When US President Joe Biden and Chinese leader Xi Jinping meet in Indonesia tomorrow, ahead of the G-20 summit in Bali, how will they break the ice?
Biden: That was quite a Party Congress you had in Beijing last month, Mr. President. What exactly did Hu Jintao say that got him thrown out like that? I sure wish I could give at least one of my predecessors the same treatment.
Xi: Congratulations on avoiding a red wave in your midterms, Mr. President. We know a thing or two about red waves in China, and that wasn’t even a ripple. But now can we talk about Taiwan?
The 2022 midterm elections have indeed changed the US Congress much less than most pundits anticipated. It’s still possible that the Republicans may not take either chamber of Congress. But could a red ripple still turn out to be a geopolitical wave.
On the assumption that the Republicans will secure a narrow majority in the House but fail to take the Senate, let me offer you two scenarios — one admittedly more probable than the other.
First, the one most people are expecting: Washington will return to gridlock. House Republicans have promised investigations ranging from Biden family business deals to the crisis along the Mexican border. They may attempt to impeach cabinet officials such as Secretary of Homeland Security Alejandro Mayorkas. GOP leaders have so far avoided talk of impeaching Biden, though this is clearly among the fantasies of the Freedom Caucus. I would not rule it out. We are fast approaching a new normal in which all presidents get impeached.
The Republicans’ Commitment to America isn’t a legislative agenda, like New Gingrich’s 1994 Contract with America. It is a laundry list of Republican economic and cultural priorities: small government, pro-growth tax cuts, deregulation, shorter permitting processes, “enhanced voting requirements,” stronger parental rights in education, more funding for police and the border, and so on. If the GOP doesn’t control the Senate, any bills along these lines will be dead on arrival there. Even if the Senate does change hands, it won’t be easy to make such legislation attractive enough to centrists to secure the 60 votes needed to break a filibuster.
But gridlock can produce storms as well as stalemate. As things stand, the US must raise the debt ceiling in “early 2023.” As in 2011 and 2013, the Republican leadership will try to use this deadline as a lever to put pressure on the White House. On both those occasions, the standoff was resolved prior to technical default, but that did not prevent a great deal of ink being spilled by excitable financial journalists and a great many bonds being sold by nervous investors. With the Fed raising interest rates and the Treasury market prone to both volatility and illiquidity, the economic environment is now much less benign. Debt-ceiling brinkmanship in 2023 could have unintended consequences.
In short, there is a very plausible scenario in which American politics continues very much as usual, with all the House of Cards shenanigans that have for years eroded public trust in Congress. If that’s what happens, the midterms will be a veritable nothingburger for both domestic and foreign policy.
But now let me give you a low-probability, high-impact alternative scenario. The signing into law of the CHIPS and Science Act on Aug. 9 revealed that the polarization of American politics into two irreconcilable partisan halves is not without its limits. The act provides around $280 billion in funding to boost the development and manufacturing of semiconductors in the US, including $52 billion to subsidize domestic production.
While nobody was paying close attention, a bipartisan consensus has emerged in the past two years on one issue, and perhaps on one issue alone: China.
As I pointed out here three weeks ago, there is now very little to choose between the Donald Trump National Security Strategy and the Joe Biden National Security Strategy when it comes to the threat posed by China as a “strategic competitor.” Congressional Republicans and Democrats seem almost to vie with one another to see who can be more hawkish on this subject. The epiphany for me came when, at a conference in Italy in September, I listened in amazement to Republican Senator Lindsey Graham of South Carolina and Democrat Robert Menendez of New Jersey singing harmoniously as if from the same hymn sheet on the subject of foreign policy in general, and China in particular.
The consensus on China is so broad that passing the CHIPS Act was a relatively easy matter. Its final version sailed through the Senate by 64-33 votes, with the support of every senator in the Democratic Caucus (except the independent Bernie Sanders), plus 17 Republican senators, including Minority Leader Mitch McConnell, Mitt Romney and Graham. Todd Young of Indiana co-sponsored the bill and Rob Portman of Ohio attended the presidential signing ceremony. The White House was unambiguous about the purpose of the act: It is intended to “Lower Costs, Create Jobs, Strengthen Supply Chains and Counter China.” It is getting hard to find people in the capital who are against countering China.
In part, no doubt, the consensus on China reflects a far-reaching reassessment of the global balance of power by the American political elite, based on their careful study of the subject. They have read Rush Doshi’s The Long Game. They have marked Elbridge Colby’s Strategy of Denial. They have learned from Graham Allison’s Destined for War. And they have inwardly digested Chris Miller’s Chip War.
But those too busy tweeting, fundraising and campaigning to read books could hardly have missed the huge shift in public sentiment on China. Just 10 years ago, around 45% of Americans had a favorable view of the People’s Republic. That figure is down to just 16%, according to the latest survey from Pew. The unfavorable share is up from around a third to 82%.
A major part of the historical significance of Trump’s presidency was the way he led the turn against China, beginning with tariffs on Chinese imports, broadening the response into a “tech war” and finally launching something more like a cold war. The Biden administration has essentially continued and intensified this strategy.
The recent measures announced by the Commerce Department — which drastically restrict China’s access to sophisticated semiconductors and the equipment and expertise needed to make them — is a direct descendant of the steps the Trump administration took against the Chinese tech giant Huawei Technologies Co. They also recall the restrictions imposed during the Cold War to prevent the Soviet Union gaining access to Western computing technology.
Like Cold War I in its early phase, Cold War II is a bipartisan endeavor. Just as Republicans and Democrats competed to out-hawk one another over Sputnik, the “missile gap” and Cuba in the 1950s, so they are engaged in much the same process today over artificial intelligence, the chip war and Taiwan.
The consensus is not unanimous, to be sure. There are dissenting voices today, just as there were in the Fifties. But woe betide anyone who risks being accused of being “soft” on China. From Wall Street to Silicon Valley, companies with large investments in China are nervously assessing the pace of “decoupling” and trying their utmost to avoid being the targets of congressional scrutiny.
A key concern is the current push on the National Security Council for an executive order by year-end to create a notification regime on new investments into China in three sectors: semiconductors, quantum computing and AI. That would require US companies planning such investments to notify the federal government in advance – potentially the prelude to a system of screening. The crickets you hear are US business leaders publicly arguing against these new restrictions.
For much the same reason, because the war in Ukraine is widely seen in Washington as a proxy war, in which the Ukrainians (our proxy) fight the Russians (China’s proxy), there is much less disagreement about it than is sometimes reported. True, back in May, 57 Republican House members and 11 senators voted against the $40 billion Ukraine aid bill. True, Representative Kevin McCarthy, the putative next House speaker, said that House Republicans did not intend to write Ukraine a “blank check.” True, Republican voters’ enthusiasm for the Ukrainian cause has waned since the early phase of the war. According to a recent Wall Street Journal poll, 48% of Republicans now say the US is doing too much to help Ukraine, up from 6% in the previous survey. The share who says the US isn’t doing enough to help Ukraine has plunged from 61% in March to 17%.
However, McConnell continues to back aid to Ukraine. And I see fewer and fewer takers even in the Trumpist wing of the party for the role of Putin apologist. It always struck me as a grave misjudgment on the part of some populist talking heads to see the Russian president as an ally, merely because he occasionally includes culturally conservative talking points in some of his speeches. The invasion of Ukraine has exposed to the wider public the reality that some of us have long understood: Putin’s Russia is an authentic fascist regime, guilty of large-scale human rights violations and other criminal behavior both at home and abroad, and now clearly responsible for war crimes in Ukraine.
The upshot is that even populist politicians dare not go much beyond grumbling about the financial costs of backing Ukraine’s fight. There are Ukraine skeptics on the left of the Democratic Party, too, but their attempt to argue for a negotiated peace with Russia ended in abject humiliation last month.
In any case, the Biden administration has already signaled to the Ukrainian government that this war cannot go on forever. This was the significance of the story leaked late last month that Biden had “lost his temper” with President Volodymyr Zelenskiy during a phone call in June because the Ukrainian leader was being too demanding and insufficiently grateful. I have long expected Washington to start leaning on Zelenskiy to negotiate with Putin in the wake of the midterms, especially if the Ukrainians were able to take back the southern city of Kherson, which they just have, in spectacular fashion. A few more grumbles from House Republicans may even make National Security Adviser Jake Sullivan’s delicate diplomatic task easier.
My understanding is that General Mark A. Milley, the chairman of the Joint Chiefs of Staff, has jumped the gun by calling for negotiations this week. But Sullivan wants the Ukrainians to press their battlefield advantage for no more than a couple more months. Zelenskiy is of course ready for “genuine” negotiations — just not with Putin, and on condition that Ukraine receives reparations and that Russians are prosecuted for war crimes.
In a parallel universe, McConnell and McCarthy harness the Democrats’ shared commitment to the containment of China, working with the key centrists across the aisle — Joe Manchin of West Virginia and Kyrsten Sinema of Arizona — to craft legislation that would stand roughly the same chance of success as the CHIPS Act.
How about, for starters, an Immigration Reform Act that simultaneously ends the chaos on our southern border and revives legal immigration, which has currently all but ceased? That could be sold to Congress almost as easily and credibly as the CHIPS Act as vital to US national defense.
Consider that 42% of the US winners of Nobel prizes for physics have been immigrants; the US was by the far the world’s biggest recipient of immigrant inventors between 2000 and 2010; and immigrants have started 55% of America’s startup companies valued at $1 billion or more (319 of 582). From SpaceX to Moderna Inc., firms that are manifestly vital to US national security would likely not exist if legal immigration had been as difficult as it is today when Elon Musk and Noubar Afeyan got their green cards.
For years, Congress has been unable to pass immigration reform because of fundamental differences between the parties on its domestic implications. But wrap the issue in the flag — make it a matter of countering China — and there is a way out of the impasse.
Could not the same be done to address the indefensible mess that is US energy policy, which in the past year has led the Biden administration to humiliate itself by pleading vainly with Saudi Arabia and Venezuela to pump more oil? What possible sense does it make — with oil at $85 a barrel, US natural gas prices up 69% year-to-date, and the European allies scrambling to find substitutes for Russian energy — for investment in US hydrocarbon production to be at a standstill?
As Chevron chief financial officer Pierre Breber put it on the firm’s third-quarter earnings call, “We’re not really paid for growth by the market.” Early indications of US firms’ 2023 capital budgets show that higher oil production is unlikely, and recent evidence shows that spikes in the oil price no longer have the galvanizing effect they once did on marginal US production.
Such are the consequences of the Biden administration’s preference for “green new deal” virtue signaling over strategic rationality. Discouraging US investment in pipelines and other energy infrastructure does nothing to save the planet; it just means that other, dirtier fossil-fuel producers win market share.
The US is now in Cold War II and, as I argued here three weeks ago, it runs a nontrivial risk of ending up in World War III. The war in Eastern Europe might yet escalate, especially if Russia’s demoralized army shows signs of disintegrating (which it does). Attacks on Saudi Arabia by Iranian proxies seem increasingly likely. And the prospect looms of a showdown with Beijing over Taiwan at some point in the next few years. Moreover, America’s adversaries are increasingly cooperating with one another.
It is now more than 20 years since President George W. Bush referred to Iran, Iraq and North Korea as “the axis of evil,” a phrase devised by his speechwriter David Frum a few months after the 9/11 attacks on New York and Washington. This axis was more or less fictional, as the three states barely communicated with one another and, in the case of Iran and Iraq, were sworn foes.
Today’s axis of ill will is between China, Russia and Iran, and it is very far from imaginary. Russia is relying on Iranian drones to pursue its war against Ukrainian civilians and the infrastructure on which they depend. Last week, Russian Security Council Secretary Nikolai Patrushev was in Tehran to meet with Iranian President Ebrahim Raisi, probably to request missiles as well as more drones. Meanwhile, although China is being careful not to trigger US secondary sanctions, its trade with Russia is up 64% since the invasion of Ukraine, making it by far Russia’s largest trading partner.
Unwittingly, the net effect of American economic sanctions, dating back as far as 1979, has been to drive these three historical adversaries together. Glance at a map of the world, and you will see that we risk realizing the nightmare envisioned a century ago by the great English geographer Halford Mackinder: uniting the greater part of the Eurasian landmass — Mackinder’s “world island” — against us.
If ever there has been a time since the end of Cold War I for American politicians to find common ground in the name of national security, this is surely it. With our mounting national debt and our increasingly anachronistic military capabilities, we are in no way prepared to cope with simultaneous challenges to American primacy in Eastern Europe, the Middle East and the Far East.
The Republican leadership in Congress should adopt this approach purely out of patriotism, as should their Democratic counterparts. (Try picturing, if it helps, US aircraft carriers sinking in the Taiwan Strait under waves of attack by enemy drone swarms.) But political self-interest points in the same direction. Constructive bipartisanship will do our elected representatives much more good with voters come 2024 than another wearisome round of impeachment theater and debt-ceiling Russian roulette.
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