America must mobilize to meet this crisis, rebuild our industrial base and win the new cold war against communist China. Total decoupling isn’t necessary — the US and Soviet Union had limited trade during the Cold War. Sovereignty, however, is necessary. We need to create alternatives so that our security and prosperity aren’t at the mercy of officials in Beijing. Some businesses and political leaders already have an appetite for change: JPMorgan Chase just committed $10 billion for investments in critical national-security projects. Australia, the Netherlands and other allies are taking steps to regain their sovereignty from the CCP’s predation. The US must seize this moment of opportunity.
The federal government could coordinate with industry and allies to accelerate the production of critical goods that China has virtually monopolized, including rare-earth materials and pharmaceuticals. The US government could remove regulatory roadblocks that slow energy production and industrial projects. It could underwrite the demand side, acting as a guaranteed buyer of critical products at sustainable prices, so that the private sector can invest and innovate without fear of being crushed by swings in global commodity prices or Chinese mercantilism. And the government could keep or even raise tariffs on Chinese goods, both to fund rebuilding at home and to offset the artificial price advantage of China’s heavily subsidized goods.
Washington could also restrict US investment in China, including by limiting American companies from building factories on Chinese soil. As they did during the Cold War, US companies will have to pick sides. They should build at home and in our closest allies’ countries.
None of this will be easy or cost-free. Beijing has leverage over America, from supplies of critical minerals and pharmaceuticals to its stockpile of US Treasury bonds. But using that leverage is also costly for China, threatening massive economic losses and public discontent, which Beijing’s control-obsessed officials fear. Ultimately, the CCP has more to gain from continued economic integration with the US than we do. We should prepare for a long and painful road, while recognizing that the problem will get worse if we delay, rewarding China with more investment and trade to use against us.
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Shyam Sankar
@ssankar
We offered China peaceful coexistence. We funded their industry, educated their children, brought them into the global economy.
They murder our children with fentanyl. Sabotage our critical infrastructure. Strangle our supply chains.
America has a positive sum spirit. No
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