The Red Wire: U.S.-China Trade Wars Latest Sign Of Declining U.S. Influence

TAGs: China, Chinese government, Eric Holder, Jason Kirk, The Red Wire, Trade Wars, US, US government, US influence, World Trade Organization, WTO

Early last week, U.S. Attorney General Eric Holder announced that the Justice Department had indicted five officers of the Chinese People’s Liberation Army. According to the indictment, Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and GuChunhui are members of a PLA outfit called Unit 61398, which was tasked with hacking into U.S. corporations and trade unions to steal secrets to benefit Chinese companies. The five officers’ faces appeared on wanted posters distributed by the DOJ. “Success in the global market place should be based solely on a company’s ability to innovate and compete,” Holder said.

The Red Wire: U.S.-China Trade Wars Latest Sign Of Declining U.S. InfluenceAs a statement to the Chinese that the U.S. will pursue diplomatic consequences over trade espionage, the charges themselves are a middling effort with some symbolic weight. And indeed, they had enough weight to elicit furious statements from Beijing. China immediately declared that the charges were “baseless,” “extremely ridiculous,” and a “grave violation of the basic norms of international relations (that) has harmed Chinese-US cooperation and mutual trust.” The Chinese also noted that the revelations by Edward Snowden revealed that the U.S. regularly engages in spying overseas; Holder’s response was that the U.S. only spies for national security purposes, and never to give American companies a competitive edge.

As an attempt at law enforcement, the hacking indictment is laughable. The chances of the Chinese government ever handing over officials from its military to a foreign government based solely on that government’s accusations are exactly zero. Even if there were a situation where China might be willing to hand over, it certainly wouldn’t be to the United States government over a trade war. Far too often, post-Cold War Washington and its corporate overlords have proven to be double-dealing abusers of power that only sycophants, fools, and weaklings trust. Whether the government in D.C. likes it or not, the rest of the world increasingly sees it as a global bully.

After the fall of the Soviet Union, America reveled in its new role as the world’s only superpower. Following the 9/11 terrorist attacks, it misused a rare moment of moral authority and launched an imperialist military adventure in Iraq that claimed nearly 200,000 lives. Besides the staggering and thoroughly unnecessary loss of life, this decision has already cost $1.7 trillion. That’s before figuring in $490 billion in benefits still owed to veterans and as much as $4 trillion in interest to be paid over the next 40 years on the money that was borrowed to finance the war. And these losses were on top of additional trillions (and tens of thousands of lives) to prosecute more than a decade of war in Afghanistan and Pakistan.

Depending on your inclinations, this behavior has either been misguided but patriotic, stubborn and wrongheaded, or just plain evil. (There’s also the possibility that you feel it has all been completely in the right, in which case you’re clearly a corporate drone; please remit your human race membership card by the close of business today.) Whatever your opinion, the indisputable result of American foreign policy in the 21st century is that the United States economy has been undercut by the very entities the people are forced to rely on for protecting their best interests. That has forced it to become more dependent on countries like China to keep goods cheap for its citizens as it sinks deeper into costly debt. And when faced with the choice of dealing with these countries fairly or trying to use its fading diplomatic clout to rig the game, it repeatedly opts for the latter.

There’s no better evidence of this than how the U.S. approaches its commitments as a member of the World Trade Organization. The U.S. consistently presses its own claims at the WTO and trumpets its victories, but it arbitrarily chooses whether to abide by the WTO’s decisions. The classic case of this calculus of political convenience is one familiar to those who have been around the online gambling industry for any amount of time. When the WTO ruled in favor of the tiny Caribbean island nation of Antigua in 2006 in a dispute over U.S. online gambling prohibitions, the U.S. simply refused to abide by the decision. After years of ignoring Antigua’s pleas for a settlement, during which as much as five percent of the Antiguan population was put out of work, the WTO finally awarded Antigua a consolation prize of selling $21 million annually in copyrighted American movies, music, and TV shows to the rest of the world.

The U.S. government recently won a victory over China at the WTO, in a dispute over Chinese tariffs on American vehicles with engines larger than 2.5 liters. “Americans deserve to compete on a level playing field, and we will never stop fighting to ensure that our trading partners live up to the commitments they made,” crowed U.S. Trade Representative Michael Froman in announcing the WTO’s decision. But what Froman, flanked by senators from the car-producing states of Michigan and Ohio, left out was why these tariffs were ever implemented in the first place. China maintained that the U.S. government’s 2009 bailouts of General Motors and Chrysler, which kept the companies afloat after the 2008 financial crisis, were illegal subsidies under WTO rules. So much for a “level playing field.”

The question now is whether China will feel the need to play along the WTO ruling, given that the U.S. only abides by its responsibilities as a member when it feels like it. The chances of it simply ignoring the decision the way the U.S. did with Antigua are probably slim, but China is so critical to the U.S. economy those days that there are plenty of other ways it can retaliate. It has already banned Windows 8 from all its government computers, cutting off American corporation Microsoft from the largest buyer in the world’s largest computer software market. That wasn’t in response to the hacking indictments, but it does show the kind of clout the Chinese government can wield if it chooses to do so, no matter the reason. And it shows just how much bullying the world in constant pursuit of an exploitable double standard has harmed America’s influence.


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