065. Trading With the Devil

Trading With the Devil

Commentary by James Gorrie
May 18, 2020

The Chinese Communist Party (CCP) is not used to being pushed around. But U.S. President Donald Trump knows how to shove, and he can shove pretty hard when he sets his mind to it. Within the space of a year or so, from 2018-2019, he trashed all of the fundamentally imbalanced trade arrangements that China had built its wealth upon at the expense of American manufacturers over the past 40 years.

No one was surprised, therefore, at Beijing’s reaction to Trump’s hard-hitting trade war and stiff tariff policies toward Chinese products. A big part of China’s initial response was to resort to retaliatory trade practices against U.S. products, such as cancelling purchases of U.S. soybeans and other agricultural products.

Beijing Going After Red States

Not coincidentally, China was also punishing states that supported Trump in the 2016 national election. That was clever on Beijing’s part, but it changed nothing. Trump kept hammering the Chinese economy with his tariffs, and the Chinese economy kept declining. Even now, in the midst of America’s 2020 election season, China’s targeting of pro-Trump states is designed to erode support for the one man they can’t tolerate as President of the United States.

Meanwhile, U.S. legislators are trying to strip China of legal immunity, which would enable U.S. citizens to sue China for damages from the COVID-19 pandemic.

A Smarter Strategy

At the same time, China’s global strategy was a bit smarter. The idea was to isolate the United States from its allies, especially those that were heavily dependent upon China for trade. The thinking in Beijing was that for most nations, their lucrative trade relations with China would trump political, cultural and even military alliances with the United States.

And for a while, that was true; at least in some instances. Until recently, Australia was a perfect example of that policy. It has been, of course, closely aligned with the United States since World War I.

But as a lightly populated country rich in natural resources and in relatively close proximity, Australia relies on China as a major market for its commodities. Those include a variety of minerals, coal, gas and ore, as well as barley and beef. In short, Australia has benefitted greatly from China’s economic rise.

In fact, today, in terms of both imports and exports, China is Australia’s largest trading partner. Australia imports about 25 percent of its manufactured goods from China, and up to 13 percent of its coal exports go to China.

Australia—A Perfect Opportunity

As such, Australia posed a terrific opportunity for Beijing to deepen and expand its economic and cultural relationships with a close U.S. ally.

That explains why, as late as May of 2019, former Australian prime minister Julia Gillard insisted that Australia would not take sides in the U.S.-China trade disputes. It was an understandable but tenuous balancing act that made some sense at the time. Australia did not wish to jeopardize its deep trading relationship with China.

It wasn’t that successive Australian governments haven’t been aware of Beijing’s grand plans for a global presence in every sphere of activity. It’s no secret that technological, military, and cultural preeminence are also part of China’s ambitions.

But what could Australia do about it? Containing Beijing was far beyond Canberra’s capabilities. If it was anybody’s job to do so, it was Washington’s.

And up until recently, Canberra was behaving just as Beijing hoped it would. But then Beijing sabotaged its smartest strategy.

These days, Australia is seeking to manage the risks that come with relying so heavily upon one market, particularly one that has demonstrated its willingness to bully its own people and trading partners alike.

Today, like much of the world, Australia now understands two very important facts about China that can no longer be ignored.

Beijing’s Pandemic Misstep

First, Beijing’s monstrous extradition law and the Hong Kong crisis that followed was just a preview of the CCP’s treachery. But the Wuhan-borne viral outbreak that followed in late 2019 was the real deal-breaker. The CCP-generated pandemic that destroyed the world’s economies shattered any remaining illusions—self-imposed or otherwise—that Australia and many other trading partners, may have held with respect to China’s view of other nations.

For many Western nations, including Australia, the CCP’s own actions have made neutrality untenable. It’s simply no longer wise or even politically or morally viable.

Not only did the CCP create the virus, but it lied about its origin and the timing of the outbreak. Then the Party leadership silenced its own doctors, denied its human-to-human transmission, and withheld critical scientific information to the rest of the world.

China an Outlaw Nation

As a result, Beijing has clearly shown that it’s an outlaw nation. Most countries now understand that under its current government, China operates without any regard for human life for neither its own citizens nor for the wellbeing of the rest of the world.

To its great credit, Australia recently issued a call for an investigation into the source and cause of the pandemic, even though it’s costing them dearly in exports to China. Australia has been unequivocal that going forward, in the grand struggle that’s rapidly unfolding between the United States and China, they’re siding with the United States.

Beijing Blows Its Big Chance with the UK and the World

But Australia isn’t the only nation to wake up to the China threat. With President Trump pressuring an intransigent UK government to dump Huawei as a 5G net equipment provider, the U.S.-UK “special relationship” was becoming decidedly “less special” the past couple of years. For many months, Trump threatened the UK with fewer trade opportunities and lowering security cooperation levels if the UK approved Huawei as a participating 5G vendor.

UK Prime Minister Boris Johnson, however, not inclined to be seen as a performing monkey to U.S. demands, was not in a cooperating mood on that very sensitive issue. Thus, the “Huawei question” presented a brilliant opportunity for China to split the U.S.-UK alliance wider than it’s been in centuries.

But Beijing’s idiotic decision to infect the world—and Boris Johnson—with their CCP virus has all but destroyed any chance that Huawei will be a part of the UK 5G upgrade. In fact, the UK is now reviewing every aspect of how they view the Chinese regime.

Despite its grandiose propaganda and its overt puppeteering of World Health Organization’s Director-General Tedros Adhanom, most of the civilized world understands that China is solely responsible for the pandemic.

The Party’s decision to start a pandemic and then try to use it to springboard into a position of global leadership demonstrates the fact that dictatorial regimes that answer to no one have little understanding of those democratic ones that do. As a result, the brutes in Beijing lack the vision and nuance needed to understand Western nations’ reaction to the CCP’s most egregious crimes against humanity.

The Faustian trade deals that many Western nations made with China are crumbling more each day, as the Chinese Communist Party shows them just what it means to make a deal with the devil.

James R. Gorrie is the author of “The China Crisis” (Wiley, 2013) and writes on his blog, TheBananaRepublican.com. He is based in Southern California.

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