Communist China poses a greater challenge to American prosperity, peace, and international order than the Soviet Union ever did. But countering China should not mean a rebirth of American protectionism.
I note this in light of the rising conservative disagreement over how to address China once the coronavirus pandemic passes. One viewpoint is that of Republican Missouri Sen. Josh Hawley. Speaking on Wednesday, Hawley correctly identified China’s mortal threat to the U.S.-led liberal international order. But he also argued that the United States cannot contain that challenge unless it withdraws from what Hawley sees as broken international free trade frameworks, such as the World Trade Organization.
The alternate point of view is offered by John Tamny of FreedomWorks. Writing on Wednesday, Tamny suggests that the Trump administration has endorsed a dangerously misguided protectionism in its dealings with China’s Huawei telecommunications firm.
Both Hawley and Tamny’s arguments have legitimate points, but also serious flaws.
China must be constrained, but not at the cost of global free trade.
Tamny simply lives in denial of the Trump administration’s declaration that Huawei is an arm of the Chinese state’s intelligence apparatus. “It’s hard not to laugh at what’s so completely absurd,” Tamny says, “To believe the spying, arm of the state narrative, we’d have to believe that governments can actually plan world-leading companies that meet the exacting standards of businesses and individuals around the world.” Tamny continues, “That a company with so much riding on its good name would risk it all by spying for politicians is another one of those absurdities that Huawei’s critics never stopped to think about.”
Even if Tamny is right to wish to maintain free trade and maximal access to a varied array of goods and services, Huawei is indeed an intelligence arm of the Chinese state. While the company is motivated by the pursuit of profit and has been given wide latitude in that regard, it is controlled by the Chinese Communist Party — as are all Chinese corporations in the end. This is something Tamny does not seem to recognize as a fundamental organizing precept of the Chinese economic system. Regardless, Huawei’s specific threat to U.S. security is not in question.
Supported by Chinese cyber-espionage officers in the People’s Liberation Army and Ministry of State Security, Huawei’s hardware and software are riddled with backdoor access ports and data siphon points. Reflecting their long-term spying purpose, many of these ports/points are designed to look like simple design flaws rather than deliberate espionage tools.
But it is here that Huawei finds its defining purpose: Supported by Beijing subsidies, vast lobbying and public relations campaigns, and offering products which are dependent on U.S. innovation, the firm seeks to steal intellectual property and other valuable secrets all across the world.
But if Tamny’s argument fails on Huawei, Hawley’s argument also fails on free trade.
Don’t get me wrong, Hawley’s national security and coronavirus-related proposals for addressing China are well-designed. I also support isolating China from the World Trade Organization and using tariffs to alter Chinese trade behavior where it breaches mutually agreed rules. But global free trade per se should not be on the chopping block here. At the margin, globalization has brought massive benefit to people in the U.S.
And global free trade has lifted billions out of poverty in the last 25 years, helping turn former foes such as Vietnam into America’s closest friends. This dynamic will be instrumental in constraining China’s imperialism. Protectionism would sacrifice billions of daily individual choices enabled by the free market in order to consolidate a much lesser number of U.S. workers. And pressuring prices downwards, free trade benefits the least wealthy Americans the most. It would also ultimately damage our economy.
Just look at what free trade has done for the global car market. In the 1980s, Japan revolutionized that market by offering cheaper but often better cars to U.S. consumers. The public benefited by that choice and also by Japanese firms forcing U.S. car manufacturers to innovate and improve their own offerings.
The same principle applies to every industry: competition, bound to rules, is good. Injecting our education system with a greater emphasis on technical skills, math, and science is the best way to deal with global competition in the 21st century. Yes, that will require significant investment more than somber words and pledges. But if done, it will allow our workers to create the new high-value export item such as the next smartphone, rather than the next T-shirt.
So yes, we must constrain China’s imperial ambition. But so also should we double down on that which has made us more prosperous and freer in our consumer choices. The two options are not mutually exclusive.
