I think I agree with Noah Smith’s most recent Substack post on China. Unfortunately, I can’t read the whole thing because part of it is paywalled. Here’s a snippet:
Anyway, I still think building up an anti-China economic juggernaut would be a great thing to do, and I still think the U.S. would benefit from closer economic integration with its friends and allies. But I think the election of Trump shows why this strategy probably isn’t going to work. The United States is simply too internally divided to engage in the sort of far-seeing, purposeful, smart kind of international competition that we pursued so effectively in the 20th century. Americans care more about fighting other Americans than about fighting the Chinese, and that state of affairs will persist for a while.
I would phrase it a little differently. I don’t think we should worry about China—it will defeat itself. We should be more concerned about our defeating ourselves.
We shouldn’t be dependent on China for the things we use in our military or the things used to make the stuff our military uses. That part can be managed. Companies in which China plays an indispensable role anywhere in their supply chains or their vendors’ supply chains shouldn’t be eligible to bid on defense contracts. That’s harder than it sounds but the reality is that having a second supplier that is not Chinese is not really a second supplier in the context of just-in-time (JIT) inventory and manufacturing.
We shouldn’t be dependent on China for consumer goods, either. That doesn’t mean we shouldn’t buy Chinese goods. It means China shouldn’t be in a position to create widespread shortages or sharp price increases simply by withholding them or the materials we or our other trading partners use to make them. Recent experience should have taught us how quickly even temporary increases in consumer prices have political consequences.
None of that requires economic isolation from China. It requires ensuring that trade with China does not become dependence on China.
I have little problem with being more dependent on Canada or Mexico. Indeed, I think our economies should be more closely integrated. That will be harder still.
Do what we’re good at and let China do what it’s good at. Let China be China and the U. S. be the U. S.
I am sure I will be schooled by somebody, but my hands are working, for now. So, I’ll keep my roll going.
To be fully independent means no raw materials can be sourced from China. I am somewhat more lax on the US only policy. I think any defensive treaty ally should be qualified, but we should have a plan for a second and third source. We probably would not want Poland as the sole source in a war with Russia, but assuming they could provide quality parts, they should be acceptable.
For those confused, Turkey is an ally. Israel is not. Japan and S. Korea are allies. Taiwan is not.
For consumer products, I would apply strict liability, and if the manufacturers could not be touched, the burden would fall on the importers, distributors, and sellers. No tariffs would be needed, and because property laws would be upheld, libertarians (free-traders) would be thrilled.
Goods from countries with reciprocal laws would naturally be favored. No muss, no fuss.
Since these would be mostly countries with similar labor, environmental, etc. laws, there would not be as much of an economic advantage. Europe may be more expensive, but Japan may be less expensive. It would mostly balance out, and a small trade deficit is not a problem. Well, except politicians trying to fund a ballooning national debt.