We’ve talked here before about effects of bullying. This time we want to be even more basic—weakness and strength.
If you want to get something done, it’s important to get others behind you. In almost any task or context, few people are able simply to impose their will. Building alliances is the means to power—for individuals and for countries.
There was a time after the second world war when the US, as last unscathed power, could do whatever it wanted. That’s of course the era Trump recalls with MAGA. But we’re no longer in that world, and we do ourselves no favor by pretending it’s still true.
Krugman had a recent NYTimes piece talking about the limits to our power in the trade wars. However to my mind he didn’t go far enough with his argument. It’s true that our power is limited, but we also refuse to think seriously about how to get things done.
China is of course the case in point. Despite Trump’s initial declaration that “trade wars are easy”, this one has been up and down for many months with constant chest-beating and accusations of evil. There is still no clear idea of the timetable or eventual conclusion. One thing that is certainly true is that there is already a legacy of hostility and suspicion on both sides—with consequences that will survive any deal.
That situation is not a fact of life, it’s a fact of weakness. We represent 18% of China exports, and by going it alone that’s all the leverage we’ve got. The EU represents another 18% with essentially the same grievances. Normal behavior is to ally our interests and get to the conclusion with overwhelming power. The Business Roundtable of Corporate CEO’s recognized that from the beginning. However, Trump wanted a special deal with his name on it, so he chose weakness instead of strength—leaving us all to live with it.
We can even go a step farther. As a way of exercising power, international institutions are actually useful for this kind of problem. That’s why, despite the “threats to our sovereignty” rhetoric, those institutions exist.
China is still classified as a developing country for the WTO. Everyone expected that to change, with new rules to be negotiated. That is where the US + EU leverage would normally be brought to bear.
And negotiation in that context has two more advantages:
1. First the negotiation becomes a matter of standards for international behavior, not a question of national honor. That keeps the focus on technical issues rather than face-saving.
2. It requires us to separate what are real matters for rules of commerce (open markets, intellectual property, conditions for labor) from whatever barriers we might want to place in the way of Chinese technological development.
That may sound like a limitation, but it is actually an advantage. It makes us think about competition for what it is, rather than as something we can cure with a big stick. There is plenty that we’re not doing to strengthen our own act.
The bottom line here is simple. We have chosen to fight a trade war with China out of weakness. That weakness has already had consequences in terms of relations between countries and will also be expressed in the terms of any final agreement.
We can be explicit about what that means. We have chosen a path that will lead to less access to the Chinese market (already the biggest economy in the world) and more hostility between countries. On that second point we have already announced a new arms race—which will cost both countries (and the rest of the world economy) dearly.
None of this has to be. It’s weakness instead of strength.