Beijing’s export controls announced in October are the economic equivalent of a 1950s nuclear weapon test, demonstrating both its possession and willingness to use this ultimate economic weapon to impose global economic domination. This was not the first time that Beijing flaunted its economic superweapon. Hardly recognized by anyone in the United States, the ban came in reaction to US Commerce Department China hawks' announcement of new technology export bans targeted primarily against China.
Power and security have always rested on economic foundations. Slavery and the industrial revolution made the European colonial era possible. Japan’s defeat in its Pacific War was dictated by the reality that it’s GDP was one-tenth that of the United States. And, as the country lacked a modern economy, the Russian revolution was won on the slogan of “Bread and Peace.”
What we do know is that October’s economic confrontations were not the first ones. We would be foolish to think of them as the last.
This century’s economic and technological developments have been no exception. China now holds the US Seventh Fleet, which has guaranteed US dominance of the Pacific Ocean—"the American Lake”—at risk from its aerial denial missiles and massive naval fleet. Russian-Ukraine drone warfare, now augmented by AI coordinated drone swarms, and by the integration of AI and cyber warfare, now place conventional military and nuclear forces at risk. So too, essential civilian infrastructures, which place water and electrical supplies at risk.
Two recent New York Times articles illuminate the Trump administration’s chaotic and contradictory responses to China’s rise and power. “Trump’s Two Minds on China Sow Chaos” related that Trump complained that China’s “’unheard of’ controls on rare-earth minerals were ‘sinister and hostile' and a moral disgrace.” Then, days later, Trump reversed course urging markets and voters not to worry about China and saying, “It will all be fine.” As the Times wrote, Trump; “has repeatedly seesawed between retaliation and reconciliation, rattling markets, sending businesses scrambling, and leaving questions about whether he has a larger strategy.”
The second article pointed to the reasons that Beijing imposed its strict limitations on rare earths, rare-earth metals, and small motors. scheduled to go into effect on November 8, after the scheduled Trump-Xi jinping tete a tete at the Asia-Pacific Economic Cooperation summit. With Trump and his most senior advisers focused on the Gaza ceasefire talks, sending troops to occupy Democratic-led cities, and the government shutdown, China hawk officials at the US Commerce Department slapped a new export ban on US technologies aimed primarily at China.
Some people never learn. After last spring’s unsuccessful attempt by Washington to radically decouple the US and Chinese economies through 145% tariffs, Trump and Xi negotiated a truce that reduced tensions. Back then, China responded with 125% tariffs on US products and signaled the possibility of export restrictions of seven rare earths. In the tradition of TACO (Trump Always Chickens Out), Trump backed down. During the truce, the TikTok dispute was amicably resolved, with Trump billionaire cronies as the primary beneficiaries. The current crisis was largely Made in America. Caught off guard, China was taken by surprise by the additional attack on its economy and responded with the rare-earths ban. It did not initiate the crisis. With its renewed rare-earths threat to the US and world economies, Beijing gained Trump’s attention, which has led to further escalation of the crisis with Washington’s announcement of a new 100% potentially decoupling tariff.
Regardless of the outcome of this trade confrontation, it reflects a major difference between the new US-Chinese Cold War and the US-Soviet Cold War of the last century. This is an era of Mutually Assured Economic Destruction as well as Mutual Assured (Nuclear) Destruction.
In this context, Nobel Prize economist Paul Krugman concludes that “China has overtaken America.” Its economy in real terms is “substantially larger than ours,” and its economic dynamism is demonstrated by electrical generating capacity more than twice US generation. He advises that the US is “in danger of being permanently overtaken by China’s technological and economic prowess,” an outcome compounded by Trump’s denigration of scientific research and his assaults on the US education system.
Psychologically and politically unable to embrace former President Joe Biden’s multibillion-dollar commitments to semiconductor and other advanced technologies, Trump is opting to emulate the Chinese model. With his unquestioned dominance over the Republican Party, Trump is tilting away from free markets. In the tradition of state capitalism, the US government is taking stakes in companies that produce resources thought to be critical to national security in order to gain greater control over what they produce. The list begins with the chip maker Intel, US Steel, and MP Materials, a rare-earth mining company. And using the China threat as political cover, Secretary of Commerce Scott Bessent has announced price controls to contain tariffs-driven inflation.
What we do know is that October’s economic confrontations were not the first ones. We would be foolish to think of them as the last. And we appreciate the hardships endured by Indigenous Kwakiutl peoples whose leaders reportedly competed for power by demonstrating who could burn the most of their community’s resources.
Maintaining the American Lake
The political and imperial histories of the 21st century’s two greatest powers differ significantly and should be factored into our understandings of current US tensions and the dangers of military—possibly nuclear—escalation. A comparatively new nation, driven by white Christian manifest destiny, expansionist Americans conquered and began colonizing their continental empire by the end of the 19th century. The US imperial age began with the Spanish American and Philippine Wars between 1898 and 1903 when it acquired Philippines, Guam, and Samoa—steppingstones to the holy grail of capitalism, the China Market—and its Caribbean conquests. Washington’s Asia-Pacific empire expanded with the defeat of Japanese aggression in 1945 and the transformation of the Pacific into an “American Lake.” Since then, the US has initiated more than 200 wars, military interventions, and foreign military operations—the most devastating being the failed Indochina War which cost the lives of up to 6 million Vietnamese, Laotians, and Cambodians and 58,000 Americans. Despite fears of falling dominoes, the extensive infrastructure of hundreds of military bases that extend from Korea and Japan to the Philippines, Guam, and Australia, remained intact after the imperial defeat.
For centuries, the Chinese empire was the world’s most advanced society and was not based on military conquests. Through a series of wars over two millennia, China gradually consolidated its largely Han continental empire. The Taiping Rebellion of the 1860s and its revolutionary civil war were devastating military conflicts that claimed millions of lives, but for the most part Beijing’s strategy has been to surround, isolate, and demonstrate overwhelming power to bring its military rivals to heel without resorting to war. We see this playing out today in its campaign to enforce reunification with what is perceives as its rogue Taiwan province, in its territorial claims across the South China Sea, and its massive military buildup. Unlike the US, China last fought a war—against Vietnam—47 years ago. Chinese continental consolidation began with the Han dynasty 2,500 years ago, its tributary system, originating in the eigtth century Tang Dynasty, if not before. It continued through the Ming and Qing dynasties from the mid-1600s until its 1912 Republican revolution. Central to this system was the belief that China was “culturally and materially superior to all other states” and required those who wished to trade or otherwise interact with China to kowtow to the emperor.
Today, nuclear MAD hangs over US-Chinese military confrontations. The dangers of an accident, incident, or miscalculation increase with US and Chinese naval and air force confrontations around Taiwan and in the South China Sea. To reinforce US hold on the “American Lake,” both Biden and Trump have relied on Washington’s Indo-Pacific alliances, its dispersed military bases, and deployed intermediate range missiles and missile defenses with their first-strike roles to nations on China’s periphery. Since the mid-19th century Opium Wars, China’s greatest vulnerability has been invasion from the sea. This helps to explain its relatively recent imperial claims to 80% of the South China Sea. These claims are contested by five other nations, and have led to military clashes with the Philippines and Vietnam. To protect its economically vital coastal cities and its claims to the South China Sea through which an estimated 40% of world trade transits, Beijing has engaged in a massive naval buildup and transformation of South China Sea sand bars and islets into (albeit vulnerable) military bases, particularly after US nuclear-capable aircraft transited the Taiwan Strait during the 1996 Taiwan crisis.
Rather than a G-2 US-Chinese condominium determining the region’s future, small states and civil society must be engaged in building the region’s common security order.
China, which cannot forget US nuclear threats in 1955, ’58, and ’96, and Russia’s 1969 threats, has been adding an estimated 100 nuclear warheads per year to counter the perceived growing threat from the US, with China’s smaller minimum deterrent nuclear arsenal increasingly vulnerable to US precision nuclear armed long and intermediate missiles and missile defenses. At the same time, Beijing is motivated by the geopolitical goal of achieving nuclear parity with Washington and the Kremlin. To illustrate the growing nuclear danger and increased complexity of possible future arms control diplomacy, one former US arms control negotiator describes the situation as the world being held hostage by “three scorpions in a bottle.”
The US lattice-like network of Indo-Pacific alliances is now challenged by the increasingly alliance-like Shanghai Cooperation Organization, led by the Chinese-Russian-North Korean alliance. When Chinese, Russian, and North Korean leaders, and others met to commemorate the 80th anniversary of the end of World War II and to honor their wartime sacrifices with a massive military parade, Trump reacted on his Truth Social network with contempt, posting: “Please give my warmest regards to Vladimir Putin, and Kim Jong Un, as you conspire against The United States of America.”
Elbridge Colby, the former CIA director’s grandson and Trump 1.0 deputy assistant secretary of defense, now serves as undersecretary of defense for policy. While he hedges on US commitments to defend Taiwan militarily, he reportedly believes that preventing Beijing’s rise to global dominance requires the Pentagon to do everything possible to reinforce US dominance in the Indo-Pacific. To reinforce this stage of the US military pivot to Asia and the Pacific, Colby has advocated reducing US support for Ukraine and scaling back troop deployments in Europe and the Middle East. That said, opposition within the Pentagon to European troop reduction has reportedly blocked finalization of Trump’s National Security Strategy and its Global Posture Reviews.
Consistent with Colby’s approach, the Trump administration has prioritized Taiwanese self-defense over US intervention should Beijing opt to reunify its “rogue province” by force. As Colby has written, “To make Taiwan defensible, America must focus on preparing for Taiwan’s defense and Taiwan must do more.” This begs the question of which of the two is Trump’s preferred option. He could remain committed to defending Taiwan, although the Biden administration concluded that this could only be done via a US nuclear first-strike threat which could lead to a thermonuclear exchange. Alternatively, Taiwan could be forced to assume complete responsibility for its defense, with US priority being sale of more advanced weapons to the autonomous democracy. Trump appears to prefer the latter, having demanded that Taiwan increase its military spending to 10% of its gross domestic product.
Trump’s ambiguity, which is part and parcel of his transactional approach to dealmaking, comes as no surprise given his skepticism of the importance of Taiwan to his perception of US interests. While he tries to strong-arm Taiwan’s strategically vital chip industry with construction of production facilities to the US, he frequently questions the island’s military dependence on the US and described the island as a “freeloader.” Before the current US-China trade confrontation, Trump even reportedly paused a new round of US military assistance to Taiwan in pursuit of a trade deal with China.
Despite China hawks’ hysteria, designed in part to unify a deeply divided nation, it should be noted that China’s priorities are domestic and international stability. China would want to take, not destroy, Taiwan to limit casualties and to limit infrastructure damage. It wants a quick victory to avoid domestic instability. Beijing’s preferred route is to win Taiwanese hearts and minds, primarily via Taiwan’s growing economic dependence on the world’s largest economy, and to achieve reunification and an end to China’s civil war. Invading Taiwan would cost China dearly: loss of international markets, diplomatic isolation, and the possibility of years of resistance and possible armed insurgency. Taiwan is not Hong Kong. But, while the vast majority of Taiwanese no longer identify as Chinese and favor achieving independence in the future, few are willing to fight and die for it. There are expectations that a surprise air and naval assault by China could lead to Taiwan’s defeat in the first 24 hours, before the 7th Fleet could come to its rescue.
That said, we also know that the $2 trillion upgrade of US nuclear weapons and delivery systems, begun during the Obama administration, backed by the military-industrial complex and Congress, is primarily focused on China. There are also Trump’s words to the widow of assassinated right-wing Japanese Prime Minister Shintaro Abe that he “won’t let China take Taiwan.”
One senior Democratic strategic analyst put it well, saying that Trump has no strategic vision, and that we should not “discount Trump’s transactualism as an opportunity, nor his need to dominate. He has no strategic vision, hence his focus on tariffs.” And, not wanting to be outdone by Barack Obama, the first Black president, this transactional son of a Ku Klux Klan real estate magnate lusts after a Nobel Peace Prize, not war with China.
Divisions within the administration reflect Trump’s own contradictions. Some “America First” officials advocate returning to regional blocs reminiscent of the balance of power Concert of Europe which maintained a fragile peace for a century while imperial competition focused on colonizing the Global South. This faction is less committed to the Biden era lattice-like US Indo-Pacific alliances. We saw their influence in the massive tariffs imposed on India, after successive presidents courted New Delhi as a potential ally to offset China’s growing power. This clique forced a review—apparently unsuccessfully—of the AUKUS (Australia, Britain, US) alliance commitment to providing Australia with nuclear submarines, and US troop reductions in its hundreds of Indo-Pacific bases.
For the moment, traditional military imperialists are demonstrating greater influence. Secretary of Defense Pete Hegseth, the former right-wing TV personality, who installed a makeup room In the Pentagon, and Secretary of State Marco Rubio signaled their commitments immediately after coming to office. They traveled to South Korea and Japan where they reaffirmed commitments to their alliances, and US warships were sent to transit the Taiwan Strait.
War or Peace and Prosperity?
As former Assistant Secretary of Defense and influential Harvard Professor Graham Allison wrote, humanity is caught in a Thucydides Trap, the inherent conflict between rising and declining powers that has too often, but not always, culminated in catastrophic wars. World Wars I and II were initiated by the rising German and Japanese powers, and the pattern stretches back to the Pelopenesian War two millennia ago. The US-Chinese trade war undermines the economies of both nations, jeopardizing their peoples’ and others’ security and life chances. And accidents and miscalculations happen. Remember the 2001 US collision of a US signals intelligence plane with a Chinese fighter jet which resulted in the pilot’s death. That sparked an intense US-Chinese confrontation which was deflected by the need to respond to the September 11 terrorist attacks on New York and Washington, DC. Remember too the mistaken 2018 nuclear alert that panicked Hawaiians, or the 1983 near catastrophic Able Archer nuclear alert. Miscalculations? Think also about Germany and Japan in the 1930s and 40s, the US in Vietnam, and Russia’s invasion of Ukraine.
We are also blessed with the paradigm that reversed the spiraling US-Soviet nuclear arms race and served as the foundation for the end of the US-Soviet Cold War. As the intensity of their competition and preparations for thermonuclear war escalated, Swedish Prime Minister Olof Palme convened senior Soviet, European, and US officials and others to create an off-ramp from nuclear Armageddon. They found it in the concept of Common Security, recognition that a nation cannot be secure if its actions threaten its rival. Tough-minded negotiations featured strategic empathy, in which rivals named and addressed what led one another to develop, deploy, and threaten use of weapons that ultimately threatened mutual assured destruction. With the Palme Report as its intellectual foundation, the Intermediate-Range Nuclear Forces Treaty was negotiated, ending the Cold War two years before the fall of the Berlin Wall. And from the Paris Treaty through the NATO-Russia Founding Act common security served as the foundation for the first two decades of the Post Cold War, enduring until it was undermined by NATO’s expansion.
The Common Security in the Indo-Pacific RegionCommon Security in the Indo-Pacific Region report, issued a year ago, illustrates that the paradigm can also be used to reverse the US-China Cold War.
At the forefront of the new report’s recommendations are renewed commitments to common security diplomacy. Tensions in the Taiwan Strait must be reduced with shared recognition that Taiwan’s future cannot be determined by military means, that provocative military actions by all parties should cease, and that the One China doctrine must be respected by all sides. Former US Naval War College professor Lyle Goldstein has gone further, saying that the US should cease arming Taiwan, which over time would lead to cross-straight trust building within the context of the One China policy.
The South China Sea, where US and Chinese warships and warplanes have come close to repeating the 2001 collision, should be demilitarized and denuclearized. As former US Ambassador Chas Freeman has said, “Let the people of the region sort it out. We shouldn’t.” Provocative military operations should cease, as should the construction of new military bases. The region’s nations can engage in bilateral and multilateral negotiations for a South China Sea Code of Conduct.
No First Use nuclear weapons doctrines should be adopted and nuclear weapons-free zones created. And rather than a G-2 US-Chinese condominium determining the region’s future, small states and civil society must be engaged in building the region’s common security order.
As the Proverb has it, “A people without vision will perish.” The vision exists. The question is if there is a will.
