This is the next of two components. Learn part one,’ US needs a solution to China’s trouble.’
China, the country’s production power, is piling on nevertheless more production capacity. In what some experts refer to as the next China impact, different nations are concerned about losing their manufacturing bases.
To prevent over-reliance on China in manufacturing, if the US labor with like-minded places or go it alone? In my previous blog, I promised to address that concern in this one. Two passages are included below that serve as a framework for the discussion.
The first is from Princeton University professor and expert on international relations Aaron Friedberg, who writes in Foreign Affairs that” no country only can prevent or contain the upcoming second China shock.” In other words, we have no choice but to work with other states.
The second is from Lord Palmerston, a 19th century American statesman:” Regions have no lasting friends, merely continuous interests”. In other words, nations that are actively fighting China could choose to side with them later.
Contemplate in the abstract two ways to avoid over-reliance on another nation by approaching the argument from a different perspective. One is to make products internally – self-sufficiency. The other is for many nations to produce them, perhaps your country is one of them, perhaps no, but due to the variety of suppliers, you can count on them.
This second method is illustrated by China’s grain procurement. China produces less than 20 % of the beans it needs despite having many species to serve. The US was the main cause of the nation’s beans back then. Then, fearing over-reliance on us, China extremely imports from Brazil and to a lesser degree Argentina.
China is also motivating Russia, a neighbor with geopolitical favors, to grow more beans. More manufacturers reduce the chance of being fired if a strong supplier declines to buy during a crisis.
What if multiple suppliers do n’t exist? What if one nation’s creation is so dominant that it is threatening to overtake its rivals, as China has done with solar panels and other goods lines?
Friedberg’s answer: To assure several manufacturers, concerned countries may band up in a” trade protection partnership” and harmonize their production subsidies and their tariffs on Chinese products. New alternative suppliers would receive the security and incentives they need to invest in new productive capacity if there was a unified price wall and organized business policies.
Friedberg envisions the US and its allies playing key roles in the coalition, but that does n’t mean we’d produce everything. The goal is merely to encourage” the development of creative capacity for a wide range of created goods,” making it clear that China is not the only or dominant supplier of products or weapons “essential to the functioning of contemporary economies and societies.”
On this, Palmerston students had problem Friedberg. ” If you do n’t want to be reliant on another country”, they’d argue, “would n’t it be better to make the product yourself? Coalition friends may be enemies tomorrow.
They’ve got a place. Locations can be as volatile as enthusiasts– and as deceptive. Germany and the Soviet Union quietly agreed to divide northern Europe in 1939 by signing a non-aggression agreement. Germany launched a large defense assault on the Soviet Union in 1941.
But perhaps accepting that history is replete with such deceits, there’s also an argument for Friedberg’s business security alliance. By encouraging the development of manufacturers in several countries, the alliance would recreate the safety-through-diversification China enjoys in soybeans. It’s unlikely all of your “friends” will turn against you at the same time.
Another reason to think about joining a coalition is that the US lacks the industrial base to produce everything it needs in the long run. Washington has already requested that Japan produce Patriot missiles. The Navy is flirting with Korean and Japanese shipbuilders because, as the Wall Street Journal puts it,” the US barely registers on the global rankings” in shipbuilding.
It would n’t be simple to form a strong trade defense coalition. To Friedberg’s credit, he spells out the obstacles in detail.
Negotiations would be contentious and difficult. Political support would be difficult to come by in every nation. China would have to develop plugs to plug the holes in the collective wall.
Coordinated higher tariffs on Chinese goods would be in contravention of World Trade Organization regulations. According to Friedberg, China has already distorted them and used WTO rules to defend its discriminatory practices. However, further tarnishing the WTO might have negative effects on US exporting goods like agriculture.
Bottom line: According to Friedberg,” It takes little imagination to foresee a future crisis or conflict in which China could suddenly and potentially paralyze its allies” ( p. 2 ).
It would take a lot of time for the US to act on its own to avoid that danger. Working with other nations would make things happen quicker, which would encourage a proliferation of suppliers.
As I’ve argued more than once, we need a strategy to rejuvenate American manufacturing. After studying the questions that surround it, we need a bipartisan national commission of experts to come to an agreement on that strategy.
One of the biggest issues the commission would face is whether to form a trade defense coalition.
Former longtime Wall Street Journal Asia correspondent and editor , Urban Lehner , is editor emeritus of DTN/The Progressive Farmer.
This , article,  , originally published on October 14 , by the latter news organization and now republished by Asia Times with permission, is © Copyright 2024 DTN/The Progressive Farmer. All rights reserved. Follow , Urban Lehner , on , X @urbanize