virtually impossible to police through WTO dispute settlement. 
It would be like prosecuting tens of thousands of white collar criminals on Wall Street each year—those are terribly difficult cases for government lawyers to win, even one at a time.
America and our allies need a new deal with China. 
If Beijing wants to rig trade, then it must be managed to bring about balance.
Otherwise, China accumulates hundreds of billions of dollars it can use to buy influence through its Silk Road initiative and acquire western technology companies.
And relying on targeted tariffs is dumb.
China can quickly counter duties on $50 billion, $100 billion or even $200 billion of its exports by targeting with tariffs U.S. farmers and other industries in Republican districts vulnerable to Democratic challenges, and disrupting the operations of U.S. firms operating in China.
Instead, Mr. Trump should impose an across-the-board measure similar to the 1971 import surcharge imposed by Richard Nixon.
Specifically, limit U.S. imports from China to what we sell in China. 
Grant to U.S. exporters resalable quotas to import from China in proportion to sales there.
The more China buys from America, the more America buys from China. 
Conversely, if it penalizes U.S. agricultural products and other exports, it sells less here.
The scheme would eliminate the special pleading of U.S. businesses for exemptions from proposed tariffs on Chinese goods—those that value imports more would bid the most to purchase import licenses.
Our allies are worried about undermining the WTO and China diverting its subsidized stuff to their markets but our answer should be simple.
Keep trading with China as we are and there will be no WTO worth having—Beijing will soon dictate the rules.
China’s privateers are stealing European and Canadian intellectual property and jobs too.
They can join the battle by imposing a similar regime, instead of harping, whining and criticizing as they are wont to do whenever a Republican occupies the White House.
The door should be open to our allies but America should not put up with a WTO regime that puts China in charge.

Sina Delenda Est

US will continue to confront China over disputed islands, Mattis says
By Lukas Mikelionis

U.S. Defense Secretary Jim Mattis lands in Kabul on March 13, 2018 on an unannounced trip to Afghanistan. 

Defense Secretary Jim Mattis said Tuesday that the U.S. will continue to confront China’s increasing militarization of islands in the South China Sea -- despite the U.S. angering Beijing over the weekend by sending two Navy ships to the region.
Mattis rebuked China and said the country hasn’t abided by its promise to stop militarization of the Spratly Islands, a disputed territory whose ownership is contested by Brunei, Malaysia, the Philippines and Vietnam.
Mattis said U.S. ships are maintaining a "steady drumbeat" of naval operations and will confront “what we believe is out of step with international law."
“You’ll notice there is only one country that seems to take active steps to rebuff them or state their resentment [to] them, but it’s international waters and a lot of nations want to see freedom of navigation,” Mattis told reporters while enroute to Hawaii.

His comments came after the two U.S. warships sailed close to the Paracel Islands, north of the Spratlys, promoting an angry response from China, which claims to have sent ships and aircraft to counter the U.S. Navy’s presence in the area.
The U.S. operation on Sunday was planned in advance, but similar military exercises have become routine amid China’s increasing militarization of the islands.
Officials at the Pentagon have long criticized China’s actions in the disputed islands, claiming the Chinese government has not been open about its military build-up and has been using the islands to gather intelligence, Reuters reported.

China deployed truck-mounted surface-to-air missiles or anti-ship cruise missiles at Woody Island, according to recent satellite photos. 

Earlier this month, China also landed bombers in the islands.
“When they (Chinese) do things that are opaque to the rest of us, then we cannot cooperate in areas that we would otherwise cooperate in,” Mattis told reporters, adding that American diplomats were working on the issue and heard concerns about Chinese actions not just from the U.S. government but other regional allies as well.
He is expected to raise the issue with Chinese officials during a security forum in Singapore later this week.

Sina Delenda Est

Concrete and coral: Beijing's South China Sea building boom fuels concerns

By Greg Torode, Simon Scarr

HONG KONG/SINGAPORE -- At first glance from above it looks like any clean and neatly planned small town, complete with sports grounds, neat roads and large civic buildings.
But the town is on Subi reef in the Spratlys archipelago of the hotly contested South China Sea and, regional security experts believe, could soon be home to China’s first troops based in the maritime heart of Southeast Asia.
Private sector data analysis reviewed by Reuters shows Subi, some 1,200 km (750 miles) from China’s coast, is now home to nearly 400 individual buildings – far more than other Chinese islands.
Subi could be the future location of hundreds of People’s Liberation Army marines, as well as a possible administrative hub as China cements its claim with a civilian presence, security analysts and diplomatic sources say.
The data from Earthrise Media, a non-profit group supporting independent media with imagery research, was based on surveys of high-resolution images obtained by DigitalGlobe satellites, dating back to when China started dredging reefs in early 2014.
The images show neat rows of basketball courts, parade grounds and a wide variety of buildings, some flanked by radar equipment.
Earthrise founder Dan Hammer said his team’s count included only free-standing, permanent and recognizable structures.
“When I look at these pictures I see a standard PLA base on the mainland – it is incredible, right down to the basketball courts,” Singapore-based security analyst Collin Koh said after reviewing the data and images.
“Any deployment of troops will be a huge step, however – and then they will need to secure and sustain them, so the military presence will have to only grow from where it is now.”
Senior Western diplomats describe the placement of troops or jet fighters on the islands as a looming test of international efforts to curb China’s determination to dominate the vital trade waterway.
Subi is the largest of China’s seven man-made outposts in the Spratlys. 

The so-called “Big Three” of Subi, Mischief and Fiery Cross reefs all share similar infrastructure – including emplacements for missiles, 3km runways, extensive storage facilities and a range of installations that can track satellites, foreign military activity and communications.
Mischief and Fiery Cross each house almost 190 individual buildings and structures, according to the Earthrise analysis. 

The previously unpublished data details the building count on more than 60 South China Sea features, including those occupied by Vietnam, Malaysia, Taiwan and the Philippines.
While the data shows well developed infrastructure on some on islands such as Vietnam's Spratly Island, the Philippines' Thitu Island and Taiwan's Itu Aba, the scale and development by Beijing dwarfs its rivals. (For a multimedia package on the data, click tmsnrt.rs/2J3cWne)
The number of buildings on Subi makes it similar in size to Woody Island in the Paracels, a Beijing-controlled group much closer to China also claimed by Vietnam.
Woody is the base and surveillance post which foreign military attaches say is the headquarters of the military division across the South China Sea, reporting to the PLA’s southern theater command.
Koh and other analysts said the facilities on Subi, Mischief and Fiery Cross could each hold a regiment - between 1,500 to 2,400 troops.
China’s precise intentions remain unclear and Chinese experts say much will depend on whether Beijing feels threatened by regional security trends, particularly U.S. activity such as its so-called “freedom of navigation patrols”.
China’s defense ministry did not respond to Reuters questions about the build-up on Subi or what the facilities could be used for. 
Beijing has consistently said the facilities on its reclaimed islands are for civilian use and necessary self-defense purposes. 

China blames Washington for militarizing the region with their freedom of navigation patrols.
Ding Duo, a researcher at the Chinese government-backed National Institute for South China Sea Studies, said Beijing needs a military presence in the Spratlys to protect its civilian infrastructure.
“As for how big that presence is depends on the threat assessment China has going forward for the Spratly Islands,” he said.
“The Spratly region faces severe military pressure, especially since Trump took office and increased freedom of navigation patrols. So China has raised its threat assessment.”

LOOMING TEST
The White House said this month it had raised concerns with China about its latest militarization after CNBC reported anti-ship cruise missiles and surface-to-air missile systems had been installed on Subi, Mischief and Fiery Cross.
This weekend, China revealed bombers had conducted take-off and landing training on some of its islands and reefs in preparation for what it called “the battle for the South China Sea”.
Some U.S. analysts noted PLA photographs appeared to show a bomber landing on Woody Island in the Paracels, and the Chinese military has yet to confirm planes actually landed on its Spratlys holdings.
On Wednesday, the Pentagon withdrew an invitation for China to join a major naval drill because of Beijing’s continued militarization of its islands in the South China Sea.
Admiral Philip Davidson, the nominee to be the next commander of all U.S. forces in the Pacific, said last month the bases were now complete and lacked only deployed forces.
“Any forces deployed to the islands would easily overwhelm the military forces of any other South China Sea-claimants,” Davidson told a congressional panel.
So far, repeated U.S. naval patrols close to Chinese features and growing international naval deployments through the region have had little obvious impact on Beijing’s plans.
“There is a real sense among Western nations that a new strategy is needed, but there is little sign anything meaningful coalescing,” said one senior Western diplomat familiar with discussions across several countries. 

“The deployment of jet fighters – even temporarily – will sorely test that lack of a cohesive response.”

Satellite photo dated March 28, 2018 shows Woody Island. 
Already large Chinese amphibious landing vessels and other ships have used the full-scale naval wharves at Fiery Cross, Subi and Mischief – pointing to what foreign naval officers describe as virtually a permanent presence throughout hotly contested waters.
Chinese forces are using their island holdings to police of what Chinese naval officers tell other navies is a “military alert zone” – an ambiguous term that both Asian and Western military officials say holds no basis in international law.
People briefed on recent Western intelligence reports describe an intensifying pattern of radio challenges to foreign military ships and aircraft delivered from Chinese naval ships and monitoring stations on Fiery Cross.
Australian officials recently publicized a “robust but polite” Chinese challenge to three of its naval ships plying the South China Sea en route to Vietnam.
Sources say such exchanges between Chinese and foreign militaries are far more frequent than is widely known.
“They have become the rule rather than the exception across significant areas of the South China Sea,” one person familiar with recent Western security reports told Reuters.
Ships and aircraft from India, France, Japan, New Zealand and rival claimants Vietnam, Malaysia and the Philippines have also been similarly warned, according to regional military officials and analysts.
With the claimed “military alert zone” having no basis in international law or military practice, foreign naval officials routinely stress they are in international waters and continue on their way.
Zhang Baohui, a Chinese security expert at Hong Kong’s Lingnan University, said Beijing was likely to be cautious about any offensive moves, such as the stationing of combat aircraft.
“Now the islands are complete, I think we will see a degree of caution in Beijing’s next moves,” he said. 

“Sustaining that presence so far from the Chinese coast is a massive undertaking, and I think the deployment of troops and jet fighters would really cross a threshold for China’s neighbors.”
U.S. military officials insist they are leaving little to chance, warning the bases are already helping China project military power into areas once dominated by its neighbors.
“In short, China is now capable of controlling the South China Sea in scenarios short of war with the United States,” Davidson said in his testimony last month.