The deadly dance of the Eagle and the Dragon: Part 3 America's Strategy

Trump is no doubt a strong leader and the majority of his policies are the right ones to reassert American influence. However domestically Trump, and thus America, are in a precarious position. Trump faces dissension at all levels, and perhaps even more seriously, the on-going potential of impeachment. This domestic resistance has impeded some of his chosen policies, foremost of which is his Russian policy. This was designed to pull Putin back into the western fold and thereby surround China as was once the USSR in the cold war.

In the Book of The Future contained within BTCH dating back to 2010, I suggested nine key elements to implement a successful America containment policy of China:

  1. Learn To respect and understand Chinese history and Culture
  2. Stabilize the US Financial system, especially with respect to its debt burden
  3. Be prepared for a wave of Chinese innovation
  4. Focus resources on containing China, including increased military spending. 
  5. Develop a centralized resource strategy
  6. Counter the Chinese push back strategy against America
  7. Pay closer attention to Africa and Chinese aspirations to control it.
  8. Form new military alliances to counter direct Chinese military challenges
  9. Expound a politically inclusive policy toward China in a new global order

Disappointingly the reality has been somewhat divergent. Obama gave away America power and influence to the Chinese, leaving Trump with much ground to make up. So far only points number four and eight have been acted upon by Trump, with the other elements having little or no attention paid to them. Notably, it is now too late for point nine, as China’s aspirations are fully revealed and it is engaged on its own course. Time is not on America's side if it is to have any chance of maintaining a position of strength and deterring WW3 in 2025. It must give the highest priority to all eight points to maximize its capability to contain China.

Trump's playbook is a simple one; reverse all Obama’s policies of the great power give away, and reassert economic and military dominance over China. Economic dominance has been encouraged by lowering taxes and increasing Federal borrowing. Meanwhile, the American strategy of economic containment of China is represented by the trade war that America has instigated. This is not a short term spat, but rather a result of the building tectonic pressure caused by the rise of China. We should only expect this situation to become worse, rather than improve with time. The consequence will be a bifurcated world much like the old cold war east-west scenario.

The military component to the Eagles pushback has been clearly demonstrated by increased defence spending, and a focus by the nation’s military resources on China’s containment. This containment of China has been diluted by the Russian threat and the failure of European powers to spend enough on defence to defend against Russia without America aide. One of the key flagship weapon systems in American global power is the 11 carrier policy and the build-out of the USN to 350 ships, if not more over time. Notably, the arrival of the F35B into service is a game changer, as it means that assault carriers can embark state of the art marine F35B vertical takeoff fighters, increasing the USN’s carrier capability by 8 platforms in a very short space of time.

Domestically the divisive internal forces are weakening Trump's focus on the key issue of the pushback of China. Domestic polarisation can only be overcome if Trump can find a way to bond the divisive elements in his nation by focussing the nation's energy onto a common existential threat. In that regard the age-old solution is to find a powerful American enemy, presenting a clear and present danger, whose threat would hold back the forces of fraction and dissension by bonding them against a common enemy. Therefore in addition to being the right policies, this domestic political need will only add impetus to the campaign to escalate the America-Chinese trade war to its highest levels in the short term. From that point, a debt war will inevitably follow. Incidentally, if the potentially vast economic damage could be contained to save key institutions, then the fastest way to unleash the US economy would be to have a total debt bonfire, which would allow taxes to be lowered. Whilst this sounds like madness many emerging market countries have survived and then grown after such debt defaults, and Trump himself in his business has had experiences of default. This scenario should not be totally ruled out as desperate times reveal desperate measures.

Notably, BTCH believes that Trump was prepared (and probably is still willing) to go to war with North Korea if they will not enter into negotiations.  One of his drivers being the need for an existential threat to ease the venom of his domestic political opponents. Although America has a chance to limit China's growth in the short term, which will be critical to avoid a global war at the peak of the next commodity cycle in 2025/27, any relative gain in American power will be relatively short-lived and thus will only be another false dawn over the long term. Over the next ten years it is critical to the stability of the world that America maintains its strength whilst there is a great power transition from West to East.