The election year 2020 in the USA seems for many Western people to be decisive. Many hope that Trump is not reelected and Biden will bring back the golden old era and a reset of the tradtional transatlantic West and the liberal USA and benign hegemon. However, the times of engagement with China will be the past, whoever becomes president of the USA.
An article from the Atlantic about the readjustment of the Republican Party in Foreign Affairs and an SCMP article about Biden’s likely policy gives us an impression on the coming debate and readjustments of the US foreign and China policy. And the Europeans and especially the Germans should understand the US point of view about the Asian Pivot. The foreign policy of the Democrats to Europe won ‚t be just a simple reset of the good old times as the USA primarily has to counter China in the future.
The article „Will Trumpism Change Republican Foreign Policy Permanently?„published August 28, 2020 by Thomas Wright,Senior fellow at the Brookings Institution in The Atlantic analyses the different factions of the Republican Party and their likely influence on the coming US foreign and China policy. While only a minority of the former Republicans support the old Republican mantra of globalization, promotion of free trade, democracy and freedom, other more influential groups and factions of the Republicans prefer more congagement, state interventionist industry policy and more geopolitical great power categories instead of value-based democracy promotion. Of course corporate and business interests of the multinational companies still resist a decoupling from China or a decoupling of China from the US dollar as they still want to have access to the giant Chinese supermarket and will lobby for that purpose in the Democratic and the Republican party. During the engagement era, the business interests were dominant, but after Trump this won’t be possible more to this extent. The business interests will be part of, but not that dominant anymore in the congagement strategy. The Military- Industrial Complex (MIC) and the security apparatus will play a more important role in relation to the business interest than before. And there will be a trend to a more resilient, not that export-dependent economy. The USA has an export dependency of 15%, the EU 40%, China had 36% in 2010 and reduced it to 20%. Trump´s America First on the one side wants to bring jobs and outsourced productive industry back home, reindustrialize the USA, import less and export more to get a mercantilist trade surplus, however, the goal won´t be to make the USA a primarily export-driven and dependent world power. And it remains to be seen if the relocation of the outsourced industries and multinationals „back home“ will work. The programmatic article „How to Make Trade Work for Workers – Charting a Path Between Protectionism and Globalism“ by Robert E. Lighthizer published in July/August 2020 in the Foreigns Affairs explains the main difference between the engagement, The Washington Consensus and the old freetrade policy oft he former Republican and Democratic governments and the congagement policy and America First economic nationalism of the Trump administration:
„The new coronavirus has challenged many long-held assumptions. In the coming months and years, the United States will need to reexamine conventional wisdom in business, medicine, technology, risk management, and many other fields. This should also be a moment for renewed discussions—and, hopefully, a stronger national consensus—about the future of U.S. trade policy.
That debate should start with a fundamental question: What should the objective of trade policy be? Some view trade through the lens of foreign policy, arguing that tariffs should be lowered or raised in order to achieve geopolitical goals. Others view trade strictly through the lens of economic efficiency, contending that the sole objective of trade policy should be to maximize overall output. But what most Americans want is something else: a trade policy that supports the kind of society they want to live in. To that end, the right policy is one that makes it possible for most citizens, including those without college educations, to access the middle class through stable, well-paying jobs.
That is precisely the approach the Trump administration is taking. It has broken with the orthodoxies of free-trade religion at times, but contrary to what critics have charged, it has not embraced protectionism and autarky. Instead, it has sought to balance the benefits of trade liberalization with policies that prioritize the dignity of work(…).This powerful consensus should last, because it is rooted in deeply held values. Where trade is concerned, most Americans want the same thing: balanced outcomes that keep trade flows strong while ensuring that working people have access to steady, well-paying jobs. Neither old-school protectionism nor unbridled globalism will achieve that. Instead, as the United States confronts future trade challenges, it should chart a sensible middle course—one that, at long last, prizes the dignity of work.
While Democrats blame Trump that he split the country by hate speech, xenophobia, racism and sexism, Trump says that the globalists in the Democrats and the Republicans have split the country by free trade leading to deindustrialization, shrinking of the middle class and the working class for whom the American dream becomes unachievable. Therefore Trump promises that the American dream for every American to become middle class or rich upper class or to have a well-paid working-class job becomes reality again. Trump´s economic nationalism perceives the American people as a totality being exploited and ripped off by foreign countries, be it China or the EU or Germany. Trump creates an economic people´s society (Volksgemeinschaft) in which the Americans from big business to the middle and the working class are victims of the globalists and free traders of the Democrats and the Republicans and the establishment. And Trump also promotes US American „exceptionalism“- not that much on the soft power or democracy or value-basis, but more on the American hard power and a new interpretation of US American soft power with the prosperity promise for all Americans.Therefore they have to unite and fight Therefore engagement with China has to be stopped and replaced by congagement or even containment.
An outdated model for engagement is Henry Kissinger who in his conversation with Graham Allison about China at Harvard University proposed that the USA should engage China by investing in its New Silk Road and its Asian Infrastructure Investment Bank (AIIB), focus on nuclear proliferation, especially North Korea and to come to a compromise about Hongkong, Taiwan, the South and the East China Sea. This sort of engagement model as that of the time of Bush sen. Clinton, Bush jr. and Obama is definitely dead. It is so dead as Zbig Brzezinski´s idea of a G 2, a Sino-American alliance, which would control the world, as now such a G 2 could only emerge if China would submit substantially under the world power USA. And the G 2 idea had also the error that China and Russian are promoting a multipolar world in which the USA is just one center and one pole. John Mearsheimer´s ideas are also not about a Sino-American G 2 control of the world, but about a tripolar multipolar world of great powers in which the USA could ally with Russia against China. But he sees this only as a coming option and not as an automatism. Trump also wants like Mearsheimer make a US-Russian alliance against China as can be seen in his proposal of an anti-Chinese G 11 including Russia. While Trump thinks in a short-term perspective with a deal, Mearsheimer is thinking in a mid- and longterm perspective.
However: Engagement with China is seen as making the strategic competitor stronger, „feeding the beast“ and bringing down the US superpower. The common sense between Trump, the Republican and the Democrats is that engagement with China was a big mistake. Now the discussion is more between congagement and containment. The former engagement supporters are now shifting to congagement to save some elements of engagement, especially the business elites and the political lobbyists connected with them.Engagement was not the fault of the USA alone. The West had many ideological illusions about free trade, globalization, democratization and engagement of China. Starting with Nixon/Kissinger and Helmut Schmidt. However, Nixon’s engagement policy with Mao-China only started after the Soviet Union rejected his idea of a joint military strike against China´s nuclear facilities to prevent that it could become another important nuclear power. Afterward, he perceived China as the most important instrument in his anti-Sovjet axis and as a solution for the Vietnam war. But times are changing.
The apologets of „democratic peace“ and „capitalist peace“ have become silenced. According to the democratic peace theory, world peace would be achieved if all countries in the world would be democracies and Fukuyama´s teleological end-tiume manifesto „The End of History“ had this vision. Capitalist peace claimed that world peace would be achieved if all countries in the world were capitalist countries and would focus on free trade and business instead of military and war. However, these assumptions are now openly questioned. Some also make the argument that WW 1 was a world war between capitalist countries and that the previous globalization and free trade at this time didn´t prevent the war. This was also the argument of the democratic peace supporters against the capitalist peace theory and the democratic peaceniks called for regime change of authoritarian regimes like the CCP or saw in the economic rise of the middle class a sort of historic materialism for the inevitable rise of global democracy and world peace by a global liberal middle class. As in the historic materialism of communism the historic subject leading to a peaceful world society and a worker´s paradise on earth worldwide was the working class, in the historic materialism of the liberal democratic peace theorists it was the middle class as historic and teleological subject. Democracies wouldn´t fight wars against each other and be peaceful free traders. An assumption which is now also questioned by the offensive realism school of John Mearsheimer and by people who also question the assumption that capitalism means cooperation and peace , but point out that capitalism means more competition and conflict, trade wars and even wars in the end. Locke is out, Hobbes and the Leviathan is in.
John Mearsheimer´s offensive realism sounds a little bit like the Marxist analysis of Lenin about WW 1 „Imperialism as the highest stage of capitalism“. Even if Lenin made some theoretical mistakes as to see policies only as a fight between economic monopolies and as state-monopoly capitalism, but the uneven development of the world economy, economic and great powers and the system- inherent crisis of capitalism, the rise of new great powers is very similar to the analysis of Mearsheimer´s offensive realism with the exception that for Mearsheimer the economic system is not important, but just the state power relations. According to Mearsheimer wars can happen during an economic crisis and an economic boom, that´s not important, but the uneven development of great power relations is a key factor for war or even a world war. And even communist countries had conflicts and wars with each other like the Sovjet Union and China, Ho Chi Minh- Vietnam and Pol Pot-Cambodia or China and Vietnam as the central factor would be the competition as nation-states against each other. Lenin, Trotzki and the Communist International saw the roots of WW 1 in the capitalist system, saw it as a capitalist war and therefore wanted to have a communist world state without capitalism, but with a planned world economy that had an even development and no conflicts and wars anymore. Later Marxist had an economic crisis- fascism/protectionism and trade war– war- model, which might have fit to the historic development of WW 2 and the Black Friday 1929 as described in the analysis of Eugen Vargas, but not to WW 1 when the capitalist great powers and the world economy at that time experienced an economic boom and globalization. Therefore this capitalist war theory had also its flaws. However, China has become a capital net exporter since 2006, has an overproduction crisis which it tries to channel by its New Silkroad, is expanding economically and militarily and fits very well to Lenin´s and Luxemburg’s model, especially since the Sinoamerican conflict is escalating continuously and could even lead from trade war to financial war to a real war as the US and Chinese elite are already discussing the so-called „Thucydides trap“, wars between rising and declining powers, in the particular case a Sino-American war between the net capital importing and declining imperialist power USA and the net capital exporting rising imperialist power China.
And it is interesting that the democratic peace theory and the capitalist peace theory were also in conflict with concrete history. The First World war was a war between capitalist countries on the one side, but not a war between dictatorships and democracies on the other side. The authoritarian systems of German, Austrian and Ottoman Empires and monarchies were fighting a war against the democratic USA, France and British Empire in alliance with the authoritarian Russian Empire. Geopolitics trumped values. In the Second World War it was not democracies and/ or capitalist countries against communism and authoritarianism, but an alliance of the capitalist and democratic USA, France and British Empire in a war alliance with the totalitarian and communist Sovjet Union against fascist and capitalist Germany, Italy and Japan. It is interesting t see that both theories survived the wars and became ideological guidelines for teleologic, democratic and capitalist end- time philosophers and politicians. These schools are now in a defensive position.
Some Republicans even say that it doesn’t matter if China was under the rule of the CCP or a democratic government, but that it in each case was an adversary of the USA as a world power. This political position is in accordance with the “ offensive realism“ of John Mearsheimer who only sees the competition between nation-states and great powers independent from their political system and even claimed that the paradigm that democratic states couldn´t fight wars against each other, but only dictatorships against democracies is the past and not the future. Even a democratic China could come to war with a democratic USA as a authoritarian China could also come to a war with an authoritarian USA or a democratic China with an authoritarian USA. It just doesn´t matter. According to Mearsheimer, it is not a matter of a democratic or Communist China, but just the existence of China as a rising great power. And that Chinese exile dissidents and Chinese democrats are claiming that a democratic China would be even more prosperous and more successful, is even more threatening to the ears of offensive realists. Regime change and democratization of China is not the goal, just the submission of China as a great power under the world power USA, be it democratic or Communist. Only after this sustainable submission, there could be the chance for a reengagement, but that´s for this school of thinking a distant perspective. And for the Mearsheimer Republicans, the mantra is not Clinton´s free trade slogan „It´s the economy, stupid“, but „Security trumps economy“.
From the 90s till 2000s the world economy and the West was experiencing a unprecedented globalization and hi-tech boom and also NATO and EU expansion, NAFTA, BRICS, emerging economies everywhere,the 100 days crash privatization program of US economist Jeffrey Sachs in Russia, a seemingly neverending golden age and success story. Neoliberalism, the Washington Consensus, privatization, deregulation, outsourcing, globalization, free trade, multilateralism were mainstream. But already the Asian crisis in 1997 and the New Economy crisis in 2000 was the first omen that the globalization boom of the 90s and 2000s was weakening, especially since Keynesian economist Paul Krugmann correctly analyzed that the Asian crisis was the first time that an industrialized country of the center of world capitalism was hit: Japan and he predicted that the next crisis would no longer come from the periphery of the world economy like the limited debt crises of the former Third World in the 70s and 80s, but would now emerge from the centers and metropolis of world capitalism, the USA and the EU. However economic and liberal globalists saw China’s WTO accession which subsequently generated a real takeoff of the Chinese economy, enlarging it from 4% of world trade to 20%, as the next milestone for a neverending globalization boom. And the next free trade areas were planned as TTIP and TPP: But the Iraq war2003 lead to enormous US state debts as it was not financed by taxes and also militarily and politically neutralized the unipolar momentum for George Bush sen. and now Bush jr.´ aspirations for a New World Order as Charles Krauthammer or Fukuyama with his End of History called it. However, this is not the economic reason for the financial crisis. The world markets, especially the emerging markets were saturated, there were signs of a global overproduction crisis. The US government tried to channel the overaccumulated US capital which found no sphere of profit rate and expansion anymore by a combination of deregulation of the real estate market and state subsidies by state agencies like Fannie Mae or was sold and distributed to stupid European banks,. The oversaturated capital flew in the subprime credits to give every American the American drean in form of a house to rent or to own or to sell for higher profits. However, the real economy with its overproduction and the effect that many people couldn´t pay back their subprime credits lead to the situation that the whole outlet system for the capitalist overproduction crisis collapsed. And was not just a question that the US state didn’t rescue Lehmann Brothers as many neoliberal economists want to tell the world or to blame the state and Fannie Mae.
The financial markets are not a sphere that exist alongside and above the real economy and may even put it under pressure or force it to act irresponsibly, but rather meet real economic interests (e.g. originally to meet the increased demand on the US real estate market). The capitalist is compelled by competition to use the instruments of the financial markets. Their shape is determined by the real economic development, not the other way around. The crisis began in 2005 on the American real estate market as a real economic one: newly built houses could no longer be sold, the market contracted and refinancing became more difficult. As a result, the financial market got into its first crisis, which spread worldwide through refinancing. At the beginning of 2008, there was a worldwide overproduction crisis, only at the end of 2008 the crisis in the financial markets. Economic stimulus programs followed, but came up against limits and lead to the government credit crisis. It was just a result of the real economy and also the global overproduction crisis in the real economy and its effects on the financial bubble. All these culminated in the 2008 financial crisis, which was mainly a Western financial crisis and not an Asian financial crisis while China and most parts of the world were facing an overproduction crisis and partly because of this China pushed the Chinese BRI/ New Silk Road and a hi-tech industrial policy Made China in 2025 while Obama already proclaimed the Asian Pivot and TTIP and TPP as economic NATO against China. But humanitarian wars of intervention, and the debts for the Iraq war were not the main economic factors for the decline of the US power, but also the engagement policy that made it possible for China to join the WTO and experience its meteoric rise why many politicians and Trump demand that engagement is to be replaced by congagement or even containment. The limits of US power also became apparent after the Iraq war, when the slogan of Robert Gates‘ military strategy since then became: No boots on the ground! Airseabattle and Off-shore Control are a logical consequence of this.
While China tries to build up its military muscle, it also tries to transform its economy for a „protracted-war“ and the USA tries to build an Asian NATO against China:.
In his SCMP article „Under US pressure, China is planning an economy that can survive a protracted war“ published 15 Aug, 2020 Wang Xiangwei writes:
The prospect of all-round confrontation with America has invoked a Mao-era fighting spirit that is the driving force behind China’s 14th five-year plan
Beijing’s vision of a ‘dual circulation’ economy is likely to emphasise technological self-reliance and growth targets based on quality, not quantity“
In his article „US seeks formal alliance similar to Nato with India, Japan and Australia, State Department official say „published 1 Sep, 2020 Robert Delaney writes:
„Washington’s goal is to get countries in the Indo-Pacific region to work together as a bulwark against ‘a potential challenge from China’, says the US official
He says the four nations are expected to meet in Delhi sometime this autumn
However, the new view of parts of the Republicans following John Mearsheimer’s „offensive realism“ which only sees China and the Chinese, be it Communist or democratic or whatever as a rising nation-state and great power and as the threat to the USA is mirrored in the comment by Alex Lo „Why China and the US can’t be friends anymore“ published 23 Aug, 2020 in the SCMP who could be called a Chinese offensive realist and Chinese Mearsheimer:
„China’s real offence is not its lack of democracy or in-name-only communism, but its embrace of global capitalism that has co-opted foreign technologies and spread supply chains across the world economy (…)
What Washington wants from China – what the West had wanted since the 18th century – is an open and unrestricted market for foreign interests to plunder, not for the Chinese to exploit a liberal global economic order to co-opt Western technologies and extend supply chains worldwide like tentacles.
That is what the US will not tolerate, even if it means war.“
It´s just the USA versus China, independent if it was a democratic or communist China, just the categories of hard power of great powers are important. But this is the most extreme point of view in the political discussion of the Republicans.
The article „Joe Biden faces pressure to separate China trade policy from Donald Trump’s in US election“ in the South Cina Morning Post (SCMP by Finbarr Bermingha published1 Sep, 2020 analyzes Biden´s likely trade policy towards China:
„Americans feel more negative about China than ever before, yet healthy trade ties with the world’s No 2 economy remain surprisingly popular among US voters
Biden faces challenge in differentiating his China trade policy from Trump’s, with ex-White House aides expecting tactical changes rather than an overhaul.
At the start of August, a Joe Biden presidential campaign aide rushed to clarify comments the candidate gave in an interview with National Public Radio, which some news outlets interpreted as saying he would remove Donald Trump’s tariffs on Chinese goods.
Biden “would re-evaluate the tariffs upon taking office”, the aide insisted, and had not in fact committed to removing them. But the scramble to counter the suggestion that he might be weak on China – or weak on trade – shows the challenges Biden faces in running against an antitrade, anti-China incumbent.“
Whoever is elected, Trump or Biden, Trumpism has shifted the US foreign policy to China sustainably from engagement to congagement or even containment. The last two options and their concrete form will be the only difference between the two parties after Trump. What does it mean for the EU and Germany. Both are still more engaged in engagement with China, multilateralism and value-orientated. If Trump is reelected, he will push the new congagement consenus even more to containment and an escalation of the Sino-American conflict. Some Europeans say that the EU and Germany should say Values First. but Trump doesn’t care about values. And Merkel and the rest of the EU to a very minor degree. The best both sides could have a common sense is a transatlantic dialogue and consensus on a new congagement policy. Neither Germany nor the EU has the potential or interest in a containment policy against China and even the USA might have not.
So the specific question would be how Germany and the EU, with their vocal commitment to values, can bring their policy together with the at best only tactical commitment to values of Trump or his administration. Engagement, automobiles and exports first won´t be the transatlantic consensus, even if the EU and Germany have an export dependency of 40% while the USA only has 15%, but Values first also does not mean the real-political future as both are very opportunistic and pragmatic already in this sense. It makes more sense to discuss the real transatlantic consensus of a new Congagement policy and its concrete form after November 3rd between the USA and the EU. And if Trump is reelected it remains to be seen, if he is more a supporter of Congagement or of Containment, even escalating the trade war with China to a financial war and military posturing that in the end could even provoke a Sino-American war.