Josh Rogin - Chaos Under Heaven

Predicting Failure

The hardliners never believed China would change its industrial policies, no matter how much pressure or negotiation was brought to bear. But through tariffs and pressure, at least China would feel some costs for its behavior. And if the tariffs incentivized both American companies and others to shift away from China, that would ultimately redound to our benefit. “We had to assume they would remain as they are,” David Feith, a hardliner who served in the Trump administration’s State Department, said later. “They were going to be Leninist. They were going to be ideologically paranoid about us. They were going to be hostile to us. And we were going to have to work to make ourselves and our society resilient to their malign conduct and to help other countries do the same.”

Of course, this was not the premise of the trade talks, at least not publicly. The stated goal of the talks was to convince or pressure China to essentially change its entire industrial strategy by changing its laws to accommodate Western ideas of regulatory standards, stopping its bad economic behavior on a range of fronts, and dropping its Made in China 2025 strategy, which was the basis for its innovation expansion and technological approach.

In public, that’s what Trump, Lighthizer, Mnuchin, and even Navarro said was the goal. The hardliners couldn’t stop that. Trump was dead set on getting a deal. But they could try to steer it in ways that would serve other China-related policy goals. The fact that the 301 investigation focused on technology was no coincidence. Focusing the conversation about China on its technological and industrial approach ended up setting the trade deal bar so high, Beijing could never cross it. Was that intentional? Some say yes. Either way, the problem set got defined in a certain way, and it was not just about soybeans.

Pottinger’s Side Hustle

Pottinger, along with other members of the National Security Council staff, was heavily involved in the 301 investigation. But he also used the process to collect and declassify a range of documents he would use for his own parallel project: crafting a secret strategy for countering China.

Pottinger actually ended up drafting two classified, inward-facing strategy documents in the summer and fall of 2017, both of which he hoped would form the basis of government action going forward. One strategy was on countering Chinese economic aggression and included a lot of the work from the 301 investigation plus much more. The economic strategy also included calls for confronting broader issues in the US-China relationship that nobody at that time was talking about publicly. It talked about combatting China’s efforts to steal knowledge from American schools and research institutions through students and researchers, Chinese predatory acquisitions, export controls, semiconductors, and telecom.

Pottinger also led a process to devise another classified strategy called the “Indo-Pacific strategic framework,” which was more regionally focused. This was where Pottinger expanded on his idea to ramp up US engagement in what he thought of as the front-line states—those closest to China geographically and therefore the most affected by China’s rise. This was where the first phase of the new grand strategic competition would play out, he reasoned, so it was where US attention and resources needed to be directed.

Both strategies took elements of Bill’s Paper and built them into a more thorough, albeit secret, plan to reorient the US approach not just to China but to the rest of Asia as well. These documents were meant to provide direction and framing for national security and Asia-focused officials throughout the government and give them explicit permission to increase their attention to confronting Chinese malign activities of all kinds. They were also meant to harness the various parts of the government around the effort. And in this, they would prove to be more successful than Pottinger could have dared to imagine—but that would not be evident for years.

McMaster presented Pottinger’s classified Chinese economic strategy to the president in October 2017 and Trump signed it. The Indo-Pacific strategy was blessed by the president in January 2018. The hardliners had succeeded in changing official US policy on China in the most significant way in a decade—on paper. Those inside the government who wanted to confront China now had explicit guidance to do it. Initiatives in various departments gained steam.

Many of these initiatives would spring into public view over the following three years at different times, often when the wind shifted in the trade negotiations. Inside the system, though, various agencies began working these issues, in more serious ways than before. If you were a China hardliner at any government agency looking for top-level cover to pursue that investigation you had always dreamed of but had been thwarted from doing, this was your moment to shine. The game was afoot. But it had to be done behind the scenes, while the trade negotiations took center stage.

When the trade talks were going poorly, Trump would lift the valve a bit and let some initiatives to confront Chinese bad behavior spill out into the open. When the trade talks were going well, and especially when they were on the verge of a breakthrough, Trump would shut down the anti-China measures and, in some cases, actually undermine them or roll them back. This was a dynamic Xi Jinping understood better than anyone, and he used that knowledge to set Trump against the China hawks on his team at crucial junctures.

Going Public

Pottinger’s secret strategy documents formed the basis of several unclassified policy papers the Trump administration churned out in its first year, including an Indo-Pacific policy review and the China section of the National Security Strategy (NSS), on which Pottinger worked with Nadia Schadlow, an academic and historian who came in as deputy to Gen. H. R. McMaster when he replaced Michael Flynn as national security adviser.

The NSS named China and Russia as “revisionist powers” that wanted to shape a world antithetical to US values and interests. In so doing, the NSS announced a turn away from the focus on counterterrorism and the Middle East that had dominated US national security policy since 9/11. The administration was also declaring in no uncertain terms that China and Russia were American adversaries who were working in tandem to undermine US leadership and shape a world order more amenable to their authoritarian, illiberal model of government.

Several of the themes of Bill’s Paper had made it into official US foreign policy. Pottinger had wanted to bring attention to China’s influence operations, its predatory industrial policies, and its abuse of new technologies for repression and control. Now, he had the platform he had sought. “China seeks to displace the United States in the Indo-Pacific region, expand the reaches of its state-driven economic model, and reorder the region in its favor,” the NSS states. “For decades, U.S. policy was rooted in the belief that support for China’s rise and for its integration into the post-war international order would liberalize China. Contrary to our hopes, China expanded its power at the expense of the sovereignty of others.”

This wasn’t just an exercise in paper pushing. Pottinger and his team were also using the process of forming a written, official Trump administration Asia policy to outwardly socialize the ideas he was focusing on internally throughout various parts of the government.

As an extension of this effort, Pottinger brought in Australia’s top expert on Chinese influence operations, John Garnaut, to meet with US officials and educate them on how Australia had been dealing with Chinese Communist Party (CCP) interference in their politics, their school system, their economy, and their media. Garnaut was one of a small group of Australian journalists and scholars who had spent years exposing corrupt and covert efforts by Chinese agents to infiltrate Australian society. The party used these methods and networks of “friends” to take over China during the country’s civil war, with great success. Now it was applying what Chinese leaders since Mao have described as a “magic weapon” to guide its influence efforts around the world. Nowhere was this more apparent than Australia, where CCP proxies had become dangerously close to politicians and attempted to shift the country’s policy on issues like the South China Sea.