Whether one likes it or not, Donald Trump is now President-elect Trump. Nothing said or thought during the seemingly interminable campaign, whether about Trump or the record of the Obama Administration, matters as much as the future: What to do next.
The global situation has deteriorated markedly during the past three years. This is now a time to prepare, diplomatically and militarily. As in 1975, after the Vietnam War, or in 1935, as the storm clouds gathered in Europe and Asia, it is a time for America to get ready.
That does not mean it is a time to pick lots of fights. It is a time to avoid unnecessary fights. It is a time to attract all possible friends. It is a time to remake foreign policy and defense institutions designed well for the mid-20th century, and basically still stuck there, into institutions profoundly readier for the conflicts, fast and slow, of the digital age and new disorders of the 21st century.
In his Autobiography, Theodore Roosevelt observed that, “One class of our citizens indulges in gushing promises to do everything for foreigners, another class offensively and improperly reviles them; and it is hard to say which class more thoroughly misrepresents the sober, self-respecting judgment of the American people as a whole. The only safe rule is to promise little, and faithfully to keep every promise; to ‘speak softly and carry a big stick.’”
It is a famous phrase. Roosevelt elaborated on what he meant by it. “It is entirely inexcusable…to try to combine the unready hand with the unbridled tongue…. Throughout the seven and a half years that I was President, I pursued without faltering one consistent foreign policy, a policy of genuine international good will and of consideration for the rights of others, and at the same time of steady preparedness.”1
To relate such wisdom to our times, this essay is about some specifics. What to do. There is plenty of uncertainty about what President Trump and his Administration wish to do. But at least three big themes and two questions of principle stand forth as inevitable core choices. Those themes and questions are now molten as the Administration takes form and, as the President-elect might put it, there are deals still to be made.
The three big themes are: economic nationalism; war against radical Islamic terrorism; and not isolationism but a certain deliberate aloofness about how other countries manage their affairs. The two questions of principle are: (1) Does the new Administration have, or is it likely to quickly develop, an overarching principle for world order? and (2) scanning a range of big issues, will it prefer to have a deal or prefer the “fight”? (“Fights” are easy politically; deals are hard in every way.)
Some big deals are possible. To be specific, I will give examples of notional deals with China, North Korea, North America, Russia, and with selected Muslim partners. But the deals must “fit” within the main themes the Administration clearly intends to emphasize.
Plenty of scope remains for progress on a reshaped international trade agenda, despite the campaign rhetoric of both major party candidates. But most of the agenda for action is ours to decide unilaterally.
Rather than return to full-scope protectionism, with tariff walls restricting all foreign imports, the new Administration can adopt the theme of equal opportunity.
Equal opportunity in trade can take two major forms. First, support the emerging plan from Congress to assess corporate taxes with a “destination-basis”—in other words, to levy corporate tax based on the location of consumption. This dramatic overhaul of the corporate tax system could end the absurd shifting of income and vast hoarding of overseas cash. It could level the playing field between our trading partners—which rely on territorial consumption taxes—and our own system, which relies more on corporate income taxes. By adopting a corporate tax system looking to the territory of final sale, the U.S. system will be adopting a system that lives up to the goal of equalizing opportunity for business, eliminating so many artificial distortions.
Such a system encourages U.S. exports, since sales overseas would not be taxed in the United States at all. It would require a border adjustment on imports, imposing the U.S. corporate tax rate (its VAT-equivalent, currently planned at 20 percent) at the border. U.S. corporate taxes may also be determined net of certain tax costs, again leveling the playing field with foreign tax practices. Since U.S. currency is already appreciating against other key currencies and these policies will probably cause a further appreciation, this reciprocal reset need not be terribly disruptive. Depending on how currency values adjust, this destination-basis will probably encourage export-intensive businesses and hurt profits in import-intensive businesses, especially in clothes.
There will therefore be a struggle on Capitol Hill. The plan will be controversial with our foreign partners. But a “destination-basis” lines up well with broader international trends toward more territorial corporate tax systems. The WTO compliance arguments can be made on both sides. Congressional leaders say they will work hard to be sure their plan will pass muster. Long worked on by experienced scholars like Alan Auerbach, this plan is a creative way to fix a notoriously broken tax system. Above all, it offers a constructive alternative to much cruder and self-defeating protectionist schemes.
The second form of equal opportunity in trade would look to how foreign countries treat U.S. firms and goods. If foreign governments impose tariffs, place caps on foreign equity holdings, close off sectors to investment, practice trade-distorting currency intervention, or restrict trade in critical materials, the U.S. government could choose to ask these countries to stop doing these things. If they insist on inequality of opportunity, the President could use his authority under section 301 of the Trade Act of 1974, or using the significant authorities that already exist to confine foreign investment.
Presidents Reagan and Bush 43 used these instruments. The goal in the future as in the past would be to achieve as much free trade as possible under a fair “rules-based” system of protocols. “Rules-based free trade” is the phrase used by Dan DiMicco, an articulate and experienced member of the President-elect’s economic team. DiMicco is a veteran business executive who was the successful CEO of Nucor, one of the best American steel companies. DiMicco’s argument is not for an old-fashioned restoration of tariff barriers and trade wars. His argument, with the scars from the steel business to prove it, is instead just that “we need to be more insistent on holding others to international standards…. If you believe in free markets, you must believe in rules.”
On the surface, every administration—including the Obama Administration—has been committed to enforcing trade rules. But the formal efforts to litigate violations have not been effective. China is the key case in point.
When China joined the WTO in 2001, it seemed plausible that China’s leaders seriously contemplated a long-term effort to move toward a market economy, implementing the WTO obligations in good faith. This commitment became ever more doubtful during the 2000s. Since China completed formal implementation of its WTO commitments in 2006, its leaders have not only failed to move away from state capitalism; they have instead leaned toward reinforcing and redoubling it. The U.S. government response has been to go after China in numerous WTO compliance cases, time-consuming and relatively fruitless ordeals that miss the basic policy point. While U.S. policy treats China as an episodic rule-violator, China has abandoned as a matter of policy the basic premises of its WTO accession.
To be clear about the tradeoffs: If vigorously implemented, an “equal opportunity” policy will cause significant short-term political and economic distress on both sides of the Pacific. That could include really significant distress to some American firms, including well-known and popular companies like Apple. The disruption to Chinese business would likely be even greater, producing more strenuous Chinese efforts to carve out larger market-share and resource deals in Asia. The China deal I discuss below is mainly about how to mitigate the resulting dangers of more serious conflict.
But this is not just a strategy of confrontation. If a Trump Administration is going to start a trade war, it should think hard about finding friends in North America, East Asia, Europe, and the Western Hemisphere, not just enemies. A trade-focused alliance against state capitalism was actually a much-too-implicit part of the thinking behind TPP and TTIP. Possible successors to those agreements might be more likely to win political support in the context of a major effort to fight back against state capitalism and mercantilism.2
To be specific, on Mexico: Mexico has become a country that actually is pretty close to our approach on equal opportunity. Withdrawal from NAFTA (the only legal way to impose tariffs on Mexican imports) is premature, at best, even aside from the fact that so many so-called “imports” are products of border-crisscrossing supply chains. Wait until the rest of the strategies for equal opportunity have had a chance to work. Also, the global strategy can then build from a continental base. I will return to that point, and show the President-elect’s sympathy for it, in describing a possible deal with North America.
An agenda of economic nationalism is also timely because the world is in the early stages of the third great economic revolution in modern history, a digital revolution that could open up a new era of U.S. opportunity.3 In fact, most of the heavy lifting in the economic nationalism agenda is at home.
The tax issues are important. We should incentivize domestic business investment and incentivize corporate profits at least as much the tax code incentivizes business models that steer profits into personal capital gains. But very little of the digital revolution agenda has to do with the usual Republican/Democrat macro arguments about fiscal and monetary stimuli, or regulation and social safety nets. The real action has to be about how to restore the status and emphasis on making things in America.
Specifically, this is an agenda to enable American firms to play winning roles in global supply chains (that are also becoming ever more digital); exploit trends toward more localized and even individualized production, distribution, and retail; restore business dynamism to a sluggish and top-heavy private sector; fix broken labor markets and dysfunctional career education patterns; and change incentives that abet short-sighted business investment habits and starve lending to young growth firms. Much of the action is state and local: business leaders must take the lead in designing necessary partnerships with government leaders at all levels.
Plenty of good work has now been done on these ideas.4 Sadly, this literature has not entered the mainstream of a national conversation still too dominated by the stale economic trench warfare (more guvmint, less guvmint) Americans have been waging for forty years. If the Administration wants a real agenda for economic nationalism, these ideas may finally get the attention they deserve.
War Against Radical Islamic Terrorism
The term “radical Islamic terrorism” is the one that President-elect Trump and his team prefer. Back in 2004 the bipartisan 9/11 Commission, for which I was the executive director, preferred “violent Islamist extremism.” There are some theoretical arguments about the choice of words, not very important to most people. The words chosen for their resonance in Arabic translation may be more meaningful than the words chosen in English.5 Whatever the words, the 9/11 Commission thought then that it was vital to identify and assess this transnational enemy. The Trump Administration definitely thinks so.
The war is centered on defeating the Islamic State (or Daesh, in Arabic acronym) and al-Qaeda and its affiliates. It is also aimed at containing the revolutionary aggression of Iran and the Iranian foreign legions, including Lebanese Hizbollah. In a world of war “fast and slow,” this is the slow, generational struggle, with the U.S. government mainly playing a role that supports or enables the most effective local opponents to these groups. America’s institutions to help and encourage the others—the central challenge in this sort of 21st-century conflict—are still little more than post-9/11 adjuncts to older edifices.
Calling this struggle a war is not meant to be provocative. It is what it is and what it has been, at least since 1998. It would be healthy for the Congress to have a debate about the scope and character of such a far-flung twilight war. President-elect Trump’s appointee for National Security Advisor is retired Lt. General Michael Flynn. In his The Field of Fight, Flynn recommends that the U.S. government “energize every element of national power in a cohesive synchronized manner” and display “our complete and total commitment to winning this war against Radical Islamism.”
How is this “complete and total commitment” credible if the U.S. Congress will not even adopt, or be seriously asked to adopt, a current guiding AUMF—authorization for the use of American military force? The idea of a new AUMF has had supporters in both parties for some time. But President Obama and Republicans in Congress could not agree on the language. Also, in 2016 some Congressmen in both parties preferred not to have to cast a recorded vote on such a difficult topic during the election year. Maybe now they will step up.
The Trump Administration is determined to blaze an America First trail. There will be no more “nation building,” no more lecturing and hectoring others about their supposed deficiencies, no more foreign policy as social work. The President-elect emphasized on the campaign trail that Americans have to take care of themselves and work with others who can preserve “order” (the word he used in his August 15 foreign policy speech). Trump has made clear that he respects leaders who can manage their countries and that he looks forward to relationships built on mutual respect.
The natural corollary to this theme is to predict a foreign policy built around cold-blooded spheres of influence. This suggests a policy built around mutual respect for regional leaders who will help keep order in their neighborhoods, so as to make less work for Americans as the world’s policeman.
At a level of abstract principle, the idea of a sort of concert of great powers in this form can seem plausible. Each country looks after its own domain, its own sphere of influence. The United States sticks to its own defense, and that of formal treaty allies. There is also nothing very new here; it resembles more than a little the Nixon Doctrine’s “pillar” approach from more than forty years ago.
In practice, the old problems with spheres of influence ideas are that the contours of the “spheres” are contested, as is the character of the allowable “influence.” Does the Russian sphere of influence includes the Dardanelles Straits? The Arctic? Does the Chinese sphere of influence include the South China Sea? Taiwan? What rights and privileges attend such claims? What are the rules, if any, and how are they enforced?
Those are the old problems. The new problem with spheres of influence concepts is that, in the 21st century, the most serious conflicts and issues tend to be transnational. They cut across national boundaries and present a mix of internal and cross-national fights. Consider the geopolitics of cybersecurity, or refugee flows, or pipelines. Witness Afghanistan/Pakistan, most of the Arab Middle East, and much of Africa. Or the Russian/Ukrainian fight in the Donbas region of eastern Ukraine, or covert Russian interventions in countries like Hungary and Montenegro.
The theme of not caring so much about how other countries manage their affairs may help solve some problems and set some priorities. It could make it easier to write talking points for a lot of American official meetings with foreigners. But it cannot cover all bases. A principal insight of the past twenty years has been to recognize the fundamental relationship between the quality of a country’s governance and the prospects for its economic and human development, including public health. Americans have learned that they are not so insulated from such internal catastrophes. Remember Ebola?
Granting, though, a studied aloofness might help tighten American focus. But there is one area of guaranteed friction, and that has to do with the theme of reinvigorated war against radical Islamic terrorism. Studied aloofness would suggest that, for example, we leave President Sisi in Egypt alone to do what he must, and will do anyway whatever sanctimonious human rights lectures we fling at him.
But it’s not so simple. The war against radical Islamic terrorism is currently a civil war in at least a dozen countries, ranging from the Philippines to Nigeria. It includes Turkey as well as Egypt. In those countries, do we care how well our friends manage their Islamist problems? Of course we do. And then there are the questions of how countries manage their refugee and immigration policies, the degree of their cooperation with foreign intelligence and law enforcement in conducting local investigations, and much more. There is a limit to how much aloofness is good for us.
Two Questions of Principle
In his thoughtful recent interview with Jeffrey Goldberg, Henry Kissinger returns again and again to his hope that the United States will still lead by at least fostering some positive conception of world order. This may sound a bit odd to some people, because Kissinger is sometimes held up as an exemplar of unprincipled balance-of-power politics. Actually, such a caricature misunderstands Kissinger’s long-held views. He regarded such amoral 19th-century European statesmen as Metternich and Bismarck as essentially “sterile” and limited figures because they lacked the more positive sense of purpose and order better exemplified by statesmen like Great Britain’s Lord Castlereagh, or a number of the constructive statesmen in our own time (including himself, of course).
But if we accept Kissinger’s challenge, what positive principles have a decent chance of rallying Americans and their friends today? Historians and political theorists often write about “liberalism” and the “liberal order.” This language is intelligible in an academic environment, where everyone knows that “liberalism” refers to a set of political and economic views having to do with liberty. But for some time now the American public has immovably equated “liberal” with “politically left wing.” It is no use trying to fix this, even though America’s political Left has moved away from “liberal,” preferring the label “progressive.”
Also, it is hard to reduce terms like “liberal order” to a simpler set of principles that can be widely recognized by civic leaders anywhere in the world. There is plenty of intellectual debate about how to define the requisites of a liberal order, including the role of democracy. In 2008, the late Harvard historian Ernest May and I thought (in the pages of this magazine) that the great issues in this period of world history would be driven by the ways communities struggled over the balance of the global and the local, the new 21st-century chapter of an old story.
Like others, we stressed the importance of growing global forces and changes: immigration, terrorism, energy, commerce, cyber, bioengineering, and more. These global forces pushed against local communities, with their established sense of identity, their culture, and their preferred ways of doing things. The local communities want self-determination; they naturally resist being driven against their will into somebody else’s brave, new world. And they can push back, hard. Amid these struggles, we thought it wise for the United States to stand for a couple of ideas that all Americans could support. They were principles for coping with such struggles over time and history. The societies that coped best, we proposed, require “an open, civilized world.”
The notion of an open versus a closed society is widely understood all over the world. In ideas or in commerce, this concept is a fundamental dividing line between two very different visions for the world. “Civilized” is another concept that enjoys very wide global understanding and acceptance, as that term is translated through other languages and cultural norms. It is invariably about ideals of civic virtue. Chinese leaders understand the concept perfectly well (commingling it as they do with Sinification). So do Muslims, who pride themselves on a heritage that embraces norms of appropriate conduct by rulers and ruled. When leaders rightly call ISIS and al-Qaeda “barbaric,” they imply the contrast.
Every civilized society has rules of the road, formal and informal. Without rules, liberty yields to tyranny. Without rules, the law of the jungle prevails. Such a world is not one in which the new Administration can “make America safe again,” let alone great.
Deal or Fight?
It is usually easier to have a fight than to make a deal. This may seem shocking. Most politicians play lip service to the goal of solving problems. But, in practice, politicians know very well that few interest groups or media chatterati make their living by solving problems. They are the creatures of problems; they thrive as angry critics, not policy engineers. They make arguments to mobilize dislikes and hatreds, and then to raise money from the faithful. If the problems got solved, if the disputes faded, what would happen to them?
Some readers may find this view too cynical. Sadly, it is informed by experience. There are exceptions, however. There are people and organizations that do try to craft compromise solutions (almost all enduring political solutions are compromises).
But for the hardcore faithful, who are most likely to give money and zealously contribute to their common social networks of news and opinion, compromise is abhorrent. For them, every war is Rome versus Carthage, and the war will end satisfactorily only when victory is absolute, when the enemy is locked up or pretty darn close to it.
Since deals are actually hard, the question of principle for the new Administration is whether it wants to have any. And, if it wants deals, which ones?
It will not be hard for the new team to find within its ranks people and arguments in favor of all sorts of confrontations. There will be good arguments for confronting the leaders of any number of states large and small. But picking fights is not a substitute for strategy, and strategy has to be guided by priorities wherewith one can make the tradeoffs that are inevitable in complex situations. Given the goals and values of the new Administration, given an overarching goal of fostering a more open and civilized world, the necessary confrontations must be against radical Islamic terrorism and its principal state sponsors. There is also a significant issue coming with North Korea, again. My suggestions below would also court a significant economic-political confrontation with China, and at least a political confrontation with Russia.
But the new leadership in the Pentagon and State are inheriting institutions deeply in need of profound renovation and modernization for 21st-century challenges. I reviewed some of the Pentagon issues a few years ago. Remember Theodore Roosevelt’s admonition. Defer unnecessary fights while preparedness comes first.
At the same time, given the premises that form the new Administration’s strategic priorities, it must seek several deals with needed friends in order to fight the fights we do not wish to duck. At the same time, the new Administration should also seek deals with China and Russia once a new equipoise in our mutual relations is established. This is because these countries are likely to be areas of acute tension best mitigated through strategy and diplomacy.
Five Illustrative “Deals”
Compromise is politically fraught. All deals involve compromise, so it is invariably easier politically to issue solemn pleas for everyone to do right and leave it that. But the hard work of crafting strategies is much more than writing talking points that patiently explain what you want. It involves specific choices. The illustrations below are meant as suggestive outlines. Actual policies would need to be far more detailed and nuanced, with choreographies of consultation, coordination, and action—as always.
Deal 1: China
The essence of this deal is that, if the United States decides it must disrupt patterns of U.S.-Chinese economic interaction that have grown during the past 15 years, the United States should take action to mitigate the danger of military conflict in East Asia.
U.S.-China relations are not a zero-sum game of inevitable conflict between a status quo power and a rising power. This view has been fostered by plenty of misused and abused historical analogies based on caricatures of modern European history. Such views have a following in the United States, and they find an even larger audience in China, where so many view the outside world through traditions steeped in insecurity and conflict.
Chinese leaders are open about what they call their “core interests”: the monopoly on power of the Chinese Communist Party regime; China’s territorial integrity and sovereignty; and an environment conducive to China’s continued economic development. As already discussed, the United States may need to offer a more substantial challenge to the role of the U.S. export market in China’s future economic development. Thoughtful Chinese leaders will not be surprised. For years they have tried, with limited success, to steer China toward more reliance on domestic demand. A strong American move, perhaps joined by other states, will add a strong external push to a line that party leaders have already been pressing internally.
But if economic confrontation is the plan, this would not be a wise time for the U.S. government to threaten China’s other core interests. That is why President-elect Trump’s phone call with Taiwan’s President was not so much improper; it was just the wrong fight to pick at the moment. If you shut a door in the face of an adversary, you must take care to leave a window open lest the other party react in a way you do not relish.
On the South China Sea issue, the international legal status of the South China Sea has been articulated by a unanimous decision of the Permanent Court of Arbitration charged with interpreting the Law of the Sea treaty. It is ironic that conservative nationalists have so long blocked the U.S. Senate’s ratification of this treaty, thus frustrating the U.S. Navy and inadvertently helping China’s disruptive position. The U.S. government can maintain its rights without picking a fight or getting out ahead of what the regional claimants (such as Vietnam and the Philippines) consider vital.
The new Administration will be committed to a military buildup. In the Pacific, the best focus might be on how to diversify America’s capabilities to defend allies and control sea lanes, to be even less reliant on carrier battle groups. This can help reassure friends as China considers whether or how to increase pressure to secure export markets and access to critical resources.
In military planning, China is developing an area denial strategy to keep U.S. naval and air power at a distance. U.S. policy is contemplating what the Defense Department calls its “Third Offset” strategy, which could launch precision strikes against Chinese missile systems based deep inside China. Instead of pursuing what the Chinese might perceive as a highly threatening and destabilizing posture to strike many targets deep inside their homeland in a conventional conflict that could break out very quickly, a more stabilizing U.S. regional posture in East Asia might be a strategy of mutually assured denial.
China’s comparative military advantage lies in land-based missile systems. The United States has a comparative advantage in offshore naval power, below as well as above the surface. America’s treaty allies, such as Japan and Australia, can also field high quality naval forces. In short, both sides will be able to disrupt access to the critical sea lanes of East Asia. Mutual deterrence could be relatively stable. Also, for years to come, China’s economy would suffer much more from such disruption than would the economy of the United States.
Meanwhile, it will be in China’s interest to adhere to its 2014 climate understanding with the United States. The Chinese leadership will downgrade the role of fossil fuels based on their own analysis, not because of international pressure to do it. But they need to be able to show themselves and their people that the other advanced powers are acting too and are not taking advantage of China’s efforts to protect its deteriorating natural environment.
Deal 2: North Korea
The Trump Administration will soon need to decide whether or how it can tolerate North Korean acquisition of a capability to strike the mainland United States with nuclear missiles. Before the North Koreans effectively test this capability, their program may become so advanced and dispersed that the window for stopping it will have closed.
The sanctions strategy seems pretty well exhausted. The strategy of asking China to coerce the North Koreans into some notion of compliance has been tried for a long time, also without success. My suggested deal with China would not try to make that strained relationship carry this further burden.
Barring some unforeseen circumstances, the remaining options tend to run in two directions. One is to accept the North Korean capability and rely on a buildup of American missile defenses, extending the approach already being deployed in South Korea to Japan and then to the continental United States (with a different mix of systems). The other direction would look to a more radical combination of diplomacy and military readiness for a preventive war.
A Trump Administration might consider both threats and incentives that have hitherto been off the table. The North Koreans say they want to eliminate the American threat: They demand a peace treaty and a withdrawal of U.S. forces from Korea. Well, we might be happy to do all these things if we are confident that the North Korean threat from nuclear, biological, and chemical weapons is eliminated.
On the threat side, the new Administration could develop a credible threat of preventive war. Its position under international law would be strong: North Korea’s nuclear tests and missile development have made that country an international outlaw, formally declared as such by several UN Security Council resolutions that have expressly invoked the security and defense provisions of the UN Charter.
Such a war could carry horrifying risks. North Korea could credibly threaten to attack South Korea and perhaps Japan as well. South Korea would be likely to oppose an American attack on the North. But a nationalist American posture would put the threat to America from North Korea first. It could force South Korea into the corner of being unable to block an American attack that would cause a Korean war, and then, to protect themselves, the South Koreans would have no choice but to join in such a war and defeat the North. The destruction of the North Korean regime is likely to be the minimum result of another escalated and devastating Korean war. If China finds itself forced to intervene in some capacity, it is unlikely to do so in order to save the current North Korean regime.
On the diplomacy side, the new Administration could also develop a credible offer. Less concerned about how the North Korean regime treats its citizens, willing to make deals with dictators, the Administration could offer to negotiate a peace treaty (with South Korea as a mandatory participant and an invitation to China to join the talks as well). It could put the American presence in Korea on the table too. But the price would have to be the verified elimination of North Korean WMD programs (not just stocks), verified with an on-site, go anywhere, inspection regime that would satisfy a very tough and skeptical set of U.S. negotiators.
The peace treaty idea is not new: President Bush 43 floated the idea with Chinese leaders and in 2012 a group of American former officials circulated a paper on the possible elements of such an approach in a Track Two dialogue with the North Koreans just after Kim Jong-un came to power.6 That diplomatic outcome might leave North Korea and South Korea free to develop their conventional forces. But that would not be nearly as threatening to South Korea, and hardly threatening at all either to Japan or to the United States. Just the fact of such a peace treaty process is likely to have large and unpredictable effects on political life and society north and south of the DMZ.
The choices described above are serious and stark. Yet so are the intelligence and policy judgments the new Administration will face on just what North Korean nuclear developments Americans feel they can safely tolerate.
Deal 3: North America
President-elect Trump has vowed to tear up and renegotiate NAFTA. It is worth recalling that President-elect Obama made the same promise. But even granting the premise of economic nationalism, America and American workers will fare better in the global economy with a grand strategy conceiving of a North American base for global competition. President-elect Trump made this argument himself on August 31 at his press conference with Mexican President Enrique Peña Nieto, when he said that NAFTA should be “updated” with improvements “that would make both Mexico and the United States stronger and keep industry in our hemisphere. We have tremendous competition from China and from all over the world. Keep it in our hemisphere. Workers in both of our countries need a pay raise, very desperately…. There’s a lot of value that can be created for both countries by working beautifully together.”
The usual discourse is to see the United States versus Mexico—we threatened by their immigrants and their low wage work force. The argument is that Americans lost, and Mexicans gained. It’s not true. The positive sides of the agreement for both countries have actually been substantial. But step back and ask: What if North America could be rearranged so that, instead, the Mexicans were the big losers? Would the United States then be better off as a result?
The new Administration will definitely do all it can to restrict and control immigration to the United States from Mexico and Central America. Perhaps the hope is that, if Mexico is further impoverished by the loss of the new industries, retail outlets, and consumer habits that NAFTA created, all that chaos and poverty can safely be confined south of the new wall. Is this hope realistic? Is it smart, even for American workers? Again, as President-elect Trump himself put it just a few months ago, “A strong, prosperous and vibrant Mexico is in the best interest of the United States and will help keep, for a long, long period of time, America together.”
At a time when the Mexican state has taken unprecedented steps to privatize old and corrupt state practices, when it is trying to control an epidemic of narco-violence that has killed more people than the war in Afghanistan, the United States might turn all these positive trends decisively downward. In Mexico, the great political beneficiary from such disruption would be just those political forces the Trump Administration dislikes the most, the leaders who are most statist, most anti-American. Such disruption could tip Mexico into deeper unrest, even into becoming a failed state, united only by inflamed hatreds. This cauldron would not be thousands of miles away, but right along our own borders, constantly touching the lives of tens of millions of kindred and concerned American citizens.
An alternative deal would see an improved NAFTA as a strategic economic alliance empowering North America. In 2005 Caterpillar moved a casting plant for small engines from Mapleton, Illinois to Saltillo, Mexico. So 560 jobs were lost in Mapleton. But Caterpillar was creating a North American supply chain. It built a brand-new factory in San Antonio, Texas to take the castings from Saltillo and further machine them. Then the products were shipped out of the Port of Houston for sale to markets across the world. The 560 jobs lost in Mapleton led to 1,500 new positions in Illinois, plus more jobs in Texas.
When Caterpillar offshored to China, it did move a good part of the production process to Asia. When Caterpillar offshored to Mexico, it designed a North American supply chain with intermediate goods moving back and forth, creating a win-win situation for the continent. The largest bread baker in the United States is a Mexican company, Grupo Bimbo, which also includes brands like Mrs. Baird’s and Sara Lee.
If the Trump Administration wants to build new walls on the border, the deal could also include construction of new bridges. Not just metaphorical bridges either: Every day the four antiquated bridges crossing the Rio Grande in Laredo carry 12,000 trucks and 1,200 railcars filled with goods. While strengthening immigration controls, the deal could also include greatly improved infrastructure and procedures to speed and facilitate movement of goods and services.7
North America needs a champion in the Federal government, working with state, local, and provincial officials on both sides of the border. NAFTA needs improvement, but the goal should be mutual benefit for North America to compete globally, not beggar-thy-neighbor policies that harm all parties. If Washington wants to make sure the economic deals are win-win for both sides of the border, then it needs to give the continental economy the attention it deserves. The security and rule of law challenges can surely use attention too, since they are as or more important than the security challenges in the Middle East and much closer to home.
Deal 4: Russia
There is limited scope for a deal with Russia. Although Putin sincerely believes the Americans became drunk with power, thrashing about in every direction with reckless arrogance, Putin and his clique need the American enemy for their own domestic reasons. They are defining Russia as the anti-liberal, spiritual, motherland alternative to the decadent West. They have forged opportunistic alliances with every other anti-liberal power, reviving both the trappings and the foreign policy doctrines of Tsar Alexander III (1881–94). Putin has authorized a wave of anti-Americanism in the political and popular culture of Russia unlike any seen since the worst days of the Cold War.
It is important to distinguish Russian and Chinese attitudes about the America and the West. The Chinese are still debating and deciding what kind of great power they wish to become. Future attitudes toward the United States are not yet fixed. Chinese leaders are predominantly concerned with domestic development and are relatively secure about their great power status, although they think others want to hem them in. They have their own scornful and irritated views about American leaders or officials, but lack the venom that flows so often into Russian attitudes.
The Russians are waging multiple small wars and frozen conflicts, tearing up Cold War-era treaties, and laboring under significant Western economic sanctions. The Chinese are not doing any of these things or suffering any of these debilities.
To imagine a deal with Russia is therefore to imagine a détente, a managed relaxation of tensions. The usual notion of a U.S.-Russian deal spotlights cooperation against radical Islamic terror. There is something to this. But the ingredients require some practical understandings across a series of issues:
- Syria. Work with Russia and other key parties for a ceasefire with regional stabilization and defined zones of interim control, excluding ISIS but including territory claimed by ISIS. The Assad regime rules its zone of control. The future of Syria should be deferred to a further political process. The urgent task is to stabilize the situation on the ground, stop the fighting, and help manage the refugee crisis, including its spillover into Jordan and Lebanon. The U.S. government would have to decide what aspects of this agreement it is willing to enforce with military power, as it aids in the continued campaign to defeat ISIS.
- Iran. The U.S. government will need to retain credible military options to enforce Iranian compliance with the nuclear deal. Although Russia has completed delivery of its S-300 air defense system to Iran, the Administration must judge if it needs further understandings about the limits of Russian-Iranian military cooperation and, if so, how to attain this objective.
- Ukraine. The United States and relevant European partners should undertake negotiations with Ukraine and Russia about the future of disputed territories and multilateral sanctions and the possibility of a formal settlement. Meanwhile the Administration must strengthen the credibility of the NATO deterrent in NATO member states. But NATO accession of Montenegro?
- Cybersecurity. The Administration must work with its relevant European partners to decide on appropriate and proportionate responses to Russian covert interventions in their domestic political processes.
- Afghanistan (and Pakistan). The Administration should intensify discussions with both Russia and China about the future of Afghanistan, especially given the growing scope of Chinese interests in both Afghanistan and Pakistan.
The blunt strategic facts are that, beginning in 2014, Russia has carried out a series of carefully designed campaigns in Ukraine and Syria. These campaigns have been substantially successful, at least in military terms. So the issue now is whether to have more simmering or frozen conflicts or attempt to find deals that stabilize and manage the results on the ground.
In the case of Ukraine: Russia will not leave the Crimea. Nor, whatever it says, will this Russian leadership cease its efforts to humble and weaken an independent Ukrainian state. The future of Ukraine turns, above all, on Ukraine’s own capacity to rebuild its civic and economic institutions, a more urgent task than the military balance. Ukraine’s recent efforts have not been encouraging. In thinking about the design of a diplomatic strategy for the next stage, America’s most important partner will be Germany.
The current diplomatic strategies to settle the Syrian civil war are bankrupt. At this stage, the incoming Trump Administration does not have good prospects for being able to organize a coalition to reverse the Russian gains.
Deal 5: Muslim Partners
The war against radical Islamic terror is a transnational struggle. It is a war mainly pitting Muslim against Muslim, with clashing visions for the future of Islam. All sides accuse the other of being the puppets of wicked unbelievers, apostates within their own faith or foreigners like Americans and Europeans. The Islamist extremists want to turn this struggle into a simple global picture: Muslims versus the decadent infidel West (and its apostate allies who pretend to be good Muslims). Of course, a sensible U.S. strategy would not reinforce or validate this picture. Hence the fight must be led by Muslims.
Also, the U.S. government does not want to send hundreds of thousands of soldiers back into the Muslim world. So, again, the fight must be led by Muslims. And this fight, as is happening right now in Mosul, may be house by house by house.
If the fight must be led by Muslims, then who? There are many choices to consider, region by region. But to start, the Administration must decide if it wants a deal, or a fight, with leaders in key frontline states: Saudi Arabia, Pakistan, Turkey, Iraq, Egypt, and Indonesia.
- Saudi Arabia. For reasons that are partly valid, partly false, and significantly out of date, Congress has passed the JASTA law to pick a large fight with Saudi Arabia, by opening it up for multibillion-dollar lawsuits and much strife. There is much that can be said about Saudi Arabia’s past behavior, but imagine that Saudi Arabia would do everything it could to become the country outside well-wishers hope it could be, bounded by what is possible in the real world. Now, in the winter of 2016–17, Saudi Arabia’s leaders are attempting reforms that would have been on the outer edge of what could have been imagined only a couple of years ago. Saudi Arabia is bogged down in a fight against radical Islamic terror and Iranian-backed rebels in Yemen. Oil revenues are way down; the future of the Kingdom has never been so uncertain, so full of possibility and danger. In other words, this is a uniquely bad time for a U.S. Administration committed to a war against radical Islamic terror to pick a fight with the Kingdom. The JASTA law needs another look, and the United States must take an active and committed interest in the prospects for the Saudi reform program. Although all the attention in the arguments over JASTA has been focused on Saudi Arabia (the standard “deep-pocket” defendant), the easiest target for the lawsuits allowed under the law would be Pakistan. No one now working in the U.S. government will have high hopes about Pakistan as a partner. The strategic problems for the United States are to imagine how much worse the situation could get, the implications for sustaining a continued, significant U.S. military presence in Afghanistan, and planning for even more dangerous contingencies.
- Turkey. A Trump Administration instinct for betting on strongmen who will keep order will certainly resonate with Erdogan. But will his Islamist leanings resonate with them? This is a case, however, in which a deal may make sense. Turkey wants to again become a regional power. Its ambitions will need to be reconciled among the divergent Kurdish factions (some at war with Ankara, some allied with it), with Russia and its Assad regime ally, and with Iraq. The U.S. government can play a role in facilitating a settlement that may, eventually, allow the United States to step back. Who will run the Sunni regions retaken from ISIS? The U.S. government is aiding a military strategy that has enjoyed some success, but the political strategy has not kept pace, despite good efforts from the U.S. envoy, Brett McGurk. The U.S. government is trying to do its part to build up local Sunni partners to rule their communities, supported by an Iraqi central government willing to wield a light hand and hold back its own extremist Shi’a factions. At the moment, Americans are playing a key part in holding together a very fragile military coalition, but they will probably need to expand that role in order to have the influence to enable a political strategy to work.
- Egypt. Outsiders may have high hopes that Egypt’s ruler, General Sisi, can be a tower of strength in opposing Islamist extremism. He would like to play that role. But he does not yet have Egypt itself in a good place and the trend lines, in security and economics, are ominous. So the U.S. government can find the basis for a deal with this Muslim partner, but that does not extend far beyond the challenge in Egypt itself.
- Indonesia. One of the most populous Muslim countries on earth, Indonesia does not get as much attention as it deserves, because it is thankfully not yet in dire crisis. The country has as promising a leader as any in recent years. It confronts serious Islamist threats. Indonesia is also an interesting example of why it is worthwhile to work in partnership with Saudi Arabia. The Saudis and other Arab states have played a disproportionate part in changing Islamic discourse in Indonesia, not for the better. The U.S. government and other interested countries (like Singapore and Australia) could have much to discuss.
In reviewing the lineup of possible partners, Egypt is constrained and Pakistan is troubled, at best. The U.S. government is already working well with some of the smaller countries, like the United Arab Emirates and Jordan, and will continue doing so. But given the situation, the United States probably needs to invest the time and effort to construct workable deals with Turkey, Saudi Arabia, and the fragile governments (central and local) in Iraq as a starting point. These will be but some of the many coalitions that will be involved in this era of Islam’s wars of religion.
It will soon be time to cross the ‘t’s and dot the ‘i’s of Donald Trump’s vision of America in the world. There is plenty of give in how that gets done. It can be done wisely, or not so wisely. Tradeoffs will need to be recognized and made, and actual policy will need to move from abstractions to specific implementation. Now is the time to think through what this real transition process requires as domestic and international policies inevitably interact with each other. This transition is never easy. It will not be any easier this time around. We must all do what we can, with what we have, where we are. Theodore Roosevelt’s other piece of famous advice also remains as valid as ever.
1Theodore Roosevelt, An Autobiography (1913) (Library of America, 2004), pp. 789, 790, 791.
2This more nationalistic emphasis in American economic statecraft resonates with recent argument of “establishment” foreign policy voices, like the recent book by Robert Blackwill and Jennifer Harris, War by Other Means: Geoeconomics and Statecraft (Harvard University Press, 2016).
3I held the pen for a group of more than fifty business executives, tech experts, and civic leaders called Rework America, sponsored by the Markle Foundation and co-chaired by Howard Schultz of Starbucks and Zoe Baird of Markle. The group had plenty of Republicans as well as Democrats. The title of our book was America’s Moment: Creating Opportunity in the Connected Age (Norton, 2015), a pretty nationalistic title and deliberately so.
4In addition to DiMicco’s own American Made (St. Martin’s, 2015), this literature includes James Bessen, Learning by Doing: The Real Connection Between Innovation, Wages, and Wealth (Yale University Press, 2015); the work of Suzanne Berger and the MIT Task Force on Production in the Innovation Economy, Making in America: From Innovation to Market (MIT Press, 2013); and recent books like Mass Flourishing from the late Nobel prizewinner Edmund “Ned” Phelps (Princeton University Press, 2013) and Gary Pisano & Willy Shih, Producing Prosperity (Harvard Business Review Press, 2012). There is also inspiration in The Atlantic series by James Fallows on dynamic changes in overlooked American cities (including the cover story in the March 2016 issue), and crucial data in work by the McKinsey Global Institute, such as their report on Manufacturing the Future (2012).
5Arabs frequently use the Saudi/Egyptian term ‘taqfiri,’ which is meant to describe a fanatical Muslim who is much too ready to brand fellow Muslims as apostates. To be called an apostate can be as deadly as when inquisitorial Christians, centuries ago, used the label ‘heretic.’ Thus the term ‘taqfiri’ is both pejorative and expressive.
6I presented the paper at this Track Two meeting, which was held in Germany. Obama Administration officials were duly briefed before and after these discussions. North Korea’s new leader turned quickly toward internal purges and external confrontation, and the idea stayed on the shelf.
7A task force of the Council on Foreign Relations on “North America” recently spelled out plenty of good ideas for such a deal. The task force was an unusual one, chaired by former general and CIA director David Petraeus, along with former World Bank President Robert Zoellick, and directed by Shannon O’Neil.