Oct 12, 2018

The U.S. straight-arming of China

Illustration: Sarah Grillo/Axios

For decades, the U.S. and China have circled uneasily as current and future global superpowers. Now, President Trump's continued escalation of actions against Beijing threatens to push the two powers close to direct conflict.

Driving the news: This week, the U.S. took perhaps its most provocative action yet, springing a trap in Belgium that captured Yanjun Xu, a senior Chinese intelligence operative, and arraigning him in Cincinnati for economic espionage. This afternoon, Xu pleaded not guilty.

  • The Xu arrest was the first such U.S. action against Beijing.
  • Were the situation reversed — and a U.S. spy be on trial in China — it would create a major political crisis in the U.S., and possibly put the countries on a war footing.
  • Thought bubble from Axios China author Bill Bishop: Expect a reaction soon from Beijing, quite possibly including the arrest of an American in China as a spy.

The big picture: This was only one of three substantial U.S. escalations against China this week. The Trump administration also tightened scrutiny of Chinese investment in U.S. technology, and issued new restrictions on the sale of civilian nuclear technology to Beijing.

  • Trump and Chinese leader Xi Jinping may meet next month at the G20 meeting in Buenos Aires, the WSJ reports.

But the trio of actions — coming after last month's enactment of tariffs on half of Chinese exports to the U.S., amounting to $250 billion — amounts to a significant intensification of the U.S. offensive against Beijing.

  • The White House asserts that it is only seeking redress after a wholesale Chinese assault on the U.S. and Western economies through the theft and extortion of intellectual property.
  • And some dangle hope that the relationship can return to what it was once trade and IP issues are resolved.
  • But many experts say relations are forever changed — and that the risk of an outbreak of war is growing. "As confrontation increases, the path to conflict is very short because the space to talk has been reduced or even eliminated," Gen. John Allen, president of the Brookings Institution, tells Axios.
"As it turns out trade wars are not easy, as some have proclaimed.  And when you have the two most consequential nations on the planet trading increasingly damaging blows, accompanied with increasingly inflammatory rhetoric, the race to the bottom will be harmful to Americans and Chinese alike."
Gen. John Allen

The bottom line: One worrying thing is that, while Trump has sought to force U.S. allies to join the offensive, it has failed to do the diplomacy to create that kind of united front.

  • If Trump's team is seeking "to out-compete China for global influence, it needs to reengage our allies and friends and gain their support for a common strategy. None of that is happening," says Ivo Daalder, president of the Chicago Council on Global Affairs and co-author of the forthcoming “The Empty Throne: America’s Abdication of Global Leadership.”
  • "This is all doomed to failure, not because China is strong, but because this weakens the U.S. and shifts the world economy away from us," Adam Posen, president of the Peterson Institute for International Economics, tells Axios. 
  • "Those who will suffer will be emerging markets and U.S. consumers, with no military advantage gained."

Go deeper

UFC wants to host fight on tribal land to avoid coronavirus restrictions

Illustration: Aïda Amer/Axios

In an attempt to skirt federal and state guidelines during the coronavirus pandemic, the UFC plans to hold its April 18 pay-per-view event on tribal land in California, per multiple reports.

The state of play: Even as the rest of the sports world hits pause, UFC president Dana White has remained adamant that fights must go on, and appears to have settled for a shutdown casino in a state with the fourth-most confirmed cases of coronavirus.

Ivanka Trump plans focus on coronavirus recovery for small businesses

Ivanka Trump speaks at yesterday's White House videoconference with bank and credit card executives. Photo: Kevin Lamarque/Reuters

Ivanka Trump personally lobbied top bank executives to line up the $1.5 billion in commitments to small business that were announced yesterday at a videoconference among the bank executives and President Trump — stoking competitive juices among the execs to drive up their commitments.

The state of play: Ivanka, who has had workforce development in her portfolio going back to 2017, plans an increasing emphasis on small businesses in the weeks ahead as they navigate the rescue bill’s Payroll Protection Program, sources tell me.

Public transit's death spiral

Illustration: Eniola Odetunde/Axios

Public transit systems across the country are experiencing a painful trifecta: Ridership has collapsed, funding streams are squeezed, and mass transit won't bounce back from the pandemic nearly as fast as other modes of transportation.

Why it matters: Transit agencies could see an annual shortfall of as much as $38 billion due to the coronavirus pandemic, according to TransitCenter. At the same time, they're more important than ever, with more than 36% of essential workers relying on public transportation to get to work.

Go deeperArrow4 hours ago - Health