Need To Know: May 6

When Rhetoric Matters: America’s Tough Talk on China and Covid-19

This site is based on the premise political rhetoric rarely matters.

Leaders decisions are shaped by interests based on realities and interests created by geography, economics, military capability and demography.

Strong forces pushed the American-Chinese economic relationship together to begin with.

From the American perspective, China is a 1.3 billion person market with a large, educated and cheap workforce. For China, the U.S. is the largest economy in the world by far and the preeminent source of modern techniques and technology.

However, Covid-19 is not a typical political dumpster fire with big flames, but no real damage.

It’s estimated as many as 100,000 Americans may die and trillions of dollars in damage has been done to the U.S. economy. At least 30 million people have lost their jobs. Both losses in Europe may be higher. Fury is rising. There are already calls for Beijing to make reparations — a historically loaded word.

That’s why this time tough talk is likely more than just that. So let’s review the tough talk:

1. President Trump said Thursday he has seen evidence suggesting Covid-19 originated from a laboratory in China.

2. U.S. intelligence officials confirmed that an investigation has been ongoing into whether the pandemic was the result of an accident at the Wuhan lab, rather than from a wet market in the city, as Beijing claims. And their findings indicate the virus came from the lab.

3. Secretary of State Mike Pompeo says Beijing “looks guilty” because it won’t cooperate with international investigations by letting scientists into Wuhan or the lab.

4. Trump also responded to questions about an editorial in influential German newspaper Bild calling for China to pay Germany US$165 billion, and suggested he might also seek damages.

In nanny states, voters expect governments to anticipate and solve every problem. That’s impossible. So when something inevitably goes wrong, politicians must assign blame to someone else.

“Opaque” China is a perfect mark because there are very legitimate questions as to whether it deliberately lied about the contagiousness of Covid-19 and let the virus spread abroad. Whether the outbreak started in that Wuhan lab is also very fair. (Note: For first reporting information on the Wuhan lab global intelligence agencies are now pursuing, Zerohedge was banned from Twitter, blacklisted by Google, and attacked by media outlets like the New York Times and NBC, all of which have deep commercial ties to China).

Over the weekend Politico published details of a 57-page Republican party memo, which advised candidates to aggressively target Beijing in their public remarks on the pandemic. That means painting Democrats as “pro-China” if they don’t agree with retaliatory measures.

Political advisers have also encouraged Trump to take a more forceful swing at China because they think it will help him politically.

Democrat presidential nominee Joe Biden has deep ties to China.

Biden’s son received lucrative contracts for ill-defined work from Chinese state entities. He has long been associated with friendly policies toward China, seeing it mainly as a trade partner. Like many in Washington, he saw its economic growth as a net benefit—we can all get rich together—that outweighed national security concerns or job losses.
Trump is President because the people getting rich off China didn’t care about those job losses.

Just four months ago on the campaign trail Biden said about China, “They’re not bad folks, folks. They’re not competition for us."

After Covid-19, that’s a millstone around his neck.

Biden has two political choices:

1) Make this election about globalism and America’s relationship with China. Fight for what he believes even though it doesn’t play well with voters in swing states like Wisconsin, Michigan and Pennsylvania he needs to win.

2) Take the potency out of Trump’s China positions by embracing a less extreme version of them.

Most politicians will follow the polls and take option 2. That means whomever wins, American policy is going to change. Even if Biden breaks some of his promises, he won’t be able to break them all.

What might Trump’s positions be?

Senior officials across multiple government agencies are expected to meet later this week to explore proposals for punishing or demanding financial compensation from China. Some administration officials have discussed having the United States cancel part of its debt obligations to China. Finding mechanisms to discourage American companies from producing in China will certainly be part of any package.

Trump and aides have also discussed stripping China of its sovereign immunity aiming to enable the U.S. government or victims to sue China for damages.

The goal posts are already moving. This week the Washington Post, which along with Bloomberg insisted three weeks ago China could not be sued because of sovereign immunity, evolved its position to “it would be extremely difficult to accomplish and may require congressional legislation.”

They did not note Senator Cotton and Representative Crenshaw have already introduced a bill in the House and Senate to do just that.

The media never admits it’s wrong. It evolves its position in increments to make it look like it was consistent all along. You can see here how that’s already happening. Change is in the wind, and the media needs to get downwind.

In this case, heated rhetoric will mean policy fire. The only real question is how many flames will be fanned and how deep the burn.