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The Real Cost of America's "Made in China" Addiction

The National Interest Crouching Tiger Series: Buy Made In China, Weaken National Security? from Peter Navarro on Vimeo.

At the next two presidential debates – the Republicans square off in Nevada and the Democrats duel in New Hampshire – this question should be put to every candidate by the CNN and ABC moderators:

Will you buy any Made in China gifts for the holiday season? If not, why not?

In fact, this is as much a national security question as it is an economic one. Here’s why.

This Black Friday weekend, American consumers will add billions of dollars to the US trade deficit as they binge on Made in China holiday gifts.  The People’s Liberation Army (PLA) will then use some of the profits from this China trade to continue building what will soon become, if not the most technologically advanced military in the world, then certainly the most heavily equipped. 

In a perfect world, we would realize buying illegally subsidized Made in China products not only costs the American economy the jobs, factories, shipyards, and tax revenues its needs to build a strong military. We would also be mindful that our Made in China addiction helps the PLA build the weapons it increasingly aims against us and American soil. 

Just why are our political leaders so utterly failing to connect these Made in China economic and military dots?  The answer may be found in two competing ideologies, each of which works at cross-purposes to crafting sound China policies.

Consider, for example, Liberal Democrats like Presidential candidate Bernie Sanders. They tend to be hawks on unfair trade practices and take a tough line on Chinese mercantilism.  However, these LibDems also strongly favor the butter of social welfare programs over more guns to defend America from the likes of Xi Jinping’s China and Putin’s Russia.  Here, the very real power of Bernie Sanders has been to move a nervous, poll-watching Hillary Clinton farther to the Left on these issues.

As for Conservative Republicans, they are equally hamstrung on China but for the exact opposite reason. These ConReps tend to be hawks on defense and take a tough line on Chinese aggression. However, they are also free traders who take a soft line on unfair Chinese trade practices like currency manipulation and illegal export subsidies.  This soft on trade policy conservative posture has thereby allowed a mercantilist China to have its way with our manufacturing base.  

Senators Ted Cruz and Marco Rubio are the poster child twins of this counter-productive conservatism. While each has been hawkishly quick to rattle the China sword in the face of Beijing’s South China Sea aggression, each has a long history of opposing any Donald Trump-like crackdown on unfair Chinese trade practices like currency manipulation.

In the Crouching Tiger book and film series, I try to square these ideological circles on the Left and Right by illustrating the critical connections between a strong manufacturing base, a vibrant economy, a solid tax base, and ultimately a military powerful and ready enough to defend U.S. interests against the rise of authoritarian and revanchist nations like China and Russia.  One of the most important insights in this Crouching Tiger effort comes from former White House advisor Stefan Halper.

In a landmark Pentagon study, Halper documents China’s growing reliance on its non-kinetic “Three Warfares,” what he calls “a dynamic three-dimensional warfighting process that constitutes war by other means.”  To Halper, the Three Warfares are particularly important to Beijing’s revanchism in an era in which it is increasingly difficult to use kinetic military force to advance territorial goals. Indeed, as Russia’s adventurism in the Ukraine has demonstrated, unlawful kinetic force is likely to draw immediate condemnation and economic sanctions.