Washington ~ President Trump’s determination that China is a “strategic competitor” to the United States is a welcome change according to the Coalition for a Prosperous America (CPA). The designation came as the White House released its recent National Security Strategy (NSS) as mandated by statute.
“CPA has long advanced the idea that strategic trade is necessary to protect America’s national interests,” said Dan DiMicco, Chairman of CPA. “China is a threat to US interests, but not necessarily in a peace versus war framework. The country is also not a ‘strategic partner’ as President Obama has said. President Trump is right to state that China is in a direct economic, military and political contest with the United States.”
President Trump stated today, in his speech:
“Our new strategy is based on a principled realism, guided by our vital national interests and rooted in our timeless values. This strategy recognizes that whether we like it or not, we are engaged in a new era of competition. We accept that vigorous MILITARY, ECONOMIC, and POLITICAL CONTESTS are now playing out around the world.” (emphasis in original)
“A laissez-faire, free trade approach to China and other strategic mercantilists is not only inappropriate and naive, but a threat to both America’s workers and the geopolitical position of the United States,” said Michael Stumo, CEO of CPA. “America needs to view both our balance of trade and our composition of trade as vitally connected to a secure and prosperous future.”
They employ sophisticated political, economic, and military campaigns that combine discrete actions. They are patient and content to accrue strategic gains over time—making it harder for the United States and our allies to respond. Such actions are calculated to achieve maximum effect without provoking a direct military response from the United States. And as these incremental gains are realized, over time, a new status quo emerges.
The United States must prepare for this type of competition. China, Russia, and other state and nonstate actors recognize that the United States often views the world in binary terms, with states being either “at peace” or “at war,” when it is actually an arena of continuous competition. Our adversaries will not fight us on our terms.(p 28)
“The NSS would have been stronger had it called out other countries’ currency warfare against the United States,” said Stumo. “China and other countries grow strong through undervalued currencies, whether through manipulation or not. Conversely, the US dollar becomes overvalued. Our goods, services and labor become noncompetitive globally. Our economy declines.
“The administration should expand its monetary strategy beyond merely defunding terrorist organizations. President Trump should direct the Treasury Department to consider an innovative plan to impose a strategic charge on incoming capital to consistently achieve a competitively priced dollar. We need to jettison the view that a Strong Dollar equals a Strong America, because the opposite is true as our goods, services and labor lose out to strategic competitors.
About CPA: The Coalition for a Prosperous America is the nation’s premier organization working on the intersection of trade, jobs, tax, and economic growth. We represent the interests of 4.1 million households through our agricultural, manufacturing, and labor members.
****** Additional excerpts from the NSS are below *****
China and Russia want to shape a world antithetical to U.S. values and interests. China seeks to displace the United States in the Indo-Pacific region, expand the reaches of its state-driven economic model, and reorder the region in its favor. (p 25)
For decades, U.S. policy was rooted in the belief that support for China’s rise and for its integration into the post-war international order would liberalize China. Contrary to our hopes, China expanded its power at the expense of the sovereignty of others. China gathers and exploits data on an unrivaled scale and spreads features of its authoritarian system, including corruption and the use of surveillance. It is building the most capable and well-funded military in the world, after our own. Its nuclear arsenal is growing and diversifying. Part of China’s military modernization and economic expansion is due to its access to the U.S. innovation economy, including America’s world-class universities. (p 25)
To prevail, we must integrate all elements of America’s national power—political, economic, and military. Our allies and partners must also contribute the capabilities, and demonstrate the will, to confront shared threats. Experience suggests that the willingness of rivals to abandon or forgo aggression depends on their perception of U.S. strength and the vitality of our alliances. (p 26)
Our diplomatic, intelligence, military, and economic agencies have not kept pace with the changes in the character of competition. (p 28)
The ability of the military to surge in response to an emergency depends on our Nation’s ability to produce needed parts and systems, healthy and secure supply chains, and a skilled U.S. workforce. The erosion of American manufacturing over the last two decades, however, has had a negative impact on these capabilities and threatens to undermine the ability of U.S. manufacturers to meet national security requirements. Today, we rely on single domestic sources for some products and foreign supply chains for others, and we face the possibili of not being able to produce specialized components for the military at home. (pp 29-30)
China, for example, combines data and the use of AI to rate the loyal of its citizens to the state and uses these ratings to determine jobs and more. (p 35).
Although the United States seeks to continue to cooperate with China, China is using economic inducements and penalties, influence operations, and implied military threats to persuade other states to heed its political and security agenda. China’s infrastructure investments and trade strategies reinforce its geopolitical aspirations. (p 46)