Day: April 7, 2018
A game of chicken
President Trump thinks a trade war will be easy to win.
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!
Like so much of what he says, that is false.
Let’s consider the warring parties. The US still has the larger economy, but exports much less to China than it imports from China. Trump has tweeted we therefore have less to lose. But that nonsense is based on the notion that imports represent losses and exports represent gains. That just isn’t true: for everything sold by China in the US, there is a willing buyer. Ditto in China: for everything the US sells there, there is also a willing buyer. US imports of Chinese goods and services, and Chinese imports of US goods and services, are a net plus for consumers in both countries, no matter what their impact on producers.
So the question is not who has less to lose, but rather the more canonical one in negotiation theory: who has a better alternative to a negotiated agreement (BATNA)? It is true that China will run out of US products it can levy tariffs on faster than the US will run out of products it can levy tariffs on, but that really doesn’t matter. China is a highly centralized polity that has lots of levers it can pull to hurt US companies doing business in China, which by the way are also main importers of US products. The US government will have a harder time doing this, because it lacks the same degree of control over American media, business associations, consumer groups, and politicians. Trump is already getting a lot of backlash against the tariffs from the agricultural sector, which the Chinese have targeted with their retaliation.
Centralized control is however also a vulnerability for China. At the national level, there are no “safety valves” to release social and political pressures that build up against the tariffs. Trump may lose big in the November election, in part because he has precipitated a big trade war, but he will remain in power (unless impeached and removed from office for other reasons). Xi Jinping has no election he can lose but still hold on to power, free media that can air grievances, or civil society to pressure his regime. Discontent could go directly to the street, especially if the trade war precipitates China’s first post-Communist recession. An autocracy has one main instrument–the security forces–to use against its people in the street. Tienanmen hinted how risky and deadly its use can be.
So who is more resilient? Is it the liberal democracy with limited presidential control that allows for dissent, protest, and political opposition? Or is it the autocracy that controls the levers of power but leaves no room for dissent, protest, an political opposition? I would prefer not to find out, but I’ll enjoy that luxury only if Xi or Trump backs down.
My bet is on Trump to flinch first. He is all bully and bluster, not to mention the damage that the tariffs will do to China’s willingness to be helpful with North Korea and to the American economy. Xi has consolidated power and can’t flinch without losing face in a way that would put his hold on power at risk. His lack of resiliency means he has reason to be more inflexible, not less. In the short run, he has the advantage in a game of chicken. He’ll do his best, by targeting the tariffs against those states that voted for Trump, to make sure we never get to the long term. The US stock and labor markets are already signaling distress at the consequences, and the Fed will have to consider raising rates to counter the inflationary impact of the tariffs as well as the recent tax cut and budget deal. Trump will need to have more staying power than he has demonstrated on many issues so far to win this game of chicken.
Share this, I'll really appreciate it:
Syrian chessboard
Entering its eighth year, the civil war in Syria has developed into a serious regional conflict. What started as a popular uprising by the Syrian public against Bashar al-Assad’s authoritarian regime has become a struggle for power between external actors, including both regional heavyweights such as Turkey and major global powers like Russia. Today, the Syrian theater is a battlefield for the mostly opposing interests of these actors. This competition has obstructed any progress towards a peace settlement for Syria. Rather, the conflict of interest is perpetuating the Syrian ‘civil war,’ with dire consequences for the country and its population.
On April 2, the Wilson Center hosted a panel addressing the issue of outside powers and the future of Syria. Moderated by Aaron David Miller, Vice President for New Initiatives and Middle East Program Director at the Wilson Center, the discussion sought to break down the array of interests present in the Syrian conflict and the different roles that Russia, Iran, Turkey, and Israel have assumed. Paul du Quenoy, Associate Professor of History at American University of Beirut, Amy Austin Holmes, Associate Professor of Sociology at American University in Cairo, David Pollock, Kaufman Fellow at the Washington Institute and Director of Project Fikra, and Robin Wright, USIP-Wilson Center Distinguished Fellow, offered their perspectives as long-time analysts of Syria and the Middle East.
Paul du Quenoy argues that Russia’s primary interest is to maintain a presence in the Middle East through preserving the Moscow-friendly Assad regime. Following the Arab Spring in 2011, Russia felt marginalized and humiliated. The political changes in countries such as Libya sidelined Moscow in regional affairs and sparked fears that the wave of public protests and regime instability could even reach Russia. To protect its influence in the Middle East, Moscow thus intervened in the civil war in 2015.
Although Russia has achieved its core goal, the overall track record of its intervention has been meager, highlights du Quenoy. Moscow succeeded in stabilizing the Assad regime. However, it is now bogged down in a costly conflict requiring continuous military activities. Russian hopes for becoming the core facilitator of a lasting peace solution for Syria and a central actor in the profitable business of rebuilding the country have not materialized. Instead, Moscow has had to recognize its limited leverage. Since Russia’s strategic interests are tied to the survival the Assad regime, the despot can exert influence on Moscow’s agenda and even obstruct unfavorable Russian policies.
In contrast to Russia, Iran has been more successful at promoting its interests, says Robin Wright. Tehran’s Middle East policy is driven by a feeling of vulnerability. Against the backdrop of its Shia religious orientation, Iran “feels strategically lonely,” that is, it considers itself surrounded by a hostile Sunni camp. To cope with this adverse environment, Tehran seeks to project power beyond its borders. This undertaking of expanding Iranian influence in the Middle East has been mostly implemented through establishing a strategic corridor linking Tehran in the East with Beirut in the West. Syria is an integral part of this land bridge. Although its intervention in the Syrian conflict has been costly, Tehran considers its efforts to sustain the Assad regime a long-term strategic investment essential to Iranian national security.
According to Austin Holmes, Turkey likewise sees its national security at stake in the Syrian conflict. Ankara’s primary interest is to keep the Syrian Kurds—who maintain close relations with their Turkish brethren—at bay. Faced with an ongoing domestic Kurdish insurgency promoted by the PKK, Turkey wants to avoid the establishment of a Kurdish autonomous zone in northern Syria stretching all along the Syrian-Turkish border. In 2016, Ankara launched its first intervention in Syria dubbed ‘Euphrates Shield’ to prevent a connection of the Kurdish cantons of Afrin and Kobane. In January 2018, Turkey stepped up its military activities to further weaken the Kurds, launching operation ‘Olive Branch’ aimed at occupying Afrin. While Ankara succeed at taking over the Kurdish stronghold, the repercussions have been inimical. Holmes stresses that the Turkish attacks on the Syrian Kurds undermine the fight against ISIS and jeopardize the Kurdish governance project of ‘Rojava,’ which she views as seeking to establish democratic principles in northern Syria.
For Israel, the Syrian civil war has become an existence-threatening challenge, says David Pollock. In essence, the Israeli leadership has been preoccupied with its immediate, narrow interest of keeping the border with Syria secure, and has tried to stay out of the broader Syrian conflict. This approach translated into a threefold strategy: (i) securing the Golan Heights as a buffer zone, (ii) reducing the presence of and threats from hostile actors—including Hezbollah, the IRGC, other Iranian militias, and jihadists—near Israeli territory, and (iii) obstructing the transfer of advanced weapons to any of these actors. To achieve these goals, the Israeli air force has in the past conducted targeted air strikes. Israel has also engaged in intensive talks with Russia and has provided humanitarian assistance to populations in southeastern Syria to build strategic goodwill.
However, Pollock points out that Israel’s interests are eroding. Air strikes have merely achieved tactical successes and were unable to prevent Iran and its proxies from expanding their presence in Syria. Perception of a strategic threat is growing. Moreover, the United States remains disinterested in Syria and is unwilling to counteract Iranian encroachment. Israel therefore sees a need to intensify its involvement in the Syrian conflict to protect itself, and will most likely expand its military interventions in the foreseeable future.
Syria’s future looks bleak. The civil war has evolved into an open-ended confrontation among regional and international actors, which will continue to add fuel to the fire. Destruction and killing of innocent civilians will drag on. Unwilling to force an end to the conflict, the West should at least alleviate the human suffering that millions of Syrians both inside and outside the country endure.
RSS - Posts
