What’s Behind the War on China
By Manuel E. Yepe
Exclusive for the daily POR ESTO! of Merida, Mexico.
Translated and edited by Walter Lippmann.
In geopolitics, it is rare that events are what they seem to be. This is especially true when we look closely at the strange “war” launched by Trump this spring under the guise of a trade war “to make up for the enormous annual deficit in the U.S. trade balance, the most extreme of which is that of China.”
The real motor force for Washington’s tariff war attacks on China can only be understood when we look at it through the prism of the U.S. Administration’s most recent report on the industrial base of US defense industry.
That’s how F. William Engdahl, a strategic risk consultant and U.S. professor based in Germany, understands it.
Coming out of the work of a special group charged with it a year ago, by a little-known Presidential Executive Order, the report is a detailed analysis of the sufficiency or incompetence of the industrial supply chain that feeds the vital elements of the U.S. armed forces.
The declassified version of the report cites 300 vulnerabilities or gaps in the nation’s military industrial base. It reveals in great detail that the national economy can no longer provide the basic essentials of national defense as a consequence of globalization and industrial outsourcing.
He details the dramatic shortage of skilled workers in areas such as machining, welding, and engineering. Vital machine-tools are imported, mostly from Germany, a country with which Washington does not have the best relations at present.
Many small suppliers of the main sub-components are specialized from a single source, many of whom are on the verge of insolvency due to U.S. budgetary uncertainties in recent years.
The defense industry depends on China for virtually all of its rare earth metals, as the set of naturally scarce metals that are vital to various technological applications of the military industry are known.
Since the 1980s, domestic metal mining in the United States has virtually collapsed for economic reasons, as suppliers moved to China in search of cheaper sources.
Today, 81% of the rare earth metals needed by military equipment, superconductors, smartphones and other high-tech applications come from China.
The report says that in many cases, the only remaining producer of critical materials is on the verge of shutting down its U.S. factory and importing lower-cost materials from the same foreign producer that forced them to abandon domestic production.
It highlights the alarming potential bottlenecks from dependence on a single source for the propeller shafts of navy ships, cannon towers for tanks, fuel for rockets and space-based infrared detectors for missile defense, among others.
The report is the most comprehensive critical look at the military industrial base that has been made since the early Cold War years in the 1950s. It blames U.S. arms companies for relying on vital components outsourced to China, which it sees as the United States’ greatest strategic threat.
Today Asia produces 90% of the world’s printed circuit boards and half are made in China. Beyond relying almost entirely on Chinese suppliers of rare earth metals, the Department of Defense contracts the acquisition of weapons with the largest consortiums. These in turn subcontract in their supply chain to the most efficient, which are often those of China.
It is claimed that the US defense industry depends on Chinese producers for 100% of its rare earth materials. A report by the Government Accountability Office in 2016 described the issue as fundamental to national security.
The main conclusion of the report is that “China poses a significant and growing risk to the supply of materials considered strategic and critical to U.S. national security.”
This also explains why the focus of the Trump Administration’s current trade war against China is, in fact, to press China to abandon its Made in China 2025 agenda, which aims to bring China to dominate advanced technologies in the coming decades.
The report states that “China’s dominance in the market for rare earth elements illustrates the potentially dangerous interaction between economic aggression against China, guided by strategic industrial policies, vulnerabilities and gaps in the U.S. manufacturing and defense industrial base.”
November 26, 2018.
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