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President Biden has identified semiconductors as ground zero in economic and strategic competition with China and is seeking a Western alliance to secure that industry.
Unlike President Trump, he understands buddying up with President Xi Jinping won’t solve much, looking out for American workers doesn’t require antagonizing our allies, and securing leading-edge technologies — always important to defense preparedness — cannot be accomplished without their cooperation.
WTO rules and dispute settlement are useless. What good is a panel finding that China subsidized or pirated technology to create a product with a dominant global market position and that may be essential in the production of electric vehicles, robots, or missile guidance systems. The resulting penalty would be like an antitrust fine — a cost of doing business that can be passed on to consumers. U.S. armed forces could be placed at a tragic disadvantage to the Chinese military.
The Biden administration’s notion that we can both simultaneously compete commercially with China and cooperate on matters like climate change and pandemic control is a dangerous delusion. Mr. Xi is obsessed with technological dominance, reunification with Taiwan, marginalizing the United States in Southeast Asia, and usurping the liberal world order, but most of all he is paranoid and narcissistic. How else to explain his resistance to cooperating with the World Health Organization on COVID-19, and bearing the cost of extinguishing a wholly non-threatening democratic regime in Hong Kong that acknowledged Beijing’s sovereignty?
Mr. Xi’s government crushes dissent, almost as effectively as American universities, and runs concentration camps to accomplish cultural genocide of Muslims. Beijing shamelessly breaks international obligations whenever it suits its purposes knowing western sanctions, like denying CCP officials travel privileges, have a little bite.
Strategic dialogue with fascists is useless and to pretend otherwise is appeasement.
Mr. Biden is correct to identify semiconductor design, fabrication, and software know-how as critical to Western prosperity and security. Best-in-class methods and dominant market shares for the 300 or so components, processes, tools, and chemicals are broadly distributed across United States, Japan, Taiwan, Korea, Australia, India, and several Western European nations.
No one has a lock on the supply chain.
China cannot break into or steal this chain to achieve its goals of self-sufficiency and dominance without importing products whose designs may be pirated foreign investors that transfer expertise, or fall victim to coercion and overseas acquisitions.
A Western trade alliance that curbed exports to China of critical technologies — including consuming sectors like cellphone assembly and electric vehicles — is critical. As is developing secure Western alternatives for labor-intensive processes, liking dividing semiconductor wafers and equipping those pieces with electrical connectors, where the Chinese global market share has doubled since 2015 to 40% — we don’t need another choke point in the value chain similar to rare earth minerals.
Often allies have different strategic priorities. Germany, with its dependence on Chinese markets, still harbors the fantasy that engaging with China will bring it around to Western values and recently pushed through a China-EU investment agreement.
In Southeast Asia, nations from the Philippines to Vietnam know China will impose harsh trade sanctions if they participate, for example, in the U.S. boycott of Huawei’s 5G technology. Whereas President Duterte distancing the Philippines from the United States had few significant consequences in Washington — that has to change.
President Obama courted our Asian allies by negotiating the Trans-Pacific Partnership, then Mr. Trump jilted them by withdrawing. The pivot of American forces to the Pacific that Mr. Obama promised has not happened, and Washington has not mounted a credible response to China’s militarization of islands in neutral waters of the South Pacific and its Belt and Road initiative.
We can’t simply ask the Europeans not to export critical technologies to China but must make quite clear that U.S. cooperation on broader defense issues will critically depend on how they respond regarding China.
Likewise, Mr. Biden’s ambivalence about the TPP and executive order that the federal government only purchase EVs incorporating 50% U.S. components smacks of the same protectionism as Mr. Trump’s America First. Mr. Biden’s diplomacy and supply chain reviews should aim to secure supplies not steal jobs — moving chip production from China to Vietnam is just as good as to Vermont.
To win Asian cooperation, we need to stiffen and modernize U.S. Pacific forces and when China sinks a Filipino fishing boat or violates the median line in the straights of Taiwan, America should project vertebrae rattling force. America should be committed to sourcing in Asia by throwing out protectionist executive orders and re-entering the TPP.
