We Can’t Depend on China for Our Economic Salvation
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We Can’t Depend on China for Our Economic Salvation

Last year, a Wall Street Journal op-ed from a member of the paper’s editorial board said a good deal more about our free-trade regime than I suspect its author intended: “Bad news, folks,” Joseph Sternberg sighed. “China’s not going to save us this time.” READ MORE from Nate Hochman: The Beginning of the End for the Soros Revolution? The specific subject of Chinese salvation — or, in this case, the absence thereof — was the U.S. economy, and, specifically, the looming possibility of a recession. “That, in a nutshell, explains why investors sank into a sour mood this week on the latest bad economic data from China,” Sternberg wrote. “Survey data exposed a deepening slowdown in manufacturing. Services, while still buoyant, are less so than in previous months. Urban youth unemployment is at a record high, above 20%, with college grads faring particularly poorly. The all-important property market continues to lag.” All that, in the face of a potential recession here at home, made “for a less fortuitous stellar alignment than the last time the U.S. suffered a major credit crunch, the 2008 global financial panic and ensuing Great Recession of 2009.” At the time, the Chinese government’s “supply-side stimulus with Chinese characteristics,” as Sternberg dubbed it, “was just what the U.S. economy needed.” Today, Americans might not be so lucky. The doom and gloom about the Chinese economy’s inability to rescue the U.S. from another recession — or, worse, its ability to pull the U.S. into a deeper recession — pervades Monday’s Western papers: “Will China’s slowdown pull the US into recession?” queried one headline in the Week. “At a time of economic weakness, no longer can [we] count on China to play its past role as the world’s main engine of economic growth,” wrote the American Enterprise Institute’s Desmond Lachman. Last year, the New York Times reported that “some are concerned that China could again fall back on encouraging exports to foster growth” — a “strategy” that “might succeed” for China but “could counteract efforts to resuscitate American manufacturing.”  What did not occur to most of the financial analysts hemming and hawing about Beijing is the question of why the U.S. had put itself in a position in which its economic fate was dependent upon the whims of a hostile foreign entity — or what that dependency might actually mean in the long term, particularly as the relationship between the two powers veers into more belligerent territory. The mythological virtue of free trade, so often extolled by the denizens of the Wall Street Journal and the American Enterprise Institute, is that the interdependence it breeds leads to reduced conflict and increased peace. (“Peace On Earth, Free Trade For Men,” declared the title of one report from the Cato Institute in December 1998.) Of course, that isn’t quite true — at no point in world history has trade between nations secured anything akin to world peace, or even the prospect of it. But more to the point, the utopian theory of a peaceful globalized economy never accounted for the substantial second-order effects of international interdependence: most notably, that it erodes a nation’s ability to control its own destiny and makes it more vulnerable to weaknesses caused by decisions made halfway across the world. This has been abundantly apparent, to anyone who cared enough to pay attention, since the outset of the modern free trade era. To many of the architects of that era, it appeared to be a feature rather than a bug. Less than a decade after NAFTA, the Bush administration’s ambassador to Canada, Paul Cellucci, was openly floating a “NAFTA plus,” replete with a “harmonization of border controls, law enforcement, energy, environmental and immigration policies” — i.e., transnational regulation, removed from the hands of the citizens of each respective country — and an end to the enforcement of borders between the three nations. “Cellucci,” Canada’s National Post reported in 2001, “suggested the borders between Canada, the United States and Mexico be dismantled with the aim of achieving a more fully integrated economy.” All this has been a bipartisan achievement — the brainchild of neoconservatives on the right and liberal internationalists on the left. Within the GOP, it is precisely those same forces that continue to serve as the largest source of opposition to the nationalist revolt launched by Donald Trump in 2016. Even now, the usual suspects — Americans for Tax Reform, the Competitive Enterprise Institute, the Club for Growth, and so on — are throwing their weight behind the push to sell U.S. Steel off for parts to a foreign corporate buyer. As it pertains to China, the same actors and organizations that originally pushed for our dependence on Beijing are now the sharpest thorns in the side of any serious effort to end it. By now, China’s manipulation of its trade relationship with the U.S. has been documented exhaustively: The Chinese government subsidizes its own industries while keeping costs low via the absence of any labor or environmental standards. Trump’s tariffs sought to address this discrepancy; all of the aforementioned groups sought to perpetuate it. Republicans in Congress — many of whom have long worked hand-in-glove with these groups — have a chance to do something serious here. The PROVE IT Act, which passed easily out of committee in January, is a smart example of economic nationalism in action — designed to leverage the relative cleanliness of the U.S. economy to our advantage, and the relative dirtiness of the Chinese economy to their disadvantage. The bill is designed to quantify just how much dirtier the cheap products China is unloading on our shores are compared to American-made alternatives. Once again, the same actors — as well as some well-paid lobbyists who claim to speak for the oil lobby, driven by the misguided conviction that the bill is some kind of progressive climate bonanza — are seeking to kill the legislation, urging the GOP to take the side of the business interests they represent. For once, Republicans should consider doing the people’s business instead. The post We Can’t Depend on China for Our Economic Salvation appeared first on The American Spectator | USA News and Politics.