Two recent presidential economic decisions have cheered America’s adversaries and antagonized our friends and allies, but there may be a way to modulate the actions and engender a more positive domestic and international dynamic.
It may well be that Chinese banks doing business with North Korea, thus undermining U.N. Security Council sanctions and further enabling Pyongyang's nuclear and missile programs, are too big to punish. At least, this has been the rationale for giving them a pass.
It may also be the case that to protect America's steel and aluminum industries against unfair competition, across-the-board tariffs are necessary against friends and foes alike, as U.S. President Donald Trump has said.
Hopefully, however, the administration is considering some fine-tuning to target the real international wrongdoers and avoid collateral damage to America's genuine partners and allies. One question is whether the tariffs can be imposed selectively on countries whose governments deliberately undermine U.S. national security by, for instance, supporting and enabling North Korea's nuclear and missile programs.
According to the Commerce Department Fact Sheet, section 232 of the Trade Expansion Act of 1962 authorizes protective action if "the article in question is in such quantities or under such circumstances as to threaten to impair the national security." (My emphasis.) Theoretically, the secretary could adhere to his present finding by applying tariffs to all steel and aluminum imports, but he also could recommend not imposing punitive tariffs against allied and friendly countries, while leaving them in place against others.
The distinguishing factor would be not the quantities of the imports but "the circumstances [that] threaten to impair the national security." Those circumstances might be defined broadly as the myriad ways certain countries — led by China and Russia – intentionally harm America's security. If administration lawyers can satisfy themselves that the distinction is legally defensible under statutory history and WTO rules, then a two-tier tariff schedule could be implemented.
Under that nuanced approach, the administration would not impose tariffs on our friends and allies. But adversarial and miscreant governments could suffer tariffs far higher than the 25-percent and 10-percent levels presently contemplated for steel and aluminum, respectively. Indeed, punitive levels could reach as high as 100 percent. Whatever the economic impact on China, Russia, and other states defying the international order, the political message would be clear.
With far fewer countries affected by the U.S. tariffs, the problem of global retaliation and trade war would be reduced to more manageable levels. Washington would have to contend only with all-but-declared adversaries like China and Russia — who pose challenges that need to be addressed in any event.
There was another unfortunate event last week – the president's ill-considered endorsement of Chinese President Xi Jinping's expanded autocratic tenure. The president's professed admiration for Xi’s naked power grab may have been intended to soften the blow Trump is about to deliver when he signs the Taiwan Travel Act, which the U.S. Senate passed unanimously, encouraging more high-level official interactions with the United States.
The president should sign this act with at least the same enthusiasm for Taiwan's democracy as he mustered for China’s deepening dictatorship. This would be an opportune time for an unequivocal commitment to Taiwan's defense pursuant to the Taiwan Relations Act. Discarding the counterproductive doctrine of strategic ambiguity once and for all would do Xi a useful favor by preventing the dangerous strategic miscalculation that America will not stand by its long-time ally.
Countries all around Asia would take heart at the further expression of U.S. resolve that already appears to be producing positive movement by North Korea. Without explicitly reversing either of the earlier decisions, these simple presidential actions would go a long way toward restoring American credibility and respect.
Joseph Bosco served in the office of the secretary of defense, 2002-2010. The views expressed are the author's own.
