RUTHFULLY YOURS

The contrast with the two previous administrations is stark. The Trump report praises American values and institutions but betrays no ambition to remake the world in America’s image after the fashion of George W. Bush. Nor does it accept the slow decline of American influence into a geopolitical mush of multilateralism per the “soft power” conceit of the Obama Administration. It is centered on the American economy, the American homeland, and American interests, but it proposes a rough-edged activism where American interests are threatened that will make the world a less predictable place during the next several years.

The report admonishes China and Russia on a number of grounds. Beijing and Moscow will take the report in stride, gauging carefully where Washington might alter the strategic balance. But the new report will cause alarm in Tehran. For the past dozen years – since Robert Gates replaced Donald Rumsfeld as America’s Defense Secretary in 2006 – American policy has sought to include Iran in the regional security architecture. The Trump Administration’s strongest language is directed towards Iran, and the Shi’ite regime’s response is incalculable. Some analysts believe that Iran already is inclined to go to war with Israel, and the new report may prompt the militaries of several Middle Eastern nations to raise their level of alert.

The report embraces the term “America First,” by which Trump means that national security depends first of all on fixing what is wrong in America: a shrinking industrial base, disrepair in infrastructure, sagging innovation, inadequate scientific and technical education, and an excessive federal debt burden. Although the report promises a crackdown on forced technology transfers, intellectual property theft, and other forms of “economic aggression,” it identifies the problem and its solution in domestic US policy: tax reform, deregulation, innovation policy, budgetary controls and education.

The contrast with the two previous administrations is stark. The Trump report praises American values and institutions but betrays no ambition to remake the world in America’s image after the fashion of George W. Bush. Nor does it accept the slow decline of American influence into a geopolitical mush of multilateralism per the “soft power” conceit of the Obama Administration. It is centered on the American economy, the American homeland, and American interests, but it proposes a rough-edged activism where American interests are threatened that will make the world a less predictable place during the next several years.

The report admonishes China and Russia on a number of grounds. Beijing and Moscow will take the report in stride, gauging carefully where Washington might alter the strategic balance. But the new report will cause alarm in Tehran. For the past dozen years – since Robert Gates replaced Donald Rumsfeld as America’s Defense Secretary in 2006 – American policy has sought to include Iran in the regional security architecture. The Trump Administration’s strongest language is directed towards Iran, and the Shi’ite regime’s response is incalculable. Some analysts believe that Iran already is inclined to go to war with Israel, and the new report may prompt the militaries of several Middle Eastern nations to raise their level of alert.

The report embraces the term “America First,” by which Trump means that national security depends first of all on fixing what is wrong in America: a shrinking industrial base, disrepair in infrastructure, sagging innovation, inadequate scientific and technical education, and an excessive federal debt burden. Although the report promises a crackdown on forced technology transfers, intellectual property theft, and other forms of “economic aggression,” it identifies the problem and its solution in domestic US policy: tax reform, deregulation, innovation policy, budgetary controls and education.

Early press coverage already has misrepresented the report as a trade-war screed. It is nothing of the sort: on the contrary, it repudiates the complacency of the past several administrations who presided over a gradual deterioration of America’s competitive and strategic position. Trump’s opponents in both major parties pegged him as an isolationist. On the contrary: He proposes a muscular kind of global activism, fostering new alliances while reinforcing America’s existing commitments – but an activism of an entirely different order than the nation-building ambitions of the last Republican administration.

A centerpiece of Trump’s national security plan is a layered missile defense, including the capability to destroy enemy ICBM’s before launch. This portends a radical departure from previous US policy, which restricted anti-missile defense to systems that remained within the prohibitions of the 1972 ABM Treaty, despite America’s withdrawal from the treaty in 2002. What changed, the report argues, is that “rival states modernize and build up their conventional and nuclear forces. Many actors can now field a broad arsenal of advanced missiles, including variants that can reach the American homeland. Access to technology empowers and emboldens otherwise weak states,” notably North Korea.

China and Russia doubtless will react to this declaration with dismay, but the outcome is to a great extent their own fault. By aiding the North Korean missile program either by acts of commission or omission, Moscow and Beijing left the United States with no means of disarming the rogue regime in Pyongyang. They cannot blame America for taking measures to protect its homeland. Trump proposes the response to the North Korea crisis that this writer recommended in an August 11, 2017 commentary.

The Trump national security plan also proposes

• Swift and decisive action against states that support terrorism, including incursions against such foreign terrorist organizations as ISIS and Hizballah;
• Retaliation against “economic aggression” by countries that “espouse free trade rhetoric and exploit its benefits, but only adhere to the rules and agreements selectively;”
• Embracing “energy dominance” by removing obstacles to exploitation of shale and other domestic resources to make America more than self-sufficient in energy, including development of nuclear and other power sources;
• A new system of alliances centering on India and Japan in Asia to counter Chinese economic diplomacy in the region;

The Trump strategy does blame America’s competitors for its economic problems, let alone propose a trade war. The term “tariff” does not appear at all in the draft copy reviewed by this publication; ostensible currency manipulation is nowhere mentioned; and the term “dumping” appears only once. Instead, the report takes aim at the industrial policy of Asian nations who “subsidized their industries, forced technology transfers, and distorted markets. These and other actions challenged America’s economic security.” But the next sentence makes clear that America’s injuries for the most part were self-inflicted: “At home, excessive regulations and high taxes stifled growth and weakened free enterprise – history’s greatest antidote to poverty. Each time government encroached on the productive activities of private commerce, it threatened not only our prosperity but also the spirit of creation and innovation that has been key to our national greatness.”

China, emulating Japan and South Korea, subsidizes investment in capital-intensive industries. Subsidized capital has driven high-tech manufacturing out of the United States, as this and other writers have documented. Keeping defense-critical industries onshore is essential to national security policy, and in this respect the new report states the obvious.

What Trump and his team have in mind is far more challenging than a trade wrangle. They propose a comprehensive transformation of regulatory, tax, education and defense industrial policy to restore America’s commanding position in high-tech research, development and manufacturing. Trade policy is only one of a set of policy instruments directed at achieving strategic superiority. There is little for Beijing to like in this document, and it will be no consolation at all that if the Trump policy succeeds, America will sustain a significantly higher growth rate and, presumably, higher imports from China among other nations.

Stating these objectives is one thing. Achieving them is quite another. China now awards four times as many STEM (science, technology, engineering and mathematics) degrees as the United States and twice as many doctorates. One in three Chinese undergraduates majors in engineering, compared to one in 16 in the United States. After Soviet Russia surprised the world with the first successful satellite launch in 1957, the Eisenhower Administration had its “Sputnik moment,” and poured resources into scientific education. This contributed to a golden era of American innovation where the Department of Defense and NASA spurred American laboratories, mostly under the aegis of major corporations, to invent the entire range of technologies that define the digital era, from cheap and light microchips to lasers, sensors, displays and the Internet that binds them together.

The great corporate laboratories of the Bell System, General Electric, RCA, Westinghouse and IBM are all but gone, and the national laboratories have shrunk in size and ambition. It will be a Herculean task to revive America’s unique capacity to bring scientists, engineers and entrepreneurs together for the rapid deployment of new technologies into military as well as civilian use.

America’s policy towards China as such will preserve the status quo, the document states. “We will maintain our strong ties with Taiwan in accordance with our ‘One China’ policy, including our commitments under the Taiwan Relations Act to provide for Taiwan’s legitimate defense needs and deter coercion.”

Without making direct reference to China’s One Belt, One Road infrastructure initiative, the national security report proposes to challenge China’s growing dominance in Asia. “While the United States seeks to continue to build a strong relationship with China, China is using economic inducements and penalties, influence operations, and implied military threats to persuade other states to heed its political and security agenda. China’s infrastructure investments and trade strategies reinforce its geopolitical aspirations,” the document states.

The report adds that China’s “land reclamation projects in and militarization of the South China Seas flouts international law, threatens the free flow of trade, and undermines stability. China has mounted a rapid military modernization campaign designed to limit US access to the region and provide China a freer hand there. China presents its ambitions as mutually beneficial, but Chinese dominance risks diminishing the sovereignty of many states in the Indo-Pacific.”

Left rather vague, though, is the means by which the United States might bell the Chinese cat in Asia. The report proposes to “expand defense and security cooperation with India,” to “re-energize our alliances with the Philippines and Thailand,” and “strengthen our partnerships with Singapore, Vietnam, Indonesia, Malaysia, and others, and help them become cooperative maritime partners.” Whether this is boiler-plate or reflects new policy thinking remains to be seen. Against China’s $1 trillion commitment to the Belt and Road Initiative, India and Japan have proposed an “Asia-Africa Growth Corridor” with a budget of just $30 billion. This is unconvincing, to say the least. Some Japanese analysts argue that Japan cannot beat China and therefore should join its infrastructure program.

In theory, the United States might work together with Japan – which has more net foreign assets than China – and India, and entice Southeast Asian countries who rankle at Chinese dominance to eschew the Belt and Road Initiative in favor of an Sino-Indian-American alternative. Thailand is a traditional American ally with closer economic ties to Japan, and Vietnam has compelling strategic reasons to assert its independence from China, for example. In this scenario, China’s influence would fall mainly on Pakistan, Iran and Turkey, three countries with severe economic, political and demographic challenges, while the far more robust economies of Southeast Asia would remain within the American sphere.

The world economy would only benefit from global competition between a Chinese and an American-Japanese-Indian consortium to build Asian infrastructure. But the national security report offers no details of Administration thinking. The report states only:

China is investing billions of dollars in infrastructure across the globe. Russia, too, projects its influence economically, through the control of key energy and other infrastructure throughout parts of Europe and Central Asia. The United States provides an alternative to state-directed investments, which often leave developing countries worse off … The United States will shift away from a reliance on assistance based on grants to approaches that attract private capital and catalyze private sector activity.

That is well and good, but in contrast to China, the United States is doing very little by way of infrastructure investment of any kind.

Another radical change in American policy affects the Middle East. In place of an Israeli-Arab conflict, the Trump Administration envisions a de facto alliance between Israel and some Arab states, notably Egypt and Saudi Arabia: “For generations the conflict between Israel and the Palestinians has been understood as the prime irritant preventing peace and prosperity in the region. Today, the threats from radical jihadist terrorist organizations and the threat from Iran are creating the realization that Israel is not the cause of the region’s problems. States have increasingly found common interests with Israel in confronting common threats.”

Iran merits 16 mentions, as a sponsor of terrorism and as a potential threat to the American homeland through weapons of mass destruction. “The scourge of the world today,” the report avers, “is a small group of rogue regimes that violate all principles of free and civilized states. The Iranian regime sponsors terrorism around the world. It is developing more capable ballistic missiles and has the potential to resume its work on nuclear weapons that could threaten the United States and our partners.”

The threat of jihadist terror is mentioned 29 times in the report, which abandons such euphemisms as “violent extremism” and instead denounces Islamists. That should be no surprise after President Trump’s speech to Muslim leaders in Saudi Arabia last May, but it denotes a dramatic shift from the previous 16 years of American policy. The report declares: “Jihadist terrorist organizations present the most dangerous terrorist threat to the Nation. America, alongside our allies and partners, is fighting a long war against these fanatics who advance a totalitarian vision for a global Islamist caliphate that justifies murder and slavery, promotes repression, and seeks to undermine the American way of life.”

Aggressive intervention against jihadist terror is promised. Under the rubric “take direct action,” the report states, “The US military and other operating agencies will take direct action against terrorist networks and pursue terrorists who threaten the homeland and US citizens regardless of where they are.” The report also promises to eliminate terrorist havens, sever their sources of finance and logistics, and to “deter and disrupt other foreign terrorist groups that threaten the homeland – including Iranian-backed groups such as Lebanese Hizballah.”

Europe comes into focus to the extent that it is perceived to face threats from, respectively, Russia, China, and Islamist terrorists. “Russia aims to weaken US influence in the world and divide us from our allies and partners. Russia views the North Atlantic Treaty Organization (NATO) and European Union (EU) as threats,” the report declares.

But it adds: “Europe also faces immediate threats from violent Islamist extremists. Attacks by ISIS and other jihadist groups in Spain, France, Germany, Belgium, the United Kingdom, and other countries show that our European partners continue to face serious threats. Instability in the Middle East and Africa have triggered the movement of millions of migrants and refugees into Europe, exacerbating instability and tensions in the region.” European capitals will read this with dismay: in so many words, the Trump Administration states that the migrant policies which the Western European governments crafted so carefully and defended so assiduously are the main threat to European security. European observers feared that “America First” implied that Trump would abandon America’s security commitment to Europe. The character of Washington’s interest in European security will make them more careful of what they wish for.

Excerpts of the report’s recommendations for the US economy follow below:

“We must rebuild our economic strength and restore confidence in the American economic model. Over decades, American factories, companies, and jobs moved overseas. After the 2008 global financial crisis, doubt replaced confidence. Risk-aversion and regulations replaced investment and entrepreneurship. The recovery produced anemic growth in real earnings for American workers. The US trade deficit grew as a result of several factors, including unfair trading practices.

“The United States will pursue an economic strategy that rejuvenates the domestic economy, benefits the American worker, revitalizes the US manufacturing base, creates middle-class jobs, encourages innovation, preserves technological advantage, safeguards the environment, and achieves energy dominance. Rebuilding economic strength at home and preserving a fair and reciprocal international economic system will enhance our security and advance prosperity and peace in the world.

“Despite low unemployment rates and stock market gains, overall economic growth has, until recently, been anemic since the 2008 recession. In the past five years, gross domestic product (GDP) growth hovered barely above two percent, and wages stagnated.

“Moreover, the poor state of our physical infrastructure stultified the economy, reduced the profitability of American small businesses, and slowed the productivity of American workers. America’s digital infrastructure also fell behind. Improvements in bandwidth, better broadband connectivity, and protection from persistent cyberattacks are needed to support America’s future growth. Economic and personal transactions are dependent upon the “.com world,” and wealth creation depends on a reliable, secure Internet.

• Reduce Regulatory Burdens
• Promote Tax Reform
• Improve American Infrastructure
• Reduce the Debt Through Fiscal Responsibility

“For decades, the United States has allowed unfair trading practices to grow. Other countries have used dumping, discriminatory non-tariff barriers, forced technology transfers, non-economic capacity, industrial subsidies, and other support from governments and state-owned enterprises to gain economic advantages.

• Adopt New Trade and Investment Agreements and Modernize Existing Ones:
• Counter Unfair Trade Practices:
• Counter Foreign Corruption

“Lead in Research, Technology and Innovation:  The United States will build on the ingenuity that has launched industries, created jobs, and improved the quality of life at home and abroad. To maintain our competitive advantage, the United States will prioritize emerging technologies critical to economic growth and security, such as data science, encryption, autonomous technologies, gene editing, new materials, nanotechnology, advanced computing technologies, and artificial intelligence. From self-driving cars to autonomous weapons, the field of artificial intelligence in particular is progressing rapidly. The United States must continue to attract the innovative and the inventive, the brilliant and the bold. We will encourage scientists in government, academia, and the private sector to achieve advancements across the full spectrum of discovery, from incremental improvements to game-changing breakthroughs. We will nurture a healthy innovation economy that collaborates with allies and partners, improves STEM education, draws on an advanced technical workforce, and invests in early-stage research and development (R&D).

“America’s business climate and legal and regulatory systems encourage risk taking. We are a nation of people who work hard, dream big, and never give up. Not every country shares these characteristics. Some instead steal or illicitly acquire America’s hard-earned intellectual property and proprietary information to compensate for their own systemic weaknesses.

“Every year, competitors such as China steal US intellectual property valued at hundreds of billions of dollars. Stealing proprietary technology and early-stage ideas allows competitors to unfairly tap into the innovation of free societies. Over the years, rivals have used sophisticated means to weaken our businesses and our economy as facets of cyber-enabled economic warfare and other malicious activities. In addition to these illegal means, some actors use largely legitimate, legal transfers and relationships to gain access to fields, experts, and trusted foundries that fill their capability gaps and erode America’s long-term competitive advantages. We must defend our National Security Innovation Base (NSIB) against competitors. The NSIB is the American network of knowledge, capabilities, and people – including academia, National Laboratories, and the private sector – that turns ideas into innovations, transforms discoveries into successful commercial products and companies, and protects and enhance the American way of life. The genius of creative Americans, and the free system that enables them, is critical to American security and prosperity. Protecting the NSIB requires a domestic and international response beyond the scope of any individual company, industry, university, or government agency. The landscape of innovation does not divide neatly into sectors. Technologies that are part of most weapon systems often originate in diverse businesses as well as in universities and colleges. Losing our innovation and technological edge would have far-reaching negative implications for American prosperity and power.

“Embrace Energy Dominance: For the first time in generations, the United States will be an energy-dominant nation. Energy dominance – America’s central position in the global energy system as a leading producer, consumer, and innovator – ensures that markets are free and US infrastructure is resilient and secure. It ensures that access to energy is diversified, and recognizes the importance of environmental stewardship.

“A healthy defense industrial base is a critical element of US power and the National Security Innovation Base. The ability of the military to surge in response to an emergency depends on our nation’s ability to produce needed parts and systems, healthy and secure supply chains, and a skilled US workforce. The erosion of American manufacturing over the last two decades, however, has negatively impacted these capabilities and threatens to undermine the ability of US manufacturers to meet national security requirements.

“Encourage Homeland Investment: The United States will promote policies and incentives that return key national security industries to American shores. Where possible, the US Government will work with industry partners to strengthen US competitiveness in key technologies and manufacturing capabilities. In addition, we will reform regulations and processes to facilitate the export of US military equipment. Protect and Grow Critical Skills: The United States must maintain and develop skilled trades and high technology skills through increased support for technical college and apprenticeship programs. We will support science, technology, engineering, and mathematics (STEM) efforts, at the federal and

“The United States must maintain its leadership and freedom of action in space. Communications and financial networks, military and intelligence systems, weather monitoring, navigation, and more have components in the space domain. As US dependence on space has increased, other actors have gained access to space-based systems and information.”

China is gaining a strategic foothold in Europe by expanding its unfair trade practices and investing in key industries, sensitive technologies, and infrastructure.