foreignpolicy--2020-07-24--Pompeo’s Strategy Depends on Beijing’s Own Paranoia

In what was billed as a landmark speech on Thursday , U.S. Secretary of State Mike Pompeo launched a fusillade of attacks on China , which he called “ increasingly authoritarian at home , and more aggressive in its hostility to freedom everywhere else.
” The speech , which Pompeo delivered at the Richard Nixon Presidential Library and Museum in Yorba Linda , California , came after months of intensifying hostile actions between Beijing and Washington , including the abrupt order on Tuesday by the United States to close the Chinese consulate in Houston , China ’ s denunciations of @ @ @ @ @ @ @ by Pompeo explicitly opposing China ’ s claims in the South China Sea .
In his speech , Pompeo articulated a view that is increasingly popular in Washington policymaking circles : that the implicit bargain past administrations struck with Beijing to hold off on ideological criticism and geopolitical containment in exchange for mutually profitable economic growth was a bad deal for the United States .
Pompeo offered few signs of what a more productive approach might look like , however , or how to disentangle the U.S. and Chinese economies without causing a @ @ @ @ @ @ @ ’ s account , Washington ’ s new strategy is to “ engage and empower the Chinese people—a dynamic , freedom-loving people who are completely distinct from the Chinese Communist Party.
” He repeated a call for an alliance of “ free world ” states against China , but it was short on either details or the credibility needed to bring allies on board .
Like other recent actions driven by the most hawkish elements in the Trump administration , Pompeo ’ s speech was instead aimed at deliberately riling the Chinese government @ @ @ @ @ @ @ businesses and constrain America ’ s strategic options .
The idea of appealing to the Chinese people , rather than to the Chinese Communist Party ( CCP ) , is flawed for numerous reasons .
The CCP is deeply woven into the fabric of ordinary Chinese life , and the propaganda message that “ Without the party , there would be no new China ” —which can be strikingly effective—starts in elementary school .
While there is plenty of resentment and anger among the Chinese people over individual issues , from government corruption @ @ @ @ @ @ @ is no evidence that it directly translates into large-scale questioning of the CCP ’ s legitimacy .
Even people who dislike the party in the abstract are likely to side with it against a hostile foreign government .
Even if the Chinese people did yearn to throw off the shackles of communism , the administration Pompeo serves has done nothing to either engage or empower them .
Instead , President Donald Trump has used racist terms such as “ kung flu ” ; made the visa process for Chinese visiting , studying , @ @ @ @ @ @ @ tortuous ; and shuttered grassroots engagement programs , such as the Peace Corps in China , meant to present a friendly American face to ordinary Chinese people .
Assessing Chinese public opinion is a tricky business , but no evidence suggests the kind of radical gulf between ruler and ruled that emerged in Eastern Europe in the 1980s .
Claims that the Chinese masses are ready to reject the CCP come from highly unreliable groups such as Tuidang—which claims to be a “ emerging non-violent movement ” but is run from abroad by @ @ @ @ @ @ @ Chinese religious movement with close ties to the Trump administration .
Tuidang says , fictitiously , that “ 350 million Chinese people have renounced the notorious Chinese Communist Party.
” Pompeo ’ s call for “ free nations to act ” and insist on reciprocity and transparency with China , coupled with his accusation that U.S. allies not willing to stand up to China are cowards , rings hollow coming from an administration that has decimated U.S. diplomacy .
Countries such as Germany—which Pompeo hinted at without naming—may display moral cowardice toward Beijing @ @ @ @ @ @ @ , but they ’ ve also been alienated by Washington ’ s behavior .
The Trump administration ’ s actions have made it all too easy to level charges of equivalence between Washington and Beijing , whether it ’ s putting children in detention camps or lying about coronavirus data .
Pompeo ’ s description of Beijing ’ s actions , “ alienating potential allies , breaking trust at home and abroad , rejecting property rights and predictable rule of law , ” could describe his own government .
Pompeo demanded reciprocity against @ @ @ @ @ @ @ reciprocity entails for allied nations , or what its purpose should be save the inchoate idea of getting tough with China .
Perhaps the real goal of the California speech was not to appeal to allies or even the American people , but to spur action from China itself that would further the agenda of Pompeo and other hard-line China hawks , such as Trump trade advisor Peter Navarro .
Navarro and others have long been advocates of a comprehensive economic decoupling between the two countries , snapping the business ties that they @ @ @ @ @ @ @ of the United States .
Pompeo ’ s speech repeatedly referred to the failings of American investment in China and to Beijing ’ s duplicitous business dealings .
There are plenty of moral and pragmatic arguments for decoupling and against it .
However necessary it might be , it likely would come with enormous economic costs—a price that went unmentioned in the speech , save for a single note of the fact that China , unlike the Soviet Union , is tightly integrated into the global economy .
Left unsaid was that for @ @ @ @ @ @ @ much higher prices on the cheap Chinese manufactured goods that have done so much to boost the U.S. standard of living .
For U.S. businesses , decoupling would mean paying the massive costs of relocating enterprises and forfeiting billion-dollar investments .
A government comprehensively committed to decoupling might be able to allay these problems , by making its case to the American people and by offering support to U.S. businesses .
Yet the president has shown no great enthusiasm for wide decoupling , nor for the kind of ideological warfare Pompeo proposes .
@ @ @ @ @ @ @ driven purely by the same issues for which he attacks Japan , South Korea , or Europe : that the United States isn ’ t getting a fair shake in trade or strategic deals .
Trump badly wants a deal with Chinese President Xi Jinping , while Pompeo wants the United States to stop dealing with China altogether .
Unlike Pompeo , Trump has publicly praised Xi and , according to former National Security Advisor John Bolton , even expressed his approval of China ’ s crackdowns in Xinjiang and Hong Kong .
@ @ @ @ @ @ @ to the strategy can be gauged by the fact that he held a press conference of his own 30 minutes into Pompeo ’ s speech .
The strongest China hawks also face business-minded opposition from their colleagues in the cabinet , especially Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross , who pay lip service to Trump ’ s trade war but have no desire to see stock prices damaged by decoupling .
By upping the temperature of the U.S.-China dispute , however , Pompeo may be aiming to force the Chinese @ @ @ @ @ @ @ risks for U.S. firms in China have already grown sharply .
Anti-American rhetoric has become a mainstay of Chinese diplomacy , and visa bans have disrupted foreign enterprises .
In the past , the Chinese leadership has been happy to keep American businesses in China even as it shook its fists at the U.S. government , but the ideological demands of the CCP have already seen foreign firms forced to accept the power of party cells and exposed them to regular inspections and heavier paperwork .
A full-blown confrontation between Beijing and Washington @ @ @ @ @ @ @ even more dangerously exposed , leading to abrupt expulsions , retaliatory detentions and exit bans , and demands to adhere to nationalist shibboleths that could , as the NBA found , damage their reputations at home .
The recent split between Beijing and London over Hong Kong , for example , has resulted in the sudden pulling of Premier League soccer games from Chinese TV .
Forcing Beijing to retaliate against U.S. businesses serves the administration hawks ’ greater purpose , driving decoupling while making it seem like China ’ s fault—which would @ @ @ @ @ @ @ to avoid offering expensive and politically tricky support to U.S. consumers and businesses .
It would also outflank the pro-business faction within the administration : As Washington escalates , Chinese officials will be increasingly unable to offer business concessions without damaging their political standing at home .
Beijing could avoid this by pouring cold water on rising flames—but given the risks that backing down poses for Xi and the lack of internal debate within today ’ s Chinese Communist Party , such a wise course seems vanishingly unlikely .

In what was billed as a landmark speech on Thursday, U.S. Secretary of State Mike Pompeo launched a fusillade of attacks on China, which he called “increasingly authoritarian at home, and more aggressive in its hostility to freedom everywhere else.” The speech, which Pompeo delivered at the Richard Nixon Presidential Library and Museum in Yorba Linda, California, came after months of intensifying hostile actions between Beijing and Washington, including the abrupt order on Tuesday by the United States to close the Chinese consulate in Houston, China’s denunciations of the United States, and a statement by Pompeo explicitly opposing China’s claims in the South China Sea.
In what was billed as a landmark speech on Thursday, U.S. Secretary of State Mike Pompeo launched a fusillade of attacks on China, which he called “increasingly authoritarian at home, and more aggressive in its hostility to freedom everywhere else.” The speech, which Pompeo delivered at the Richard Nixon Presidential Library and Museum in Yorba Linda, California, came after months of intensifying hostile actions between Beijing and Washington, including the abrupt order on Tuesday by the United States to close the Chinese consulate in Houston, China’s denunciations of the United States, and a statement by Pompeo explicitly opposing China’s claims in the South China Sea.
In his speech, Pompeo articulated a view that is increasingly popular in Washington policymaking circles: that the implicit bargain past administrations struck with Beijing to hold off on ideological criticism and geopolitical containment in exchange for mutually profitable economic growth was a bad deal for the United States. Pompeo offered few signs of what a more productive approach might look like, however, or how to disentangle the U.S. and Chinese economies without causing a disaster for both. According to Pompeo’s account, Washington’s new strategy is to “engage and empower the Chinese people—a dynamic, freedom-loving people who are completely distinct from the Chinese Communist Party.” He repeated a call for an alliance of “free world” states against China, but it was short on either details or the credibility needed to bring allies on board.
Like other recent actions driven by the most hawkish elements in the Trump administration, Pompeo’s speech was instead aimed at deliberately riling the Chinese government in order to put pressure on U.S. businesses and constrain America’s strategic options.
The idea of appealing to the Chinese people, rather than to the Chinese Communist Party (CCP), is flawed for numerous reasons. The CCP is deeply woven into the fabric of ordinary Chinese life, and the propaganda message that “Without the party, there would be no new China”—which can be strikingly effective—starts in elementary school. While there is plenty of resentment and anger among the Chinese people over individual issues, from government corruption to attacks on COVID-19 whistleblowers, there is no evidence that it directly translates into large-scale questioning of the CCP’s legitimacy. Even people who dislike the party in the abstract are likely to side with it against a hostile foreign government.
Even if the Chinese people did yearn to throw off the shackles of communism, the administration Pompeo serves has done nothing to either engage or empower them. Instead, President Donald Trump has used racist terms such as “kung flu”; made the visa process for Chinese visiting, studying, or immigrating to the United States more tortuous; and shuttered grassroots engagement programs, such as the Peace Corps in China, meant to present a friendly American face to ordinary Chinese people. Assessing Chinese public opinion is a tricky business, but no evidence suggests the kind of radical gulf between ruler and ruled that emerged in Eastern Europe in the 1980s. Claims that the Chinese masses are ready to reject the CCP come from highly unreliable groups such as Tuidang—which claims to be a “emerging non-violent movement” but is run from abroad by Falun Gong, a banned but well-funded Chinese religious movement with close ties to the Trump administration. Tuidang says, fictitiously, that “350 million Chinese people have renounced the notorious Chinese Communist Party.”
Pompeo’s call for “free nations to act” and insist on reciprocity and transparency with China, coupled with his accusation that U.S. allies not willing to stand up to China are cowards, rings hollow coming from an administration that has decimated U.S. diplomacy. Countries such as Germany—which Pompeo hinted at without naming—may display moral cowardice toward Beijing in the service of their trade interests, but they’ve also been alienated by Washington’s behavior. The Trump administration’s actions have made it all too easy to level charges of equivalence between Washington and Beijing, whether it’s putting children in detention camps or lying about coronavirus data. Pompeo’s description of Beijing’s actions, “alienating potential allies, breaking trust at home and abroad, rejecting property rights and predictable rule of law,” could describe his own government.
Pompeo demanded reciprocity against Beijing, without laying out what such reciprocity entails for allied nations, or what its purpose should be save the inchoate idea of getting tough with China. Perhaps the real goal of the California speech was not to appeal to allies or even the American people, but to spur action from China itself that would further the agenda of Pompeo and other hard-line China hawks, such as Trump trade advisor Peter Navarro. Navarro and others have long been advocates of a comprehensive economic decoupling between the two countries, snapping the business ties that they see empowering the CCP at the cost of the United States. Pompeo’s speech repeatedly referred to the failings of American investment in China and to Beijing’s duplicitous business dealings.
There are plenty of moral and pragmatic arguments for decoupling and against it. However necessary it might be, it likely would come with enormous economic costs—a price that went unmentioned in the speech, save for a single note of the fact that China, unlike the Soviet Union, is tightly integrated into the global economy. Left unsaid was that for ordinary American consumers, decoupling would mean much higher prices on the cheap Chinese manufactured goods that have done so much to boost the U.S. standard of living. For U.S. businesses, decoupling would mean paying the massive costs of relocating enterprises and forfeiting billion-dollar investments.
A government comprehensively committed to decoupling might be able to allay these problems, by making its case to the American people and by offering support to U.S. businesses. Yet the president has shown no great enthusiasm for wide decoupling, nor for the kind of ideological warfare Pompeo proposes. His own antagonism toward China has been driven purely by the same issues for which he attacks Japan, South Korea, or Europe: that the United States isn’t getting a fair shake in trade or strategic deals.
Trump badly wants a deal with Chinese President Xi Jinping, while Pompeo wants the United States to stop dealing with China altogether. Unlike Pompeo, Trump has publicly praised Xi and, according to former National Security Advisor John Bolton, even expressed his approval of China’s crackdowns in Xinjiang and Hong Kong. This time, Trump’s commitment to the strategy can be gauged by the fact that he held a press conference of his own 30 minutes into Pompeo’s speech.
The strongest China hawks also face business-minded opposition from their colleagues in the cabinet, especially Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross, who pay lip service to Trump’s trade war but have no desire to see stock prices damaged by decoupling.
By upping the temperature of the U.S.-China dispute, however, Pompeo may be aiming to force the Chinese to initiate the decoupling. The political risks for U.S. firms in China have already grown sharply. Anti-American rhetoric has become a mainstay of Chinese diplomacy, and visa bans have disrupted foreign enterprises. In the past, the Chinese leadership has been happy to keep American businesses in China even as it shook its fists at the U.S. government, but the ideological demands of the CCP have already seen foreign firms forced to accept the power of party cells and exposed them to regular inspections and heavier paperwork.
A full-blown confrontation between Beijing and Washington, however, will leave U.S. businesses even more dangerously exposed, leading to abrupt expulsions, retaliatory detentions and exit bans, and demands to adhere to nationalist shibboleths that could, as the NBA found, damage their reputations at home. The recent split between Beijing and London over Hong Kong, for example, has resulted in the sudden pulling of Premier League soccer games from Chinese TV.
Forcing Beijing to retaliate against U.S. businesses serves the administration hawks’ greater purpose, driving decoupling while making it seem like China’s fault—which would allow the dysfunctional and divided Trump administration to avoid offering expensive and politically tricky support to U.S. consumers and businesses. It would also outflank the pro-business faction within the administration: As Washington escalates, Chinese officials will be increasingly unable to offer business concessions without damaging their political standing at home. Beijing could avoid this by pouring cold water on rising flames—but given the risks that backing down poses for Xi and the lack of internal debate within today’s Chinese Communist Party, such a wise course seems vanishingly unlikely.


foreignpolicy--2020-07-24--Trump Can’t Ban TikTok, but He Can Hurt It

Trump Can ’ t Ban TikTok , but He Can Hurt It The wild popularity of TikTok , the app best known for videos of lip-syncing teens , is re-igniting the debate among U.S. officials over how the United States should define and defend its national security interests against Chinese companies .
One frequent argument is that the United States should “ ban ” TikTok .
Under U.S. law , that ’ s not a real option—but there ’ s a huge toolbox the government can deploy against the app instead .
TikTok is owned by ByteDance , a Beijing-based @ @ @ @ @ @ @ privacy .
The U.S. has accused the Chinese government of stealing personal data many times in the past , including targeting the U.S. Office of Personnel Management , Equifax , Marriott , Anthem health insurance , and others .
As TikTok collects user data from tens of millions of Americans , Chinese authorities who possess sweeping national security powers can simply compel ByteDance to hand over foreign users ’ data .
The United States is not alone—India banned TikTok last month ( along with dozens of other Chinese apps ) , citing similar @ @ @ @ @ @ @ bloody skirmish with China on the border .
Another concern is potential censorship and disinformation .
TikTok has reportedly moderated away content that displeases Beijing , such as references to the Hong Kong protests , Tiananmen Square , Tibetan independence , and Falun Gong , although the company denies any interference .
Sen. Marco Rubio has warned that China seeks to “ extend its authoritarian censorship of information outside China ’ s borders ” by controlling content on TikTok .
Peter Navarro , U.S. President Donald Trump ’ s chief trade advisor , @ @ @ @ @ @ @ against TikTok .
U.S. law likely does not allow Trump administration officials to easily impose a flat “ ban ” on a free social media app already in use by millions of Americans .
But our experience suggests that U.S. export controls , sanctions laws , and other national security provisions are available to restrain TikTok and isolate ByteDance .
Thanks to the perception of a growing China threat , laws have been developed and expanded in recent years precisely to address a situation like this one .
But the exact tool the @ @ @ @ @ @ @ ongoing tussle between the world ’ s two superpowers has important implications for both U.S. and Chinese companies caught in between .
The United States could attack TikTok ’ s corporate relationship with ByteDance using the powerful Committee on Foreign Investment in the United States ( CFIUS ) .
CFIUS scrutinizes , and sometimes blocks , foreign investments in U.S. companies on national security grounds .
In recent years , CFIUS has been highly focused on investments from China : Chinese investments made up more than 25 percent of CFIUS-reviewed transactions from 2015 @ @ @ @ @ @ @ country .
Thanks to the Foreign Investment Risk Review Modernization Act of 2018 , CFIUS now has an extended reach and a sharper bite .
It is no secret that the recent CFIUS changes were squarely directed at Chinese investment in the U.S. private sector .
One of the reforms in the 2018 law focuses on transactions that result in foreign control over a U.S. business such as TikTok that “ maintains or collects sensitive personal data of United States citizens that may be exploited in a manner that threatens national security.
” @ @ @ @ @ @ @ acquisition of TikTok is already in motion .
ByteDance acquired social media app Musical.ly for $ 1 billion in November 2017 , and consolidated user accounts with TikTok a year later .
In November 2019 , CFIUS initiated a review centered on TikTok ’ s data privacy and transfer policies , affecting an estimated 26.5 million U.S. active users .
TikTok reports that it stores U.S. user data in the United States and backs it up on Singaporean servers , and that the data is inaccessible to the Chinese government .
TikTok also @ @ @ @ @ @ @ in the wake of the new China-imposed national security law .
But these moves seem less than watertight , given that ByteDance employees in China , who obviously are subject to Chinese law , can access TikTok data no matter where it is stored .
Indeed , TikTok ’ s privacy policy and terms of service warn that user data can be shared with ByteDance or any other affiliate .
CFIUS can not outright “ ban ” TikTok , but the committee can force changes to mitigate data privacy concerns , including restructuring @ @ @ @ @ @ @ TikTok ’ s U.S. data outside ByteDance ’ s reach .
Another approach is to demand revisions to TikTok ’ s data-collection and dissemination policies .
CFIUS could appoint an independent monitor to review and report on the company ’ s compliance with either of these protective measures .
Even more aggressively , the committee may decide that no middle ground adequately secures U.S. personal data when a Chinese company sits atop the corporate structure , and require ByteDance to divest from TikTok ’ s U.S. business .
CFIUS orders to undo past @ @ @ @ @ @ @ remedy is no longer off the table , especially when China is involved .
Twice last year CFIUS referenced data privacy concerns in forcing Chinese investors to divest from Grindr , the LGBTQ dating app , and from PatientsLikeMe , a health care technology startup .
Recent reports suggest that the Trump administration may place TikTok on the Entity List , a regulatory tool administered by the Commerce Department to protect U.S. national security and foreign-policy interests by restricting U.S. exports to a listed entity .
The Trump administration has used the Entity @ @ @ @ @ @ @ on from its predecessors .
In March 2016 , the Commerce Department listed Chinese telecommunications giant ZTE for violating U.S. economic sanctions against Iran and North Korea , crippling the business and forcing it to come to terms with pending enforcement actions by the departments of Commerce , Treasury , and Justice .
Chinese state-owned chipmaker Fujian Jinhua was listed in October 2018 for alleged trade-secret theft , severing its access to U.S.-made equipment essential to its production line .
Listed entities often suffer further when suppliers and other business partners are driven @ @ @ @ @ @ @ dealings with a listed entity might attract unwanted scrutiny from the United States .
The power of the Entity List lies in its flexibility , which may appear to some overseas observers as bordering on arbitrary .
Commerce Department officials can redefine “ national security … interests ” with broad discretion and limited judicial oversight .
Prior to 2018 , the Entity List had almost always been used to target violations of U.S. export control or economic sanctions laws , but in recent years , the scope of “ national security ” has @ @ @ @ @ @ @ , the Commerce Department listed artificial intelligence giant Hikvision and seven other companies “ implicated ” in human rights abuses in China ’ s Xinjiang province , an unprecedented application of the Entity List .
It would not be a stretch for the United States to pronounce that ByteDance ’ s access to the personal data of U.S. citizens threatens U.S. national security interests .
But the Entity List is an imperfect instrument .
A U.S. company can not be listed , so this approach would target TikTok ’ s foreign parent company @ @ @ @ @ @ @ clear , however , how listing ByteDance would affect TikTok .
The Entity List has been highly effective in changing the behavior of foreign entities heavily dependent on U.S.-origin exports , such as ZTE and Fujian Jinhua , but a software company like ByteDance likely does not depend on U.S. technological products to the same degree .
Instead , adding ByteDance to the Entity List may achieve results by restricting it from receiving crucial software updates through the iOS or Android app stores .
Importantly , an Entity List designation would not formally @ @ @ @ @ @ @ States , although the designation may have the practical effect of stopping such exports , as companies often overcomply with U.S. sanctions .
And overcompliance might lead companies such as Apple and Google to cut off even nonexport transactions with ByteDance ( and TikTok ) out of an abundance of caution .
Where ByteDance does depend on U.S. products , it can take ( and likely has already taken ) steps to limit its exposure to U.S. supply chains , as other Chinese companies have done .
Hikvision , for example , reportedly @ @ @ @ @ @ @ before it was designated , diverting its supply chain away from the United States and towards more secure sources .
Another arrow in the U.S. government ’ s quiver is to force a deplatforming of TikTok from iOS and Android app stores pursuant to the International Emergency Economic Powers Act , the statute that undergirds almost all U.S. sanctions programs .
In May 2019 , Trump signed Executive Order 13873 , which declared that “ unrestricted acquisition or use in the United States ” of communications technology that is “ owned by , @ @ @ @ @ @ @ jurisdiction or direction of foreign adversaries ” constitutes a threat to U.S national security .
That order authorizes the Commerce Department to block any “ acquisition , importation , transfer , installation , dealing in , or use ” of information and communications technology and services based on an “ unacceptable risk ” to U.S. national security , including based on a risk of sabotage or other “ catastrophic effects ” to U.S. communication infrastructure .
It remains to be seen how the Commerce Department will use this new authority , but implementing @ @ @ @ @ @ @ a case-by-case determination of whether a transaction should be prohibited or mitigated .
These regulations could be used to deplatform TikTok , forcing its removal from the most popular app stores .
While this measure would not remove the app from devices that already have it downloaded , it would effectively prohibit the app from being maintained , making its continued use practically impossible .
The Commerce Department regulations implementing that executive order are still pending , making any action against TikTok under Executive Order 13873 difficult on short notice .
Any prohibition @ @ @ @ @ @ @ on both procedural and substantive grounds , drawing out any resolution for years and forcing the U.S. government to support its assertions publicly before a federal judge .
Finally , the Trump administration could target TikTok through law enforcement actions .
In 2019 , the Federal Trade Commission ( FTC ) issued a $ 5.7 million penalty against TikTok for illegally collecting children ’ s data under the Children ’ s Online Privacy Protection Act and entered into a multiyear consent decree with the company .
Both the FTC and the Department of @ @ @ @ @ @ @ compliance with that agreement .
Civil cases brought by private citizens are pending against TikTok in U.S. courts based on alleged violations of user privacy .
Such efforts would be of relatively limited scope , but might nevertheless deter ByteDance from future investment .
But as military strategists like to point out , the enemy gets a vote .
TikTok and ByteDance have options to respond to any measures taken against them , some of which they have already implemented .
ByteDance has changed some business practices , including cutting off its own @ @ @ @ @ @ @ data .
TikTok has attempted to allay concerns about its relationship with Beijing by hiring an American CEO , beefing up its U.S. regulatory team , withdrawing from Hong Kong based on the concerns over China ’ s new national security law , and issuing a “ transparency report ” stating that it was not asked for data by the Chinese government in 2019 .
Additional steps , such as a vigorous public relations campaign , could rally the millions of U.S. TikTok users , who generally skew young and anti-Trump already , @ @ @ @ @ @ @ an overzealous U.S. government .
TikTok and ByteDance also have legal options .
Because the attempted “ ban ” by the United States is likely to rely on novel theories and will be imposed in haste , the companies are likely to have an opening to challenge the U.S. government action in court as lacking factual and legal support .
A legal challenge might also put pressure on the U.S. government by forcing it to risk disclosure of sensitive intelligence on the Chinese companies if it chooses to fully defend court actions .
@ @ @ @ @ @ @ date that TikTok provides any data to the Chinese government and the Trump administration ’ s less-than-stellar record against procedural challenges to its executive orders , it is possible that a well-structured challenge might be able to overturn , or at least delay , any “ ban.
” Ultimately , TikTok presents yet another iteration of what is becoming a constant problem for the U.S. government : how to protect U.S. national security while maintaining the United States ’ long-standing commitment to global free markets .
How the United States attempts to thread @ @ @ @ @ @ @ important precedent in the digital economy for Chinese-owned companies doing business in the United States .

Beau Barnes, S. Nathan Park and Wade Weems

The wild popularity of TikTok, the app best known for videos of lip-syncing teens, is re-igniting the debate among U.S. officials over how the United States should define and defend its national security interests against Chinese companies. One frequent argument is that the United States should “ban” TikTok. Under U.S. law, that’s not a real option—but there’s a huge toolbox the government can deploy against the app instead.
The wild popularity of TikTok, the app best known for videos of lip-syncing teens, is re-igniting the debate among U.S. officials over how the United States should define and defend its national security interests against Chinese companies. One frequent argument is that the United States should “ban” TikTok. Under U.S. law, that’s not a real option—but there’s a huge toolbox the government can deploy against the app instead.
TikTok is owned by ByteDance, a Beijing-based software company, creating worries about data privacy. The U.S. has accused the Chinese government of stealing personal data many times in the past, including targeting the U.S. Office of Personnel Management, Equifax, Marriott, Anthem health insurance, and others. As TikTok collects user data from tens of millions of Americans, Chinese authorities who possess sweeping national security powers can simply compel ByteDance to hand over foreign users’ data. The United States is not alone—India banned TikTok last month (along with dozens of other Chinese apps), citing similar issues, in the aftermath of a bloody skirmish with China on the border.
Another concern is potential censorship and disinformation. TikTok has reportedly moderated away content that displeases Beijing, such as references to the Hong Kong protests, Tiananmen Square, Tibetan independence, and Falun Gong, although the company denies any interference. Sen. Marco Rubio has warned that China seeks to “extend its authoritarian censorship of information outside China’s borders” by controlling content on TikTok. Peter Navarro, U.S. President Donald Trump’s chief trade advisor, said he expects “strong action” against TikTok.
U.S. law likely does not allow Trump administration officials to easily impose a flat “ban” on a free social media app already in use by millions of Americans. But our experience suggests that U.S. export controls, sanctions laws, and other national security provisions are available to restrain TikTok and isolate ByteDance. Thanks to the perception of a growing China threat, laws have been developed and expanded in recent years precisely to address a situation like this one. But the exact tool the United States chooses to use in the ongoing tussle between the world’s two superpowers has important implications for both U.S. and Chinese companies caught in between.
CFIUS Review
The United States could attack TikTok’s corporate relationship with ByteDance using the powerful Committee on Foreign Investment in the United States (CFIUS). CFIUS scrutinizes, and sometimes blocks, foreign investments in U.S. companies on national security grounds. In recent years, CFIUS has been highly focused on investments from China: Chinese investments made up more than 25 percent of CFIUS-reviewed transactions from 2015 to 2017, the most of any country. Thanks to the Foreign Investment Risk Review Modernization Act of 2018, CFIUS now has an extended reach and a sharper bite. It is no secret that the recent CFIUS changes were squarely directed at Chinese investment in the U.S. private sector. One of the reforms in the 2018 law focuses on transactions that result in foreign control over a U.S. business such as TikTok that “maintains or collects sensitive personal data of United States citizens that may be exploited in a manner that threatens national security.”
The CFIUS review of ByteDance’s acquisition of TikTok is already in motion. ByteDance acquired social media app Musical.ly for $1 billion in November 2017, and consolidated user accounts with TikTok a year later. In November 2019, CFIUS initiated a review centered on TikTok’s data privacy and transfer policies, affecting an estimated 26.5 million U.S. active users. TikTok reports that it stores U.S. user data in the United States and backs it up on Singaporean servers, and that the data is inaccessible to the Chinese government. TikTok also withdrew operations from Hong Kong this month in the wake of the new China-imposed national security law. But these moves seem less than watertight, given that ByteDance employees in China, who obviously are subject to Chinese law, can access TikTok data no matter where it is stored. Indeed, TikTok’s privacy policy and terms of service warn that user data can be shared with ByteDance or any other affiliate.
CFIUS cannot outright “ban” TikTok, but the committee can force changes to mitigate data privacy concerns, including restructuring the corporate relationship in order to place TikTok’s U.S. data outside ByteDance’s reach. Another approach is to demand revisions to TikTok’s data-collection and dissemination policies. CFIUS could appoint an independent monitor to review and report on the company’s compliance with either of these protective measures.
Even more aggressively, the committee may decide that no middle ground adequately secures U.S. personal data when a Chinese company sits atop the corporate structure, and require ByteDance to divest from TikTok’s U.S. business. CFIUS orders to undo past transactions were once rare, but that remedy is no longer off the table, especially when China is involved. Twice last year CFIUS referenced data privacy concerns in forcing Chinese investors to divest from Grindr, the LGBTQ dating app, and from PatientsLikeMe, a health care technology startup.
Entity List
Recent reports suggest that the Trump administration may place TikTok on the Entity List, a regulatory tool administered by the Commerce Department to protect U.S. national security and foreign-policy interests by restricting U.S. exports to a listed entity.
The Trump administration has used the Entity List enthusiastically against Chinese companies, following on from its predecessors. In March 2016, the Commerce Department listed Chinese telecommunications giant ZTE for violating U.S. economic sanctions against Iran and North Korea, crippling the business and forcing it to come to terms with pending enforcement actions by the departments of Commerce, Treasury, and Justice. Chinese state-owned chipmaker Fujian Jinhua was listed in October 2018 for alleged trade-secret theft, severing its access to U.S.-made equipment essential to its production line. Listed entities often suffer further when suppliers and other business partners are driven away completely, fearful that even permissible dealings with a listed entity might attract unwanted scrutiny from the United States.
The power of the Entity List lies in its flexibility, which may appear to some overseas observers as bordering on arbitrary. Commerce Department officials can redefine “national security … interests” with broad discretion and limited judicial oversight. Prior to 2018, the Entity List had almost always been used to target violations of U.S. export control or economic sanctions laws, but in recent years, the scope of “national security” has expanded. Last year, for example, the Commerce Department listed artificial intelligence giant Hikvision and seven other companies “implicated” in human rights abuses in China’s Xinjiang province, an unprecedented application of the Entity List. It would not be a stretch for the United States to pronounce that ByteDance’s access to the personal data of U.S. citizens threatens U.S. national security interests.
But the Entity List is an imperfect instrument. A U.S. company cannot be listed, so this approach would target TikTok’s foreign parent company, ByteDance. It’s not clear, however, how listing ByteDance would affect TikTok. The Entity List has been highly effective in changing the behavior of foreign entities heavily dependent on U.S.-origin exports, such as ZTE and Fujian Jinhua, but a software company like ByteDance likely does not depend on U.S. technological products to the same degree.
Instead, adding ByteDance to the Entity List may achieve results by restricting it from receiving crucial software updates through the iOS or Android app stores. Importantly, an Entity List designation would not formally prevent any ByteDance exports to the United States, although the designation may have the practical effect of stopping such exports, as companies often overcomply with U.S. sanctions. And overcompliance might lead companies such as Apple and Google to cut off even nonexport transactions with ByteDance (and TikTok) out of an abundance of caution. Where ByteDance does depend on U.S. products, it can take (and likely has already taken) steps to limit its exposure to U.S. supply chains, as other Chinese companies have done. Hikvision, for example, reportedly began a “de-Americanization” campaign months before it was designated, diverting its supply chain away from the United States and towards more secure sources.
Deplatforming TikTok
Another arrow in the U.S. government’s quiver is to force a deplatforming of TikTok from iOS and Android app stores pursuant to the International Emergency Economic Powers Act, the statute that undergirds almost all U.S. sanctions programs. In May 2019, Trump signed Executive Order 13873, which declared that “unrestricted acquisition or use in the United States” of communications technology that is “owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries” constitutes a threat to U.S national security. That order authorizes the Commerce Department to block any “acquisition, importation, transfer, installation, dealing in, or use” of information and communications technology and services based on an “unacceptable risk” to U.S. national security, including based on a risk of sabotage or other “catastrophic effects” to U.S. communication infrastructure.
It remains to be seen how the Commerce Department will use this new authority, but implementing regulations proposed late last year would authorize a case-by-case determination of whether a transaction should be prohibited or mitigated. These regulations could be used to deplatform TikTok, forcing its removal from the most popular app stores. While this measure would not remove the app from devices that already have it downloaded, it would effectively prohibit the app from being maintained, making its continued use practically impossible.
The Commerce Department regulations implementing that executive order are still pending, making any action against TikTok under Executive Order 13873 difficult on short notice. Any prohibition would almost certainly be challenged in court on both procedural and substantive grounds, drawing out any resolution for years and forcing the U.S. government to support its assertions publicly before a federal judge.
Law Enforcement
Finally, the Trump administration could target TikTok through law enforcement actions. In 2019, the Federal Trade Commission (FTC) issued a $5.7 million penalty against TikTok for illegally collecting children’s data under the Children’s Online Privacy Protection Act and entered into a multiyear consent decree with the company. Both the FTC and the Department of Justice are reportedly investigating TikTok’s compliance with that agreement. Civil cases brought by private citizens are pending against TikTok in U.S. courts based on alleged violations of user privacy. Such efforts would be of relatively limited scope, but might nevertheless deter ByteDance from future investment.
But as military strategists like to point out, the enemy gets a vote. TikTok and ByteDance have options to respond to any measures taken against them, some of which they have already implemented. ByteDance has changed some business practices, including cutting off its own engineers’ access to TikTok’s data. TikTok has attempted to allay concerns about its relationship with Beijing by hiring an American CEO, beefing up its U.S. regulatory team, withdrawing from Hong Kong based on the concerns over China’s new national security law, and issuing a “transparency report” stating that it was not asked for data by the Chinese government in 2019. Additional steps, such as a vigorous public relations campaign, could rally the millions of U.S. TikTok users, who generally skew young and anti-Trump already, portraying the company as a victim of an overzealous U.S. government.
TikTok and ByteDance also have legal options. Because the attempted “ban” by the United States is likely to rely on novel theories and will be imposed in haste, the companies are likely to have an opening to challenge the U.S. government action in court as lacking factual and legal support. A legal challenge might also put pressure on the U.S. government by forcing it to risk disclosure of sensitive intelligence on the Chinese companies if it chooses to fully defend court actions. Given the dearth of public evidence to date that TikTok provides any data to the Chinese government and the Trump administration’s less-than-stellar record against procedural challenges to its executive orders, it is possible that a well-structured challenge might be able to overturn, or at least delay, any “ban.”
Ultimately, TikTok presents yet another iteration of what is becoming a constant problem for the U.S. government: how to protect U.S. national security while maintaining the United States’ long-standing commitment to global free markets. How the United States attempts to thread that needle—and how TikTok responds—will set an important precedent in the digital economy for Chinese-owned companies doing business in the United States.


foreignpolicy--2020-07-24--Document of the Week: Pompeo Buries U.S.-China Engagement Policy

The U.S. policy of engagement with China began 50 years ago .
Today , the Trump administration is driving the nail into its coffin .
In a series of scorching anti-China speeches by top U.S. cabinet members and via the closure of the Chinese Consulate in Houston amid espionage charges , Washington made it clear that relations are long overdue for a wholesale makeover .
In an important speech on Thursday at the Richard Nixon Presidential Library and Museum in California , U.S. Secretary of State Mike Pompeo suggested that engagement with China , the work of then-President Richard Nixon @ @ @ @ @ @ @ may have been well intentioned , but naive .
“ President Reagan said that he dealt with the Soviet Union on the basis of ‘ trust but verify , ’ ” Pompeo said .
“ When it comes to the [ Chinese Communist Party ] , I say we must distrust and verify.
’ ” As part of our Document of the Week series , Foreign Policy is posting a transcript of the historic February 1972 meeting Nixon and Kissinger held with China ’ s Chairman Mao Zedong and Premier Zhou Enlai .
@ @ @ @ @ @ @ opened the door to decades of direct diplomatic , political , and economic relations with the West , which Pompeo said “ has not brought the kind of change inside of China that President Nixon had hoped to induce.
” Nixon himself saw the need for trust in the relationship , but he felt that it was vital to prove to his Chinese counterparts , Mao and Zhou , that he could be a trustworthy counterpart .
Nixon was keen to draw China out of the Soviet orbit , telling Mao that the @ @ @ @ @ @ @ the border with China than it did on the border with Europe .
“ Since you do not know me , you shouldn ’ t trust me , ” Nixon said in a declassified transcript of his first historic meeting with China ’ s leaders in Beijing .
“ You will find I never say something I can not do .
And I always will do more than I can say.
” The icebreaking meeting , which took place in Mao ’ s residence , included exchanges of mutual flattery—Mao assured Nixon his @ @ @ @ @ @ @ book , ” while Nixon said Mao ’ s writings had “ changed the world.
” Mao told Nixon that he had favored his victory in the 1968 election against Hubert Humphrey .
“ I like rightists , ” the communist leader said .
“ People say you are rightists , that the Republican Party is to the right.
” Nixon responded that the party ’ s tough anti-communist credentials in the United States placed it in a better position to take bold foreign-policy steps : “ Those on the right can do @ @ @ @ @ @ @ ” Kissinger accused American leftists of being pro-Soviets who would strive to prevent a Chinese detente .
Mao mostly tried to steer Nixon and Kissinger away from U.S. politics and American geopolitical challenges in the Pacific , pressing instead on the question of whether China faced a greater military threat from the United States than the Soviet Union .
“ I think you know the United States has no territorial designs on China .
We know China doesn ’ t want to dominate the United States , ” Nixon said .
“ Therefore @ @ @ @ @ @ @ despite our differences , to build a world structure in which both can be safe to develop in our own way on our own roads.
” Mao , who claimed he was feeling ill , said he ’ d prefer to leave it to his premier to hammer out the details of U.S. and Chinese relations .
But before he said goodbye , Nixon affirmed that all parties present would be discreet about the content of their discussions : “ The Chairman can be sure that whatever we discuss , or whatever I @ @ @ @ @ @ @ goes beyond the room .
”

The U.S. policy of engagement with China began 50 years ago. Today, the Trump administration is driving the nail into its coffin.
The U.S. policy of engagement with China began 50 years ago. Today, the Trump administration is driving the nail into its coffin.
In a series of scorching anti-China speeches by top U.S. cabinet members and via the closure of the Chinese Consulate in Houston amid espionage charges, Washington made it clear that relations are long overdue for a wholesale makeover. In an important speech on Thursday at the Richard Nixon Presidential Library and Museum in California, U.S. Secretary of State Mike Pompeo suggested that engagement with China, the work of then-President Richard Nixon and National Security Advisor Henry Kissinger, may have been well intentioned, but naive.
“President Reagan said that he dealt with the Soviet Union on the basis of ‘trust but verify,’” Pompeo said. “When it comes to the [Chinese Communist Party], I say we must distrust and verify.’”
As part of our Document of the Week series, Foreign Policy is posting a transcript of the historic February 1972 meeting Nixon and Kissinger held with China’s Chairman Mao Zedong and Premier Zhou Enlai. That meeting in Mao’s residence opened the door to decades of direct diplomatic, political, and economic relations with the West, which Pompeo said “has not brought the kind of change inside of China that President Nixon had hoped to induce.”
Nixon himself saw the need for trust in the relationship, but he felt that it was vital to prove to his Chinese counterparts, Mao and Zhou, that he could be a trustworthy counterpart. Nixon was keen to draw China out of the Soviet orbit, telling Mao that the Soviet Union had more forces deployed along the border with China than it did on the border with Europe. “Since you do not know me, you shouldn’t trust me,” Nixon said in a declassified transcript of his first historic meeting with China’s leaders in Beijing. “You will find I never say something I cannot do. And I always will do more than I can say.”
The icebreaking meeting, which took place in Mao’s residence, included exchanges of mutual flattery—Mao assured Nixon his Six Crises was “not a bad book,” while Nixon said Mao’s writings had “changed the world.” Mao told Nixon that he had favored his victory in the 1968 election against Hubert Humphrey. “I like rightists,” the communist leader said. “People say you are rightists, that the Republican Party is to the right.”
Nixon responded that the party’s tough anti-communist credentials in the United States placed it in a better position to take bold foreign-policy steps: “Those on the right can do what those on the left talk about.” Kissinger accused American leftists of being pro-Soviets who would strive to prevent a Chinese detente.
Mao mostly tried to steer Nixon and Kissinger away from U.S. politics and American geopolitical challenges in the Pacific, pressing instead on the question of whether China faced a greater military threat from the United States than the Soviet Union.
“I think you know the United States has no territorial designs on China. We know China doesn’t want to dominate the United States,” Nixon said. “Therefore, we can find common ground, despite our differences, to build a world structure in which both can be safe to develop in our own way on our own roads.”
Mao, who claimed he was feeling ill, said he’d prefer to leave it to his premier to hammer out the details of U.S. and Chinese relations. But before he said goodbye, Nixon affirmed that all parties present would be discreet about the content of their discussions: “The Chairman can be sure that whatever we discuss, or whatever I and the Prime Minister discuss, nothing goes beyond the room.”


How to Deglobalize

Following the global COVID-19 pandemic , a wave of politicians have railed against the supposed vulnerabilities of global supply chains and promised to bring production of critical goods back home .
In the United States , the Trump administration is reportedly “ turbocharging ” its plans to disconnect supply chains from China and debating a new $ 25 billion “ reshoring fund ” to encourage U.S. firms to bring manufacturing back to the states .
Not to be outdone , presidential candidate Joe Biden ’ s campaign has outlined how his administration would tackle supply chain vulnerabilities .
He ’ @ @ @ @ @ @ @ taxes , and immigration as key planks for managing globalization .
Meanwhile , European Union Trade Commissioner Phil Hogan has argued that Europe needs to diversify its supply chains in order to promote “ strategic autonomy , ” while also noting that autonomy doesn ’ t necessarily mean full self-sufficiency .
Japan has perhaps acted the most decisively so far , announcing a new fund to subsidize Japanese firms moving production out of China ; to date 87 companies have taken the government up on the offer .
South Korea is exploring similar @ @ @ @ @ @ @ that such plans for deglobalization will succeed .
They rightly note that contemporary global supply chains are extremely complex , the outcome of millions of individual uncoordinated firm decisions .
Any attempts to unwind these processes will be cumbersome and costly .
Although COVID-19 has prompted firms to revisit the trade-offs between efficiency and resiliency in their own supplier relationships , this does not mean that they ’ ll welcome government interference in such assessments .
In fact , early reports suggest that firms around the world have been cool to their governments @ @ @ @ @ @ @ China .
The skeptics are correct that rewiring supply chains will be difficult , and that firms are unlikely to simply fall in line with the wishes of politicians , particularly when doing so cuts against their bottom lines .
Yet governments have more power to shift supply chains than may be obvious at first glance : Yes , it ’ s true that global supply chains reflect individual firm decisions .
But these decisions are made within a policy environment set by governments .
The current form of globalization is a policy @ @ @ @ @ @ @ .
And it might be worth pursuing them .
Although some politicians ’ rhetoric on supply chains may drift into old-fashioned protectionism , there are genuine concerns about the risks and vulnerabilities that have developed through deep globalization .
Complex global supply chains have undoubtedly improved efficiency and increased consumer choice , but they have also limited states ’ abilities to manage , regulate , and , when necessary , direct the flow of critical goods .
Governments should take the threats of supply chain disruptions seriously , whether from natural disasters , @ @ @ @ @ @ @ of interdependencies in the global economy .
And they should realize that firms ’ individual private interests may not always align with broader public interests , suggesting greater government intervention may be needed .
What is clear , however , is that political exhortations alone won ’ t shift supply chains : Governments need concrete policy proposals , not vague directives , if they want to see real change .
Moreover , restructuring supply chains should be done carefully and strategically , not through ad hoc , piecemeal policy announcements .
In short @ @ @ @ @ @ @ before acting .
Rushing to dole out untargeted subsidies or implement new export controls will be both costly and ineffective : Governments will end up not only wasting money but also failing to address the vulnerabilities that worried them in the first place .
Here are some practical steps to get started .
First , governments need better information on the existing structure of supply chains .
Modern supply chains are intricate webs of purchasing relationships linking hundreds of firms across dozens of countries ; while many individual firms map their direct suppliers @ @ @ @ @ @ @ difficult to piece together the bigger picture of backward and forward linkages both within and across industry groups .
In general , governments do a good job tracking when products move across borders ( in part because they want to tax them , through tariffs ) , but they do a far worse job measuring how various intermediate inputs are integrated into supply chains , or how domestic and foreign production processes interact .
This dearth of data means that governments not only are blind to potential vulnerabilities and bottlenecks in supply chains @ @ @ @ @ @ @ to guide their interventions and avoid unintended consequences .
In the United States , the government has previously carried out supply chain mapping exercises for a handful of so-called strategic industries , such as critical minerals .
In the wake of COVID-19 , it has announced plans to do the same for medical products .
But much more can and should be done : Rather than waiting until key shortages begin upending supply chains , governments should proactively map the linkages across a wide range of industries .
Doing so , however , @ @ @ @ @ @ @ industries are most critical to national security and prosperity .
With a better grasp of the structure of supply chains , the next step would be using these maps to identify potential vulnerabilities .
Much of the recent political rhetoric around supply chain vulnerability has either implicitly or explicitly assumed that sourcing inputs from foreign suppliers—and particularly Chinese suppliers—is risky , while domestic sourcing would be safer and more stable .
But the truth is more complicated : A diversified network of foreign suppliers may be more resilient and better able to respond @ @ @ @ @ @ @ domestic suppliers , for instance .
And the risk of relying heavily on Chinese suppliers will not only vary by product and industry but also depend on the course of future geopolitical relations , which may be difficult to predict .
More generally , given the complexities involved , it may not always be obvious where vulnerabilities lie until confronted with a crisis .
Governments , working in partnership with private firms , can help mitigate these difficulties by running stress tests and war games playing out various scenarios , anticipating how they @ @ @ @ @ @ @ supply networks .
This will not only help policymakers assess sources of supply chain fragility but also identify information and knowledge gaps in their existing understanding .
The third step in restructuring global supply chains will be evaluating the policy toolkit for addressing any vulnerabilities .
This toolkit is much broader than may appear at first sight , as multiple policy interventions can shape the location , complexity , robustness , and resilience of supply chains .
These include stockpiling key inputs and final goods ; subsidies and tax breaks to private firms @ @ @ @ @ @ @ research and development activities ; public investments in education and training to develop workforces prepared for particular production activities ; procurement policies to encourage local production and a diversity of suppliers ; direct production by state-owned enterprises ; tariffs and free trade agreements that incentivize production at home or among friendly allies ; export controls to cut risky or hazardous suppliers out of supply chains ; and competition policies to deter dominance by a few firms in key input markets .
The range of possibilities gives policymakers flexibility to match interventions to the @ @ @ @ @ @ @ .
The final step in preparing to restructure global supply chains is strengthening international coordination .
Many of the recent calls for rethinking supply chains have stressed the importance of increasing national autonomy and self-sufficiency .
Yet paradoxically , if governments want to assert greater control over global markets , in many instances they will need to coordinate to do so effectively .
Sharing information on efforts to restructure supply chains , particularly among trusted allies , will allow governments to better match supply and demand of critical goods , and to learn @ @ @ @ @ @ @ Since government interventions to shift supply chains will necessarily have spillover effects on other economies , coordination can help avoid unforeseen shocks and inefficiencies .
Ultimately , if governments are serious about restructuring supply chains , they will need to invest in the bureaucratic capacity to do so .
Even the basic work of gathering better information will be costly .
The toolkit for influencing supply chains is frequently spread across many different departments and ministries , making policy coherence difficult to achieve .
Moreover , supply chain questions require policymaking processes that @ @ @ @ @ @ @ governments have struggled to do effectively .
Before rushing to restructure supply chains , many governments may want to consider restructuring their own bureaucracies .
Advocates of greater government oversight of supply chains should take the worries and warnings of skeptics seriously : Restructuring supply chains is likely to be difficult and demanding , and it ’ s not clear that policymakers appreciate the scope of such an endeavor .
Current supply chain networks developed over decades and will not be unwound overnight .
Yet this is not a reason to give up @ @ @ @ @ @ @ investments in state capacity that will allow governments to better manage global supply chains over the long run .
This will likely be a slow and difficult process ; after decades of a light-touch , broadly neoliberal approach to globalization , many governments ( and particularly that of the United States ) are out of practice when it comes to implementing industrial policy and other hands-on regulatory measures .
Expect a learning curve , with some missteps along the way .
But with caution and care , governments can shape supply chains to @ @ @ @ @ @ @ better prepared for the next crisis .

Following the global COVID-19 pandemic, a wave of politicians have railed against the supposed vulnerabilities of global supply chains and promised to bring production of critical goods back home.
In the United States, the Trump administration is reportedly “turbocharging” its plans to disconnect supply chains from China and debating a new $25 billion “reshoring fund” to encourage U.S. firms to bring manufacturing back to the states. Not to be outdone, presidential candidate Joe Biden’s campaign has outlined how his administration would tackle supply chain vulnerabilities. He’s placed the topic alongside trade, taxes, and immigration as key planks for managing globalization. Meanwhile, European Union Trade Commissioner Phil Hogan has argued that Europe needs to diversify its supply chains in order to promote “strategic autonomy,” while also noting that autonomy doesn’t necessarily mean full self-sufficiency. Japan has perhaps acted the most decisively so far, announcing a new fund to subsidize Japanese firms moving production out of China; to date 87 companies have taken the government up on the offer. South Korea is exploring similar ideas.
Many outside analysts are skeptical that such plans for deglobalization will succeed. They rightly note that contemporary global supply chains are extremely complex, the outcome of millions of individual uncoordinated firm decisions. Any attempts to unwind these processes will be cumbersome and costly. Although COVID-19 has prompted firms to revisit the trade-offs between efficiency and resiliency in their own supplier relationships, this does not mean that they’ll welcome government interference in such assessments. In fact, early reports suggest that firms around the world have been cool to their governments’ efforts to woo them away from China.
The skeptics are correct that rewiring supply chains will be difficult, and that firms are unlikely to simply fall in line with the wishes of politicians, particularly when doing so cuts against their bottom lines. Yet governments have more power to shift supply chains than may be obvious at first glance: Yes, it’s true that global supply chains reflect individual firm decisions. But these decisions are made within a policy environment set by governments. The current form of globalization is a policy choice; other worlds are still possible.
And it might be worth pursuing them. Although some politicians’ rhetoric on supply chains may drift into old-fashioned protectionism, there are genuine concerns about the risks and vulnerabilities that have developed through deep globalization. Complex global supply chains have undoubtedly improved efficiency and increased consumer choice, but they have also limited states’ abilities to manage, regulate, and, when necessary, direct the flow of critical goods. Governments should take the threats of supply chain disruptions seriously, whether from natural disasters, economic crises, or the deliberate weaponization of interdependencies in the global economy. And they should realize that firms’ individual private interests may not always align with broader public interests, suggesting greater government intervention may be needed.
What is clear, however, is that political exhortations alone won’t shift supply chains: Governments need concrete policy proposals, not vague directives, if they want to see real change. Moreover, restructuring supply chains should be done carefully and strategically, not through ad hoc, piecemeal policy announcements. In short, governments need to do their homework before acting. Rushing to dole out untargeted subsidies or implement new export controls will be both costly and ineffective: Governments will end up not only wasting money but also failing to address the vulnerabilities that worried them in the first place. Here are some practical steps to get started.
First, governments need better information on the existing structure of supply chains. Modern supply chains are intricate webs of purchasing relationships linking hundreds of firms across dozens of countries; while many individual firms map their direct suppliers to assess potential vulnerabilities, it is difficult to piece together the bigger picture of backward and forward linkages both within and across industry groups. In general, governments do a good job tracking when products move across borders (in part because they want to tax them, through tariffs), but they do a far worse job measuring how various intermediate inputs are integrated into supply chains, or how domestic and foreign production processes interact.
This dearth of data means that governments not only are blind to potential vulnerabilities and bottlenecks in supply chains but also lack the maps they need to guide their interventions and avoid unintended consequences. In the United States, the government has previously carried out supply chain mapping exercises for a handful of so-called strategic industries, such as critical minerals. In the wake of COVID-19, it has announced plans to do the same for medical products. But much more can and should be done: Rather than waiting until key shortages begin upending supply chains, governments should proactively map the linkages across a wide range of industries. Doing so, however, will first require a debate on which industries are most critical to national security and prosperity.
With a better grasp of the structure of supply chains, the next step would be using these maps to identify potential vulnerabilities. Much of the recent political rhetoric around supply chain vulnerability has either implicitly or explicitly assumed that sourcing inputs from foreign suppliers—and particularly Chinese suppliers—is risky, while domestic sourcing would be safer and more stable. But the truth is more complicated: A diversified network of foreign suppliers may be more resilient and better able to respond to shocks than a concentrated network of domestic suppliers, for instance. And the risk of relying heavily on Chinese suppliers will not only vary by product and industry but also depend on the course of future geopolitical relations, which may be difficult to predict. More generally, given the complexities involved, it may not always be obvious where vulnerabilities lie until confronted with a crisis. Governments, working in partnership with private firms, can help mitigate these difficulties by running stress tests and war games playing out various scenarios, anticipating how they would respond to possible failures in their supply networks. This will not only help policymakers assess sources of supply chain fragility but also identify information and knowledge gaps in their existing understanding.
The third step in restructuring global supply chains will be evaluating the policy toolkit for addressing any vulnerabilities. This toolkit is much broader than may appear at first sight, as multiple policy interventions can shape the location, complexity, robustness, and resilience of supply chains. These include stockpiling key inputs and final goods; subsidies and tax breaks to private firms producing in specific locations, particularly for research and development activities; public investments in education and training to develop workforces prepared for particular production activities; procurement policies to encourage local production and a diversity of suppliers; direct production by state-owned enterprises; tariffs and free trade agreements that incentivize production at home or among friendly allies; export controls to cut risky or hazardous suppliers out of supply chains; and competition policies to deter dominance by a few firms in key input markets. The range of possibilities gives policymakers flexibility to match interventions to the particular vulnerability they are trying to remedy.
The final step in preparing to restructure global supply chains is strengthening international coordination. Many of the recent calls for rethinking supply chains have stressed the importance of increasing national autonomy and self-sufficiency. Yet paradoxically, if governments want to assert greater control over global markets, in many instances they will need to coordinate to do so effectively. Sharing information on efforts to restructure supply chains, particularly among trusted allies, will allow governments to better match supply and demand of critical goods, and to learn from one another’s experiences. Since government interventions to shift supply chains will necessarily have spillover effects on other economies, coordination can help avoid unforeseen shocks and inefficiencies.
Ultimately, if governments are serious about restructuring supply chains, they will need to invest in the bureaucratic capacity to do so. Even the basic work of gathering better information will be costly. The toolkit for influencing supply chains is frequently spread across many different departments and ministries, making policy coherence difficult to achieve. Moreover, supply chain questions require policymaking processes that integrate economic and security concerns, something governments have struggled to do effectively. Before rushing to restructure supply chains, many governments may want to consider restructuring their own bureaucracies.
Advocates of greater government oversight of supply chains should take the worries and warnings of skeptics seriously: Restructuring supply chains is likely to be difficult and demanding, and it’s not clear that policymakers appreciate the scope of such an endeavor. Current supply chain networks developed over decades and will not be unwound overnight.
Yet this is not a reason to give up, but rather to make the necessary investments in state capacity that will allow governments to better manage global supply chains over the long run. This will likely be a slow and difficult process; after decades of a light-touch, broadly neoliberal approach to globalization, many governments (and particularly that of the United States) are out of practice when it comes to implementing industrial policy and other hands-on regulatory measures. Expect a learning curve, with some missteps along the way. But with caution and care, governments can shape supply chains to be more robust and resilient, and better prepared for the next crisis.


foreignpolicy--2020-07-24--The Blue Nile Is Dammed

The Blue Nile Is Dammed

This month , Ethiopia completed the initial filling of the Grand Ethiopian Renaissance Dam , a nearly $ 5 billion hydroelectricity project on the Blue Nile River .
With 4.9 billion cubic meters of water in the dam ’ s reservoir so far , Ethiopia will now be able to test two of the project ’ s energy-generating turbines .
The country plans to fill the rest of the dam over the next five years , a prospect that worries downstream Egypt , which depends on the Nile for fresh water .
As the two countries continue to negotiate over @ @ @ @ @ @ @ ’ ve gathered our best reads to explain the stakes .
The Blue Nile dam has been a flash point between Egypt , Ethiopia , and , to a lesser extent , Sudan since the project was made public in 2011 .
For Ethiopia , the energy generated by the dam—estimated to be over 6 gigawatts , the largest hydroelectric plant in Africa—is essential to its continued economic development .
The water held in the dam ’ s reservoir , meanwhile , will help it meet its population ’ s water needs .
@ @ @ @ @ @ @ in water flowing its way would be devastating .
In a 2019 article , the researcher Imad K. Harb explained how the seeds of this apparently zero-sum game were sown by colonial-era water-sharing agreements .
For example , according to the 1929 Anglo-Egyptian Treaty , “ Egypt and Sudan were guaranteed an annual supply of 48 billion and 4 billion cubic meters , respectively , out of an estimated yearly yield of 84 billion cubic meters of Nile water .
Another agreement in 1959 between the United Kingdom and independent Egypt increased Egypt @ @ @ @ @ @ @ meters and Sudan ’ s to 18.5 billion cubic meters , with the rest shared by the other countries along the river.
” It is easy to see how , as Ethiopia ’ s population has boomed , the old agreements that guaranteed it only a small share of the river ’ s water started to chafe .
Indeed , Foreign Policy ’ s Keith Johnson wrote in 2018 , a “ dam at the head of the Blue Nile in the Ethiopian highlands has been a dream since the 1960s.
” It @ @ @ @ @ @ @ he continued , “ when Egypt was rocked by the Arab Spring and facing domestic upheaval … that Ethiopia unilaterally decided to start work on the Grand Ethiopian Renaissance Dam.
” Soon , Abdel Fattah al-Sisi , who was Egypt ’ s defense chief and would go on to become the country ’ s leader , threatened to send troops to stop the dam ’ s construction , Johnson noted in an earlier article .
But by 2015 , the countries involved seemed ready to make peace .
“ Egypt , Ethiopia , @ @ @ @ @ @ @ that year , Johnson explained , “ that could help whisk away the bad blood ” over the dam .
The parties agreed , among other things , to “ accept the dam ’ s inevitability and seek to manage its impact on neighboring countries.
” One reason for the sudden chumminess ?
Security .
“ Sisi cited mutual counterterrorism goals in his address ” to the Ethiopian parliament at that time .
Relations took a nosedive once more , though , particularly as Ethiopia ’ s leverage over Egypt increased .
For @ @ @ @ @ @ @ allowed more of the Blue Nile ’ s water than the old treaties allowed “ to flow downstream to Egypt , which [ had ] used more water than it [ was ] entitled to.
” In recent years , though , “ Sudan has sought to increase its own water use , aiming to boost its agriculture sector .
Because it hopes to use the dam for irrigation , Sudan has moved closer to Ethiopia and become a supporter of the project.
” In 2018 , the country warned of Egyptian troops @ @ @ @ @ @ @ its ambassador to Egypt , the latest chapter in a fight that started [ in 2017 ] with trade boycotts.
” In 2019 and 2020 , diplomatic efforts to resolve the dispute picked back up , with the United States offering to mediate talks in Washington , Johnson wrote .
In those meetings , the three countries at least agreed on what points were left to resolve .
There was no time to waste : Ethiopia was scheduled to start filling the dam this July .
The U.S. intervention , though , was @ @ @ @ @ @ @ , a research fellow at the Brookings Institution , warned that the Trump administration appeared to simply be doing Egypt ’ s bidding .
In late February , Ethiopia even temporarily walked away from the negotiations .
“ The country ’ s foreign ministry , ” Lashitew explained , “ has expressed its disapproval of the draft agreement , characterizing it as ‘ unacceptable & highly partisan , ’ while Egypt has noted that it signed the agreement at a meeting where Ethiopia was not present .
Instead of helping resolve these differences @ @ @ @ @ @ @ that argued that the draft agreement ‘ addresses all issues in a balanced and equitable manner ’ and warned Ethiopia that ‘ final testing and filling [ of the dam ] should not take place without an agreement.
’ To Ethiopia , this seemed to confirm the longstanding fear that the United States has been a biased mediator.
” In the midst of the diplomatic breakdown , the COVID-19 pandemic swept the globe , adding renewed urgency to water disputes .
“ For the 4.8 million residents of Ethiopia ’ s capital city @ @ @ @ @ @ @ nothing new , ” argued Alan Nicol of the International Water Management Institute .
“ But in the grip of a pandemic , the latest disruption threw into sharp relief the inequality created by limited and unpredictable access to clean water .
Without a treatment or a vaccine , the primary advice to prevent the spread of the coronavirus is regular hand-washing and good hygiene .
But this is out of reach for millions of Ethiopians living without sustainable access to clean water , laying bare the critical link between water and public @ @ @ @ @ @ @ Ethiopia started to fill the dam , the United States was putting even more pressure on the country to resolve the dispute : “ The Trump administration , ” reported Foreign Policy ’ s Robbie Gramer , was “ weighing withholding some aid to Ethiopia over a Nile dam project that has severely strained its relationship with downstream countries Sudan and Egypt.
” For now , a formal withdrawal of aid is yet to come , and the sides have returned to talks brokered by the African Union .
But with the first @ @ @ @ @ @ @ the pressure will be on to settle this dispute once and for all .

This month, Ethiopia completed the initial filling of the Grand Ethiopian Renaissance Dam, a nearly $5 billion hydroelectricity project on the Blue Nile River. With 4.9 billion cubic meters of water in the dam’s reservoir so far, Ethiopia will now be able to test two of the project’s energy-generating turbines. The country plans to fill the rest of the dam over the next five years, a prospect that worries downstream Egypt, which depends on the Nile for fresh water.
This month, Ethiopia completed the initial filling of the Grand Ethiopian Renaissance Dam, a nearly $5 billion hydroelectricity project on the Blue Nile River. With 4.9 billion cubic meters of water in the dam’s reservoir so far, Ethiopia will now be able to test two of the project’s energy-generating turbines. The country plans to fill the rest of the dam over the next five years, a prospect that worries downstream Egypt, which depends on the Nile for fresh water.
As the two countries continue to negotiate over the dam’s future, we’ve gathered our best reads to explain the stakes.
The Blue Nile dam has been a flash point between Egypt, Ethiopia, and, to a lesser extent, Sudan since the project was made public in 2011. For Ethiopia, the energy generated by the dam—estimated to be over 6 gigawatts, the largest hydroelectric plant in Africa—is essential to its continued economic development. The water held in the dam’s reservoir, meanwhile, will help it meet its population’s water needs. For Egypt, though, the decline in water flowing its way would be devastating.
In a 2019 article, the researcher Imad K. Harb explained how the seeds of this apparently zero-sum game were sown by colonial-era water-sharing agreements. For example, according to the 1929 Anglo-Egyptian Treaty, “Egypt and Sudan were guaranteed an annual supply of 48 billion and 4 billion cubic meters, respectively, out of an estimated yearly yield of 84 billion cubic meters of Nile water. Another agreement in 1959 between the United Kingdom and independent Egypt increased Egypt’s share to 55.5 billion cubic meters and Sudan’s to 18.5 billion cubic meters, with the rest shared by the other countries along the river.” It is easy to see how, as Ethiopia’s population has boomed, the old agreements that guaranteed it only a small share of the river’s water started to chafe.
Indeed, Foreign Policy’s Keith Johnson wrote in 2018, a “dam at the head of the Blue Nile in the Ethiopian highlands has been a dream since the 1960s.” It was only in 2011, though, he continued, “when Egypt was rocked by the Arab Spring and facing domestic upheaval … that Ethiopia unilaterally decided to start work on the Grand Ethiopian Renaissance Dam.” Soon, Abdel Fattah al-Sisi, who was Egypt’s defense chief and would go on to become the country’s leader, threatened to send troops to stop the dam’s construction, Johnson noted in an earlier article.
But by 2015, the countries involved seemed ready to make peace. “Egypt, Ethiopia, and Sudan reached a preliminary deal” that year, Johnson explained, “that could help whisk away the bad blood” over the dam. The parties agreed, among other things, to “accept the dam’s inevitability and seek to manage its impact on neighboring countries.” One reason for the sudden chumminess? Security. “Sisi cited mutual counterterrorism goals in his address” to the Ethiopian parliament at that time.
Relations took a nosedive once more, though, particularly as Ethiopia’s leverage over Egypt increased. For years, Johnson argued, Sudan had allowed more of the Blue Nile’s water than the old treaties allowed “to flow downstream to Egypt, which [had] used more water than it [was] entitled to.” In recent years, though, “Sudan has sought to increase its own water use, aiming to boost its agriculture sector. Because it hopes to use the dam for irrigation, Sudan has moved closer to Ethiopia and become a supporter of the project.” In 2018, the country warned of Egyptian troops on its border and “abruptly recalled its ambassador to Egypt, the latest chapter in a fight that started [in 2017] with trade boycotts.”
In 2019 and 2020, diplomatic efforts to resolve the dispute picked back up, with the United States offering to mediate talks in Washington, Johnson wrote. In those meetings, the three countries at least agreed on what points were left to resolve. There was no time to waste: Ethiopia was scheduled to start filling the dam this July.
The U.S. intervention, though, was not cheered by all. Addisu Lashitew, a research fellow at the Brookings Institution, warned that the Trump administration appeared to simply be doing Egypt’s bidding. In late February, Ethiopia even temporarily walked away from the negotiations. “The country’s foreign ministry,” Lashitew explained, “has expressed its disapproval of the draft agreement, characterizing it as ‘unacceptable & highly partisan,’ while Egypt has noted that it signed the agreement at a meeting where Ethiopia was not present. Instead of helping resolve these differences, the U.S. Treasury released a statement that argued that the draft agreement ‘addresses all issues in a balanced and equitable manner’ and warned Ethiopia that ‘final testing and filling [of the dam] should not take place without an agreement.’ To Ethiopia, this seemed to confirm the longstanding fear that the United States has been a biased mediator.”
In the midst of the diplomatic breakdown, the COVID-19 pandemic swept the globe, adding renewed urgency to water disputes. “For the 4.8 million residents of Ethiopia’s capital city, interruptions to the water supply are nothing new,” argued Alan Nicol of the International Water Management Institute. “But in the grip of a pandemic, the latest disruption threw into sharp relief the inequality created by limited and unpredictable access to clean water. Without a treatment or a vaccine, the primary advice to prevent the spread of the coronavirus is regular hand-washing and good hygiene. But this is out of reach for millions of Ethiopians living without sustainable access to clean water, laying bare the critical link between water and public health.”
By July, just as Ethiopia started to fill the dam, the United States was putting even more pressure on the country to resolve the dispute: “The Trump administration,” reported Foreign Policy’s Robbie Gramer, was “weighing withholding some aid to Ethiopia over a Nile dam project that has severely strained its relationship with downstream countries Sudan and Egypt.”
For now, a formal withdrawal of aid is yet to come, and the sides have returned to talks brokered by the African Union. But with the first phase of filling the dam completed, the pressure will be on to settle this dispute once and for all.