So Far, Trade War 2019 Risks Red Ink, Not Blood

By Austin Bay

June 13, 2019 5 min read

This summer, the Trump administration is conducting two calculated national security operations in which America's vast, varied and flexible Economic resources serve as the administration's primary big stick.

Talk softly while wielding a big stick — that was Theodore Roosevelt's sound bite dictum. In 2019 we have the Trump administration, and soft-spoken it is not. But that warrants a historical reminder: TR could get loud and large, a bit like DT.

But let's disregard the talk shows and consider the facts. So far, both Trump Trade War 2019 operations risk red ink, not blood. Try to escape your own petty political lens and think about it. In the long term, spilling red ink in lieu of loss of human life may prove to be a valuable global lesson. Potentially, red ink in lieu of blood is a peace-promoting reward.

Trade War 2019 divides into two parts. Mexico is the geopolitical face of one Trump Trade War operation; China is the target of the other, far more complicated and dangerous campaign.

If face and target require explication, face indicates Mexico is associated with a problem that negotiation and dealing will mitigate. Target? I think 50 years from now, historians will argue that between 2000 and 2016, communist China decided to target America as an adversary. Verily, Beijing saw America in retreat and entertained visions of global dominance.

In 2019, if not January 2017, the U.S. decided to engage communist China using Chinese rules.

To be more colloquial, the Trump administration decided to expose imperialist communist China as a paper Economic tiger.

Note that in this column's first sentence I capitalized the letter "E" in "Economic." "E" is the last letter in the acronym DIME, strategist shorthand for the four elements of national power, Diplomatic, Information, Military and Economic.

Here's the deep background the talk shows and personality politics miss. The Trump administration understands Trade War 2019's two conflicts aren't Wall Street isolation or gross domestic product, tariff and capital flow warfare spinning in wallet. In Trade War 2019, DIME is a dynamic phenomenon, not academic posturing. The White House knows the Diplomatic, Information (especially Trumpian narrative warfare) and Military elements of U.S. national power add synergistic clout to America's Economic leverage.

Leverage: obtaining an advantage to achieve a goal.

Illegal migration is at the core of the clash. American economic and political special interests of the right and left have exploited this issue. Given this exploitation, it's little wonder Congress has failed to act on illegal immigration.

In his 2007 book "All Politics Is Global," Daniel Drezner noted that on a borderless world as conceived by "pop" globalists, regulatory and legal standards are "a race to the bottom." Why? Regulations are enforced within borders. Drezner's truth puts 2019 open-border activists in an ironic bind. Most liberals advocate rigorous government regulations, from chemicals to speech. The orderly and legal arrival and departure of human beings is a fundamental regulation, especially if you oppose human trafficking. Disregarding legality destroys the responsibility of citizenship. If open-border advocates despise American citizenship, they should admit it, on Twitter, on MSNBC.

Trump's U.S.-Mexico-Canada trade agreement didn't fundamentally alter North America's market. In return for the Economic reward, the U.S. demanded Mexico halt illegal immigration from Mexico and through Mexico from Central America.

Perhaps Mexico believed America would just gripe and never attempt to enforce agreements to halt illegal entry. But Trump's Economic threat induced serious negotiation. Mexico will detain illegal migrants inside Mexico and investigate groups funding illegal migrants.

As for China, Trade War 2019 targets intellectual property theft, which provided the dark energy behind Chinese economic expansion for decades. Trump administration policies are exposing China's systemic economic immaturity. Its financial system is far more sensitive to disruptions. When the tariffs were imposed in early 2018, the Chinese stock market fell 20 percent; American markets declined one percent.

China can no longer supply itself internally and must import resources. Material goods reward China's masses for kowtowing to the dictatorship. Rattle the economy and you rattle the dictators.

The size of a nation's market is a very powerful force, and America is the superpower of markets. In Trade War 2019, America's market has moved to the front line. Mexico chooses allied cooperation. China? Apparently, Washington has concluded the time to curb China's appetite for imperialist aggression is now, by cutting off its economic oxygen.

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Austin Bay
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