The United States is facing down an existential threat right now.
That existential threat comes from a lack of willpower. It comes from a doubt about what America is. But in terms of foreign policy, that existential threat comes from a team-up that has been growing.
That team-up is between China — which is really the sponsor state of the anti-American bloc — and its friends like Russia and Iran.
The existential threat doesn&#8217;t mean that China is going to attack the United States.
It does mean that as the United States recedes from the world, Russia will expand its sphere of influence in Eastern Europe. China will expand its sphere of influence, not just in the Far East, but also in Africa, across the rest of Asia into South America. The United States is going to be in the unenviable position of having to withdraw from the world, and we will no longer be able to guarantee freedom of the seas.
A United States with no economic allies, a United States that is a secondary partner for all the rest of these countries while China is a primary partner, is a United States that has an economy that is shrinking, a United States that is forced within its own borders.
That is a problem.
There is this bizarre notion that has arisen on the Right that if the United States were to be essentially an autarky and withdraw from the rest of the world, suddenly things would get better. The belief that the amount that we expend in foreign aid, for example, or military expenditure, is a complete waste of money, and if we just spent that money at home, then magically everything would get better.
The problem, of course, is that the world is interconnected. The reason that you can obtain better, cheaper products that make your life easier every single day is because the interconnection of world trade makes that possible. And that, of course, is only possible because of the power of the United States economy and the power of the United States military.
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Why do I bring that up? Because China seems to be posing a broader and broader threat, and yet there is a bizarre unwillingness on the Left to acknowledge the threat that is China.
And on the Right, there seems to be an unwillingness to deal with the actual realities of what it would mean to face down China in a responsible and coherent fashion.
In the West, there is the bizarre perception that what we ought to do is radically increase tariffs, not just on China — which would be retaliatory and worthwhile — but on everywhere else. 
That is a gigantic mistake. And it leads to questions about the overall policy of the United States vis-à-vis China.
What exactly are we trying to do vis-à-vis China? 
I&#8217;ve made the case that if you wish to face down China, you have to do a few things. One is that you need closer trade and security relationships, not more attenuated relationships, with other countries surrounding China, including Japan, South Korea, Taiwan, and India.
Better relations with those countries will help box in and essentially isolate China. If China wants to cheat, if they don&#8217;t want to play by the rules, if China wishes to beggar its neighbor, let them pursue an autarkic economic policy.
Autarky tends to make the country pursuing it poorer over time. Initially, it looks like an explosion of economic activity, but over time, as countries start pouring resources into less efficient modes of manufacturing in order to do it at home, rather than to import those products from abroad, they tend to empty themselves out.
This is the common pattern in economics. Every mercantilist or fascist economic system that has worked like this shows very good early growth numbers. And then that growth curve eventually peters out, and the country ends up with economic stagnation.
This happened in Japan. It happened in South Korea. If you go back prior to World War II, this happened in Germany. One of the reasons that Germany, under the Nazis, had to become an expansionist power is because Germany tried to pursue economic autarky in the 1930s, and they saw, for a brief moment in time, a gigantic manufacturing boom, people getting off unemployment lines, moving out of the Weimar Republic era.
But as it turns out, they were doing that based on state expenditures that made them less economically viable over the long term. And so then they had to turn to actual physical territorial expansionism.
Autarky very often turns into a necessity for expanding your access to resources, which leads to invasions of other countries. It is not a coincidence that countries that tend to embrace a strong mercantilist policy, an economic policy that focuses on “Let&#8217;s build everything right here at home,” find that when they can’t, they have to expand their own territorial borders or the places under their immediate dominion.
Free trade generally means that you don&#8217;t have to invade other places because you can trade with those other places.
So, when you look at China, how would you stop China? We need to build up better security and economic relationships in the Far East, and also build up better security and economic relationships with Europe.
That means that we can use tariffs as a way to force the Europeans to get rid of their non-tariff barriers. One of the ways I would be forcing the Europeans to pay their fair share is by using things like tariffs, in order to push the Europeans to pay their fair share. When it comes to, for example, the price of pharmaceuticals, Europe pays far less than what the actual market rate should be for pharmaceuticals, and then the United States ends up paying for that via our taxpayers and via our consumers.
That’s just the way that it works. We should stop that.
There are things that we can do to fight the non-tariff barriers and also the unfairness of our systems with Europe. But in the end, we should be pursuing freer trade and better relationships. 
That’s because if you&#8217;re going to box in China, you need to offer both the carrot and the stick to China, but just carrots to our friends. 
When it comes to offering carrots for our friends, we can offer a little bit of the stick in order to achieve the carrot. That is why I&#8217;m not against using tariffs as a way to pressure other countries to lower their tariffs. This is a case that Treasury Secretary Scott Bessent has made.
You need to box China in. You need to treat them like the adversary they are.
You need to build out other lines of supply. You need supply chains that are diversified, so we&#8217;re not as reliant on China.
You need to cut off China&#8217;s allies at the knees. If we believe, as we should, that Russia is a geopolitical adversary of the United States, then obviously we should be pursuing an attempt to get Russia to stop invading Eastern Europe.
And that means supporting allies in the region to the extent necessary to stop the Russians, because it&#8217;s not as though Russia and China aren&#8217;t talking to each other. They&#8217;re talking very extensively to each other.
If we are attempting to form a better relationship with India, then we should be attempting to form a better relationship with them. We should be trying to make trade relations with India so beneficial to India that they don&#8217;t want to trade with the Chinese. There are natural differences in opinion between China and India, which have nearly come to blows several times over the course of the last several decades.
India and China are not working hand in glove. They have actual territorial conflicts. We could be attempting to pry India out of China&#8217;s sphere of influence. 
These are all things that a responsible foreign policy would do.
And then we certainly would not be shipping many of the most important components in the battle for the future to China.
China is already stealing our intellectual property. China is already cheating when it comes to trade relationships. China is already badgering its neighbors. Why should we be sending some of our most sophisticated microchips produced in the United States? Why should we be allowing those to flow into China? Even if we&#8217;re going to argue that it&#8217;s only a marginal increase in China&#8217;s capacity, why would we allow that increase in China&#8217;s capacity?
China is our geopolitical enemy. They are our opponent. Trying to pretend otherwise is foolish because if you allow China to continue pursuing its normal policies, China will blow itself out.
China has a serious demographic problem. It does not have enough people. China is in steep demographic decline. Even though they have a billion people, they do not have enough human beings to be able to generate the economic growth necessary to pay for their gigantic redistributionist schemes and mercantilist ideas.
They have an enormous debt problem. They&#8217;ve been burying that debt problem in local and regional debt issues, and then building gigantic empty cities rooted in debt that they&#8217;re taking out from their own citizens and against their own citizens.
We tend to look at the fact that China builds some nice things and say, “Wow, they must be doing it right.”
But the fact is that mercantilism looks systematic when you look at the areas where it succeeds, but looks like a trash heap when you look at the areas where it doesn&#8217;t succeed. The areas where you don&#8217;t succeed in a centralized economy are the areas that tend to be ignored, and there are a lot of them.
Capitalism looks really messy, but it has a much higher hit rate because capital follows the best ideas. You don&#8217;t just keep investing in bad ideas the way you do with a centralized economic system, like China.
There are ways to box in China.
The question is whether the United States will actually do it.

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What Do We Do About China?

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What Do We Do About China?