Pinkerton: Josh Hawley Explains How to Take on China and Save America

On May 20, speaking from the Senate floor, Josh Hawley, the youngest member of the chamber, laid out his plan for fixing international trade, taking on the People’s Republic of China, and thereby, too, saving America.   

In so doing, Hawley, populist firebrand that he is, showed that he was willing to overturn the stale orthodoxies that have mildewed our economy and undermined our security.

In his speech, Hawley laid out the core problem: The People’s Republic of China (PRC) has taken advantage of the flaws built into the current international economic system, embodied in the World Trade Organization (WTO), that agglomeration of unelected globalcrats.  As Hawley put it, “We must recognize that the economic system designed by Western policy makers at the end of the Cold War does not serve our purposes in this new era.”  He added, “And we should admit that multiple of its founding premises were in error.”

Those founding premises, Hawley continued, trace back to the save-the-world utopianism of our 28th president, Woodrow Wilson.  Having entered World War One in 1917, Wilson had some strange ideas; for one thing, it would be “a war to end all war,” and, he added, we must strive for “peace without victory.” Yes, such concepts might seem a bit, well, unrealistic; you know, like the musings of an ivory-tower professor.  In fact, Wilson had been a professor and subsequently, in fact, he held presidency of Princeton University before winning the White House.  So maybe now we can see the origins of his vaulting but vacuous phrasemaking. 

Indeed, without a doubt, Wilson was a great talker; he wove webs of words and theories that have bewitched many politicians since, inspiring them to be wannabe Wilsonians. 

For instance, there was George W. Bush, who said he heard “a calling from beyond the stars,” summoning America to wars of choice, aimed at “ending tyranny in our world.”   Well, we know how that worked out.  

As Hawley said, “During the past two decades, as we fought war after war in the Middle East, the Chinese government systematically built its military on the backs of our middle class.” Exactly. While we were liberating Fallujah for the third or fourth time, the Chinese were hollowing out our economy. 

Of course, Bush wasn’t our only warlike president in the past two decades; we also had Bill Clinton and Barack Obama, both of whom launched foreign interventions as well, even as they were welcoming Chinese products and influence into the U.S.  Indeed, as an aside, one wonders what Obama’s vice president, Joe Biden, thinks of all this: Has he learned the lesson of Iraq and other quagmires?  Has he rethought trade with China? Those are certainly good questions to be answered during the remainder of the 2020 campaign season.  

Okay, back to Hawley. Having raised serious questions about the status quo, he offered three specific answers:

First, we should withdraw from the World Trade Organization.  As Hawley put it, the WTO was built on a false promise: the idea that the nations of the world would converge around a fair and non-manipulated trading system; as the Missourian put it, “they wanted a single liberal market to support a single, liberal international order that would bring peace in our time.” Yet in the decades of the WTO’s existence, the countries of the world haven’t come together on much of anything—except, perhaps, to snooker Uncle Sucker.

And we might pause to note Hawley’s slyly ironic use of the words, “peace in our time.”  That’s an allusion to the catastrophically mistaken statement of British prime minister Neville Chamberlain; back in 1938, Chamberlain made a wrongheaded deal with Adolf Hitler, which he said would bring “peace in our time.”  Wrong!  

Yes, Hawley is saying, the stakes today are potentially that high; we can’t stay in an organization that has “not been kind to America.”  He added, “The WTO’s dispute resolution process has systemically disfavored the United States”—and favored China.  

Second, Hawley says that having left the WTO, the U.S. should negotiate new trade deals on a more reciprocal and bilateral basis; that is, the U.S. should make a trade deal with, say, the United Kingdom—and then on to another deal with the next potential trading partner.  As Hawley explained, “We must replace an empire of lawyers with a confederation of truly mutual trade.” 

Indeed, Hawley argues that a new focus on win-win trade deals—as freely determined by the two countries actually involved in the deal, as opposed supranational WTO-crats—deals that would offer a new opportunity for the U.S. to put together better alliances, based on mutually beneficial economic and strategic relationships: 

We benefit if countries that share our opposition to Chinese imperialism—countries like India and Japan, Vietnam, Australia and Taiwan—are economically independent of China, and standing shoulder to shoulder with us.  So we should actively pursue new networks of mutual trade with key Asian and European partners, like the economic prosperity network recently mentioned by Secretary Pompeo. 

We might pause over one of the countries Hawley mentioned above, Taiwan.  Its  formal name is the Republic of China (ROC), an island nation whose capital is Taipei. In other words, the ROC is separate and very much distinct from the People’s Republic of China, whose capital, of course, is Beijing. The two nations split in 1949, when Mao Zedong’s Soviet-backed communists took over the mainland.  In the decades since, the ROC, population 23 million, has become a prosperous and free country, while the PRC is merely … prosperous.  (And, of course, menacing.)  

So it’s notable that Hawley has become a strong champion of Taiwan, which stands not only as a bulwark against the PRC, but also as proof that the Chinese people, if given a choice, will choose freedom.  

Third, Hawley wants to crack down on the ability of international capital, including Wall Street, to hopscotch the world—and step all over the people of the world. As Hawley explains about the current WTO dominion,   

There is a reason why Wall Street loves the status quo. There is a reason why they will object to leaving the WTO and resist major reforms to our global economic system.  That’s because they are on a gravy train of foreign capital flows that keep their checkbooks fat.

Indeed, underneath all the complexity of international finance, there’s a simple enough bottom line; Wall Street, and global capital as a whole, profit from international arbitrage.  This international “arb” is the system of playing off one country’s tax-, regulatory- and wage-systems against another country’s—and seeking to profit from both sides of the equation.  

Indeed, here in the U.S., in the last few decades, it’s been easy for financial companies to play this arbitrage game.  In effect, they have issued the following ultimatum to American industrial companies: “You must outsource or relocate to China, because the taxes/regulations/wages are lower there.  If you do so, we’ll reward you by bidding up your stock price here in the U.S.  But if you don’t, maybe we’ll buy you, replace the management, and then move to China.  Or maybe we’ll buy your competitor, move it overseas, where it can take advantage of the lower costs, undercut you—and put you out of business.”

This ultimatum, repeated thousands of times, reminds one of Marlon Brando’s famous line from The Godfather: “I’m gonna make him an offer he can’t refuse.”

Many millions of lost American jobs later, we’ve learned how few companies have been able to refuse this sort of “offer.” 

Hawley makes it clear: As a nation, we’ve dug ourselves into a deep hole.  And in the meantime, the PRC is on the move: On May 21, the South China Morning Post, a Hong Kong-based newspaper under the sway of the Beijing government, reported on the PRC’s plan to allocate an additional $1.4 trillion for technological mobilization.  So yes, we face a clear and present danger. 

Fortunately, a clear-eyed understanding of a threat is not the same as a downcast bowing down to it.  What we need to do is build on our understanding—and turn that understanding into action.   

Hawley is just one senator, and in terms of seniority, a very junior one at that.  And yet he thinks with a wise historical sweep that could—and should—change the policy course of America.  As he said:

We can build a future that looks beyond pandemic to prosperity—a prosperity shared by all Americans, from our rural towns to the urban core.  We can build a future that looks past a failed consensus to meet our national security needs in this new century.

Yes, if we can build that future for ourselves—reuniting the nation around a renewed appreciation of the common good, as well as a newfound apprehension of the common threat—then we have a fighting chance.  And if America can pull together an alliance of other like-minded nations, all fearful of the Red Dragon, then we all have a strong prospect of success.  

Because darn few people anywhere wish to live in tyranny. And the Chinese Communist Party is tyrannical.