The United States of Sanctions
The Use and Abuse of Economic Coercion
In a year marked by plague and protest, Americans are reckoning with long-overdue questions about racial justice, economic inequality, and disparities in health care. The current crisis should also prompt a reckoning about the United States’ national security priorities. The country is dangerously unprepared for a range of threats, not just future pandemics but also an escalating climate crisis and multidimensional challenges from China and Russia. Its industrial and technological strength has atrophied, its vital supply chains are vulnerable, its alliances are frayed, and its government is hollowed out. In the past, it sometimes has taken a dramatic shock—Pearl Harbor, Sputnik, 9/11—to wake up the United States to a new threat and prompt a major pivot. The COVID-19 crisis should be a big enough jolt to rouse the country from its sleep, so that it can summon its strength and meet the challenges ahead.
Among the highest priorities must be to modernize the United States’ defense capabilities—in particular, moving away from costly legacy weapons systems built for a world that no longer exists. Another is to renew the domestic foundations of its national power—supporting American innovation and bolstering strategically important industries and supply chains. These twin projects are mutually reinforcing. Modernizing the military would free up billions of dollars that could be invested at home in advanced manufacturing and R & D. That would not only help the United States compete with its rivals and prepare for nontraditional threats such as climate change and future pandemics; it would also blunt some of the economic pain caused by budget cuts at the Pentagon. Integrating foreign and domestic policy in this way would make both more effective. And it would help the United States regain its footing in an uncertain world.
For decades, policymakers have thought too narrowly about national security and failed to internalize—or fund—a broader approach that encompasses threats not just from intercontinental ballistic missiles and insurgencies but also from cyberattacks, viruses, carbon emissions, online propaganda, and shifting supply chains. There is no more poignant example than the current administration’s failure to grasp that a tourist carrying home a virus can be as dangerous as a terrorist planting a pathogen. President Barack Obama’s national security staff left a 69-page playbook for responding to pandemics, but President Donald Trump’s team ignored it, focusing instead on the threat of bioterrorism. They dismantled the National Security Council’s pandemic directorate, folding it into the office responsible for weapons of mass destruction, and filled a national medical stockpile with drugs for anthrax and smallpox while neglecting the personal protective equipment needed for a pandemic. The Trump administration also shut down the U.S. Agency for International Development program created during my time as secretary of state to detect viral threats around the world, and it has repeatedly tried to slash funding for the Centers for Disease Control and Prevention. The costs of this misjudgment have been astronomical.
The Trump administration has taken a similarly misguided approach to other nontraditional threats. It omitted any reference to climate change in its 2017 National Security Strategy and attempted to block Rod Schoonover, a senior intelligence official, from briefing Congress about it. The administration also deprioritized cyber-espionage in its trade negotiations with China and failed to confront Russia over its interference in U.S. elections. Unsurprisingly, both countries are at it again.
The problem runs much deeper than Trump, however. Administrations of both parties have long underappreciated the security implications of economic policies that weakened strategically important industries and sent vital supply chains overseas. The foreign policy community understandably focused on how new trade agreements would cement alliances and extend American influence in developing countries. Democrats should have been more willing to hit the brakes on new trade agreements when Republicans obstructed efforts to support workers, create jobs, and invest in hard-hit communities at home. When Republicans failed to use trade-enforcement tools to protect American workers—such as the safeguards against unfair surges of Chinese imports that my husband, President Bill Clinton, negotiated but the Bush administration refused to invoke even a single time—and blocked domestic investments in basic research, infrastructure, and clean energy, Democrats should have more forcefully called their intransigence what it was: not just bad economic policy but a national security liability.
The COVID-19 crisis should be a big enough jolt to rouse the country from its sleep.
Myopia about national security also manifests in the simplistic frames applied to complex challenges, such as insisting on seeing competition with China through the lens of the Cold War. In a speech in July, Secretary of State Mike Pompeo offered this pearl of wisdom: “I grew up and served my time in the army during the Cold War. And if there is one thing I learned, Communists almost always lie.” That’s a remarkably unhelpful way of approaching the challenge. Huffing and puffing about Communists may rile up the Fox News audience, but it obscures the fact that China—along with Russia—poses an altogether different threat from the one the Soviet Union did. Today’s competition is not a traditional global military contest of force and firepower. Dusting off the Cold War playbook will do little to prepare the United States for adversaries that use new tools to fight in the gray zone between war and peace, exploit its open Internet and economy to undermine American democracy, and expose the vulnerability of many of its legacy weapons systems. Nor will such an anachronistic approach build the global cooperation needed to take on shared challenges such as climate change and pandemics.
Meanwhile, the United States’ deep domestic fractures have hamstrung its ability to protect itself and its allies. Consider what happened after the Obama administration painstakingly built an international coalition to force Iran to the negotiating table, including winning the reluctant participation of China and Russia, and then secured a historic agreement to stop Iran’s nuclear program. Trump abruptly renounced the agreement. Now, predictably, Iranian centrifuges are spinning, Tehran is exploring a new alliance with Beijing, and the international sanctions regime is shattered. It’s a frustrating, self-inflicted wound and a reminder of the costs of inconstancy.
The problem is not always too much change; in some areas, it’s too little. The overmilitarization of U.S. foreign policy is a bad habit that goes all the way back to the days when President Dwight Eisenhower warned of “the military-industrial complex.” Many generals understand what James Mattis told Congress when he led U.S. Central Command: “If you don’t fund the State Department fully, then I need to buy more ammunition ultimately.” But many politicians are too afraid of being attacked as soft on defense to listen. So they pile mission after mission on the Pentagon and authorize ballooning military budgets while starving civilian agencies. And, it’s important to emphasize, for decades, right-wing ideological resistance has blocked crucial investments in American diplomacy and development abroad and American innovation at home—from foreign aid budgets to domestic infrastructure and R & D spending.
Like the broader government, the military itself can be slow to adapt to new threats. After the invasions of Afghanistan and Iraq, there were fatal delays in getting up-armored Humvees and lifesaving body armor to troops in the field. Now, the Pentagon is again at risk of being caught unprepared for the very different demands of competing with China. I saw how hard it can be to move a bureaucracy as sprawling as the Pentagon when, in 2004, I was asked to be the only U.S. senator on the Joint Forces Command’s Transformation Advisory Group, which was charged with helping the military reimagine itself for the twenty-first century. The Defense Department had assembled an impressive team of military and civilian experts from a range of disciplines and told them to think as big and boldly as possible, yet our efforts to recommend reforms ran into some of the same obstacles that remain today. Powerful players in the Pentagon, Congress, and the private sector have built careers—and, in some cases, fortunes—doing things a certain way. They have a vested interest in maintaining the status quo.
To be sure, when lives are on the line, it can be more prudent to rely on proven practices than untested innovations. And decisions about military posture and procurement have profound economic and political implications that should not be overlooked. As a senator, I represented many New York communities dependent on defense jobs, and I did everything I could to keep bases open and factories humming, whether it was funding the production of new howitzer tubes at the Watervliet Arsenal and the development of advanced radar systems on Long Island or bolstering the 10th Mountain Division at Fort Drum. I knew how much the jobs meant for my constituents, and I was convinced that each of the appropriations had national security merit. Yet multiply that dynamic across 50 states and 435 congressional districts, and it becomes clear why it’s so hard to retire aging weapons systems or close bases that have outlived their usefulness.
Today, the poster child for this political reality is the F-35 fighter. Development of the plane ran way behind schedule and over budget, and it is estimated to cost $1 trillion over its lifespan, yet it is considered untouchable. The air force sank so much time and money into the project that turning back became unthinkable, especially since the F-35 is the only fifth-generation aircraft currently being manufactured in the United States. And because the plane directly and indirectly supports hundreds of thousands of jobs across hundreds of congressional districts in nearly every state, it has legions of defenders in Congress.
These obstacles to reforming the military are not new, but they are newly urgent. The Pentagon must adapt to a strategic landscape far different from the one it faced during the Cold War or the war on terrorism. New technologies such as artificial intelligence are rendering old systems obsolete and creating opportunities that no country has yet mastered but many are seeking. Then there are the particularly thorny challenges in East Asia. While the American military was fighting costly land wars in the Middle East, China was investing in relatively cheap anti-access/area-denial weapons, such as antiship ballistic missiles, which pose credible threats to the United States’ expensive aircraft carriers.
No one should make the mistake of believing that the People’s Liberation Army is ten feet tall or that the competition with China is primarily a military contest. China has relied on financial coercion and economic statecraft to gain influence as it builds infrastructure around the world. In recent years, while the Trump administration was gutting the State Department and undermining U.S. alliances in Asia and Europe, China was doubling its diplomacy budget and pouring untold billions into developing countries, now outstripping American aid. China today has more diplomatic posts around the world than the United States does.
That said, the military challenge from China is real. The United States should not be lulled into a false sense of security by its continuing firepower advantage or the fact that its defense budget remains orders of magnitude larger than Beijing’s. China’s advances mean that the United States’ air and sea superiority in the region is no longer ensured. This isn’t competition from a military equal but a new kind of asymmetric threat. Americans learned in the sands of Afghanistan and Iraq that asymmetry can be deadly, and the same is true in the skies and seas of East Asia. To make matters worse, the United States must meet this challenge with a military that has been damaged by Trump’s mismanagement. He has degraded civilian oversight of the Pentagon by leaving scores of key posts vacant. At the same time, he has attempted to turn the military into part of his political machine—pardoning war criminals over the objections of military leaders and deploying National Guard troops in Lafayette Square so that he could stage a photo op.
Modernizing and refocusing the military will take both vision and backbone. A big part of the effort will have to involve overhauling the defense budget. Deep savings—potentially hundreds of billions of dollars over the next decade—can and should be found by retiring legacy weapons systems. But choices about where to cut and where to spend must be driven by a clear-eyed analysis of national security needs, not politics. The United States can’t afford to repeat the mistakes of the 2013 budget sequestration, when Congress forced the Pentagon to slash budgets indiscriminately, with no overarching strategy. This work is going to require a president and a secretary of defense who are rigorous in their analysis and comfortable consulting with Congress and the military brass but prepared to make difficult decisions about which missions to prioritize and which to de-emphasize or eliminate. To insulate these decisions from political pressure, Congress should agree to take an up-or-down vote on a comprehensive package of defense reforms—a process that has been used in the past for closing military bases—rather than haggling over each adjustment.
Changes to the budget should aim to prepare the United States for asymmetric conflict with technologically advanced adversaries. For example, aircraft carriers still play an important role in U.S. power projection around the world but are vulnerable to Chinese antiship missiles, which cost a fraction of the price. In addition, only a handful of the U.S. Navy’s 11 aircraft carriers are usually operational and at sea at any given time, with onerous maintenance keeping others in port. Instead of continuing to expand the fleet of vulnerable surface ships, the navy should invest in accelerated maintenance and next-generation submarines. Similarly, as anti-access/area-denial weapons force U.S. aircraft carriers and guided-missile cruisers to stay farther away from potential targets, the U.S. Air Force will have to focus less on short-range tactical fighter planes and more on long-range capabilities. That means it won’t need nearly as many F-35s as planned, but it should welcome the arrival of the B-21 Raider, a long-range bomber under development that is designed to thwart advanced air defenses. These capabilities must be accompanied by mechanisms that allow for consultation with China and Russia to reduce the chances that a long-range conventional attack is mistaken for a nuclear strike, which could lead to disastrous escalation.
As the United States leaves behind a period dominated by land wars and looks ahead to potential air, sea, and space conflicts, the army should accept the risks that come with a smaller active-duty ground force. A force with fewer soldiers and heavy tanks would match the strategic moment and cost far less. Maintaining fewer active-component armored brigade combat teams, for example, could save tens of billions of dollars over the next decade. Instead of heavy tanks, the military should be investing in tools that will give troops an edge in the conflicts of the future, including upgraded communications and intelligence systems.
Modernizing and refocusing the military will take both vision and backbone.
Perhaps most important, the United States needs a new approach to nuclear weapons. For starters, it should not be deploying low-yield nuclear warheads on submarines or nuclear-armed cruise missiles, which expand the range of scenarios for the use of nuclear weapons and increase the risk of a misunderstanding escalating quickly into a full-blown nuclear exchange. Nor should the United States spend $1 trillion over the next 30 years on its nuclear arsenal, as is currently planned. Instead, it should significantly reduce its reliance on old intercontinental ballistic missiles, pursue a “newer and fewer” approach to modernization, and revive the arms control diplomacy that the Trump administration scrapped. A top priority should be to extend the New START treaty with Russia, which Ellen Tauscher, the State Department’s top arms control official, and I helped negotiate at the beginning of the Obama administration. It will also be important to persuade China to join nuclear negotiations.
A renewed commitment to diplomacy would strengthen the United States’ military position. U.S. alliances are an asset that neither China nor Russia can match, allowing Washington to project force around the world. When I was secretary of state, for example, we secured an agreement to base 2,500 U.S. marines in northern Australia, near the contested sea-lanes of the South China Sea. Yet Trump treats the U.S. alliance system as nothing more than a protection racket—for example, warning NATO partners that they must “either pay the United States for its great military protection, or protect themselves.” Although it’s appropriate to emphasize the need for burden sharing, it is more constructive to think of a division of labor. As the United States focuses on modernizing its air and sea capabilities, it will make sense for other NATO members to concentrate on strengthening their conventional ground forces so that they can deter incursions in eastern Europe or lead counterterrorism missions in Africa.
That is how the United States should modernize its approach to defense—one of the three Ds, along with diplomacy and development, that for more than a decade I have said should be integrated as part of a “smart power” strategy. Now, it’s time to add a fourth D: domestic renewal, the rebuilding of the country’s industrial and technological strength.
The United States’ dwindling industrial capacity and inadequate investment in scientific research leave the country dangerously dependent on China and unprepared for future crises. The problem goes back decades. When the USS Cole was bombed in 2000, I was shocked to learn that there was only one American company left that manufactured the specialized steel needed to repair the ship’s hull. Twenty years later, the pandemic has underscored how much the United States relies on China and other countries for vital imports—not just lifesaving medical supplies but also raw materials such as rare-earth minerals and electronic equipment that powers everything from telecommunications to weapons systems.
The United States should pursue a plan like the one proposed by former Vice President Joe Biden to invest $700 billion in innovation and manufacturing and impose stronger “Buy American” provisions, with the goal of jump-starting domestic production in key sectors—from steel to robotics to biotechnology—reshoring sensitive supply chains, and expanding strategic stockpiles of essential goods. It’s time for ambitious industrial policies. China does whatever it can to gain an advantage, including conducting industrial espionage on a massive scale, pursuing a range of unfair trade practices, and providing virtually unlimited resources to state-owned and state-backed enterprises. The United States doesn’t need to cheat or steal, but it can’t afford to compete with one hand tied behind its back.
The United States can’t afford to compete with one hand tied behind its back.
Although it is a mistake to use national security as a catchall justification for blanket protectionist trade policies, as Trump has done, policymakers should widen the range of industries and resources deemed vital to it. It’s not enough anymore to prioritize materials and technologies used for weapons systems and semiconductors; the United States’ security also depends on the control of pharmaceuticals, clean energy, 5G networks, and artificial intelligence. That’s one reason it’s crucial to reverse the long-term decline in the federal share of spending on R & D. Another reason is that investments in basic science and medical research can yield huge economic gains: economists at MIT have estimated that increasing federal funding for research in the United States by 0.5 percent of GDP, or about $100 billion per year, would create some four million jobs.
Massive new investments in advanced manufacturing and R & D will be expensive, but they are necessary for the United States’ long-term economic and security interests and will pay off for years to come. Critics will no doubt warn that running up the national debt is itself a national security risk. But at a time of historically low real interest rates and historically high unemployment, the country should not shy away from bold investments. There is a growing consensus among economists that Washington need not be paralyzed by fears of debt and that it can afford to spend heavily on critical national investments that bring high returns, especially during a crisis. Indeed, what the United States cannot afford is to defer these investments any longer.
These two agendas—military modernization and domestic renewal—should be integrated. Moving away from outdated weapons systems will cause economic disruption and real hardship. That’s why it should be done in tandem with targeted investments in economically struggling communities, bringing advanced manufacturing and R & D to the places most affected by defense cuts. In fact, as a study by economists at the University of Massachusetts, Amherst, has found, $1 billion spent on clean energy, health care, or education creates, on average, far more jobs than the same amount of military spending.
I’m not suggesting telling laid-off factory workers to reinvent themselves as coders; that’s fanciful and condescending. Previous pledges to support workers who lost their jobs because of defense cuts or trade policies have often fallen abysmally short. But the U.S. government can do more to help displaced workers and those leaving the military transition to the millions of new jobs that could be created through major new domestic investments. In 2008, when the U.S. Air Force retired the F-16s based at Hancock Field Air National Guard Base, in Syracuse, New York, I helped secure funding to turn the base into one of the military’s first major drone bases, saving hundreds of jobs. American history is full of examples of factories, communities, and entire industries pivoting when they had to. During World War II, the auto industry shifted gears with incredible speed to make tanks and bombers. At the beginning of the pandemic, it shifted swiftly again, to produce desperately needed ventilators and personal protective equipment. With the right long-term investments, communities can reinvent themselves successfully. Pittsburgh, once a center of steel production, has become a hub for health care, robotics, and research on autonomous vehicles.
Many legacy weapons systems are built or based in communities with skilled workforces that can and should be the backbone of the country’s renewed self-sufficiency. Think of Syracuse, which has long been a center of defense manufacturing, a bright spot in an otherwise difficult economic picture. In 2017, the Brookings Institution ranked Syracuse dead last for economic growth out of 100 U.S. metro areas, so it could ill afford to lose any of the defense jobs keeping the region afloat. Yet a 2019 ranking by a pair of MIT economists put the city as the third most promising technology hub in the country, thanks to its skilled workers and low cost of living. It’s exactly the kind of place where significant public investments in advanced manufacturing, clean energy, and R & D could create good jobs and help the United States outcompete China.
Washington need not be paralyzed by fears of debt.
So is Lima, Ohio. Hundreds of people work at the city’s Abrams tank factory. Even though General Ray Odierno, then chief of staff of the U.S. Army, told legislators in 2012, “We don’t need the tanks,” Congress kept the factory open. It’s true that the plant’s workers and their community have devoted themselves to protecting the United States, and the country absolutely must keep faith with them. It’s also true that the military still doesn’t need the tanks. But if the United States is to get serious about climate change, what it does need are more factories to churn out clean electric vehicles. The Pentagon alone should replace most of its fleet of 200,000 nontactical vehicles with electric. Some of those new vehicles could be built in Lima, which is already home to a large Ford engine factory. And that’s just one possibility. If Washington decides to boost domestic production of next-generation electric batteries, wind turbines, and other strategically significant products, Northwest Ohio is a natural place to do it.
No one should pretend that every defense job can be saved or replaced. Cutting hundreds of billions of dollars in military spending over the next decade will inevitably inflict a painful toll on families and communities across the country. But if the government can pair these cuts with major new investments in affected communities, it can minimize the economic damage and maximize the United States’ ability to compete with China and prepare for future challenges.
All of this requires leadership from the top. Having a commander in chief with no experience—and no empathy or vision—has been a disaster. But it’s hard to imagine a man better suited to lead the work ahead than Biden, a former chair of the Senate Foreign Relations Committee who has deep expertise in national security policy, a military father who knows how much the country owes its men and women in uniform and their families, and a champion of working people who fought to save the auto industry when others would have let it go bankrupt.
In the throes of a crisis as dire as any the United States has seen in many decades, it can be difficult to imagine what the world will look like in four months, let alone four years. But the country needs to be thinking now about the threats it will face in a post-pandemic future, as well as the opportunities it must seize. As former Secretary of State Dean Acheson recounted in his memoirs, when George Marshall led the State Department, he urged his team to look ahead, “not into the distant future, but beyond the vision of the operating officers caught in the smoke and crises of current battle; far enough ahead to see the emerging form of things to come.” The United States should endeavor to do the same today. To look beyond the current battle and prepare to lead the post-COVID world, it must broaden its approach to national security and renew the foundations of its national power.