Beijing’s Suez Moment

In his 2011 book After America, Mark Steyn predicted that “one day, Washington will be on the receiving end of Beijing’s Suez moment.” By that he meant China would one day humiliate America the way America humiliated Britain during the Suez Crisis in 1956.

Reading between the lines of Steven Bannon’s exit interviews last week, that day may have arrived.

Bannon’s statements on Friday to the Weekly Standard about payback against the GOP establishment received far more press than the far more interesting statements he made to the American Prospect days earlier:

There’s no military solution [to North Korea’s nuclear threats], forget it. Until somebody solves the part of the equation that shows me that ten million people in Seoul don’t die in the first 30 minutes from conventional weapons, I don’t know what you’re talking about, there’s no military solution here, they got us.

Put aside for a moment that North Korea’s ability to destroy Seoul is a myth. Bannon, who describes himself as a nationalist whose first principle of foreign policy is America First and who believes we will soon experience an apocalyptic “Fourth Turning,” is supposedly so concerned about a conventional attack on Seoul that he’s willing to accept a North Korea capable of a nuclear attack on America’s cities.

I’m not buying it. This sounds like the kind of excuse we’re likely to hear more of from the Trump Administration as North Koreans begin building their first generation of nuclear-tipped intercontinental ballistic missiles. Gone are the days shortly after Trump’s inauguration when he promised to prevent North Korea from acquiring ICBMs capable of hitting the United States. Now, he’s praising Kim Jung-un simply for refraining from firing missiles toward Guam, as is Secretary of State Rex Tillerson.

What accounts for Trump’s apparent capitulation? One explanation is that history is repeating itself in the form of a stealth Suez Crisis, this time with the United States on the losing side. America was on the winning side of the original one that began when Britain, along France and Israel, invaded Egypt in response to Gamal Nassar’s nationalization of the Suez Canal. Dwight Eishehower was determined to stop them. He wouldn’t engage our allies militarily, of course. But he didn’t have to, as explained by the U.S. Army War College:

With just three offensive strikes, the United States achieved its immediate policy aims of forcing Britain and then France to withdraw from the Suez Canal. The three financial warfare strikes were: (1) blocking the International Monetary Fund (IMF) from providing Britain with $561 million in standby credit; (2) blocking the US Export-Import Bank from extending $600 million in credit to Britain; and (3) threatening to dump America’s holdings of pound-sterling bonds unless Great Britain withdrew from the Suez. The credit blockade froze Britain’s ability to borrow and forced it back onto its negative cash flow, effectively bankrupting it. The pound-sterling threat significantly raised the perceived risk of dealing in British currency. That threat, if executed, would have directly affected British ability to trade internationally.

Britain suffered an international humiliation and America became the undisputed leader of the West.

Fast forward 60 years and replace “Suez” with North Korea and “America’s holdings of pound-sterling bonds” with China’s holdings of U.S. Treasuries – over $ 1 trillion worth, to be more precise. A story published in Forbes a few years ago acknowledged that “a decision by China to sell off massive positions of U.S. debt would send the American economy into a downward spiral,” but claimed that China itself would be harmed by such a move.

Maybe the Chinese don’t think so. Or maybe they don’t care. As Steyn pointed out six years ago, China was funding and building ports in Burma, Sri Lanka, Bangladesh, and Pakistan. Its overseas investments, and influence, have grown steadily since then. In short, China seeks to upend America’s economic and military hegemony around the globe. Whatever China may think of the Kim dynasty, it has had commitments to its communist ally spanning over half a century. By making good on those commitments through threats of debt warfare (or worse) against the U.S., and forcing Trump to break his commitments to stop North Korea’s ICBM program, China would make clear to the world who the real hegemon is. That might be worth the temporary economic setback China would endure by dumping its Treasuries.

Steyn’s prediction six years ago about China economically extorting the U.S. far better explains Trump’s capitulation on North Korea than Bannon’s crock about worries over civilian casualties in Seoul, especially in light of Bannon’s concerns over China:

[T]he economic war with China is everything. And we have to be maniacally focused on that. If we continue to lose it, we’re five years away, I think, ten years at the most, of hitting an inflection point from which we’ll never be able to recover.

But in the end, it really doesn’t matter what Trump’s real motive is for capitulating on North Korean ICBMs. John F. Kennedy had his faults. But he understood, in a way that Trump and Bannon apparently do not, that America’s interests, and its safety, depend upon adversaries believing the President of the United States will back up his threats with actions. This is what a president sounds like when he’s serious about confronting America’s enemies:

This urgent transformation of Cuba into an important strategic base — by the presence of these large, long-range, and clearly offensive weapons of sudden mass destruction — constitutes an explicit threat to the peace and security of all the Americas….[T]he greatest danger of all would be to do nothing….And one path we shall never choose, and that is the path of surrender or submission.

By publicly announcing that Soviet missiles in Cuba were an existential threat to the nation, Kennedy burned any bridges that would have allowed him to retreat, thereby making continued American acquiescence of those missiles impossible. Nikita Khrushchev got the message, and while he secured American promises to withdraw its obsolete Jupiter missiles from Turkey and leave Cuba unmolested, his missiles were gone within days.

To grasp just how big of a cat Bannon let of the bag, imagine Pierre Salinger, John F. Kennedy’s press secretary, publicly announcing during the Cuban Missile Crisis that “there’s no military solution here, they got us.” If Khrushchev had believed that Salinger knew JFK’s thoughts the way Bannon likely knows Trump’s, Cuba would still have those missiles.

Peggy Noonan chided Trump for his threat to unleash “fire and fury” on North Korea as “inflammatory rhetoric.” More important than tone, however, is resolve.  JFK had it, or at least convinced Khrushchev that he did. Bannon has signaled that Trump has none. Unless Bannon is completely mistaken, Beijing will have its Suez moment, America will suffer an international humiliation the day North Korea launches its first true ICBM, and the world will be a far more dangerous place for both us and our allies.

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Matthew Monforton

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