Will the United States forge a more isolated path for themselves after November 5?

Will the United States forge a more isolated path for themselves after November 5? Roberta Haar highlights the American debate about the relationship with China, and the consequences for the Netherlands and Europe.

In mid-May, I participated in a “Politics and Political Culture in America” roundtable organized by the Atlantic Commission for the Dutch Ministry of Foreign Affairs.

To ensure a candid discussion, we followed Chatham House rules, but this does not prevent me from sharing my advice, which focused on the current deliberations and doubts in America about multilateralism’s benefits, especially regarding emerging technologies and China.

Today, three coalitions are shaping U.S. foreign policy on multilateralism. One supports continued engagement for mutual benefits, another seeks to weaponize technology against China, and the third, which dominates the Joe Biden administration, advocates a mixed approach of selective decoupling and containing China and its emerging technologies.

Three Visions for America’s Global Strategy

The group of specialists gathering in The Hague agreed that trends such as political polarization, along with economic worries tied to inflation and trade deficits, plus concerns about immigration and border security are currently high on any list of domestic developments that drive U.S. foreign policy.

My contribution to the roundtable emerged from my current exploration within the REMIT research project, which focuses on understanding the debate amongst U.S. foreign policy elites regarding the benefits of multilateralism and China.

I identify, along with my coauthor Ville Sinkkoen, a Senior Researcher at the Finnish Institute of International Affairs (FIIA), three coalitions with differing views on the benefits of the postwar rules-based order when it comes to emerging technologies and China.

The first group of foreign policy elites argues for continued engagement, believing that integration and collaboration lead to shared benefits, improved global standards, and the diffusion of technological advancements.

A second group wants to weaponize strategic and emerging technologies to gain advantages in the great power competition with a Communist China that is intent on subverting the U.S.-led liberal order. This group dominates any would be incoming Donald J. Trump administration.

The third coalition advocates somewhere in between—a flexilateral approach—that employs selective decoupling, and blunting tactics to limit technological interdependence and to reduce reliance on Chinese critical supply chains.  It is this third group that dominates the Biden Administration.

How did we get here?

The fact that the Biden administration is predominantly flexilateral is surprising from a historical perspective since all previous postwar Democratic presidents were confidently and stridently multilateral. Moreover, Biden often professed “we’re back” thinking when speaking about U.S. foreign policy and multilateralism.

So, how did we get here?

If we carefully examine the domestic landscape over the past decade, including its pressures on foreign policy, we can see a shift in U.S. thinking on multilateralism began during the Obama administration.

Although Obama and his Secretary of State Hillary Clinton argued that multilateral engagement with China was in America’s interests and even negotiated a bilateral investment treaty with China, the culmination of several external events affected U.S. views on the benefits of multilateralism. I will focus on three of these events as the most impactful.

The first important event was the 2008 fiscal crisis, which triggered a recession in the U.S. that in turn led to budget cuts and a curtailed foreign policy. Within two years, the U.S. was dubbed a “frugal superpower.” Domestically, the financial crisis shifted the balance of opinion from supporting free trade with China to opposing it. Isolationist voices, always present among U.S. foreign policy elites, gained significant influence as a result.

That the financial crisis potentially made China the U.S.’ leading creditor added to the fears expressed by China’s critics and those calling for mounting protectionist measures.

The second event relates to China’s continued economic rise (fueled in part by subsidies, dumping, currency manipulation, and intellectual property theft), which was followed by Chinese military and political assertiveness. These realities began to further impact the U.S.’ views on free trade and an integrated global economy.

Like all Democratic presidents before him, Obama’s reflexive response was a multilateral one: the already mentioned U.S.-China Bilateral Investment Treaty (BIT) and the Trans-Pacific Partnership (TPP), a proposed trade agreement that the Obama administration negotiated with 12 Pacific Rim countries.

The third shock to U.S. foreign policy is Trump’s election, which marked a complete shift away from multilateralism. There is no better example of this shift than Trump’s withdrawal from the TPP on 23 January 2017, his first day in office. This was soon followed by blocking the appointment of new trade dispute judges on the World Trade Organization’s 7-member appellate body, thereby preventing the normal functioning of the WTO. In 2018, Trump initiated a trade war and barred the Chinese communications company Huawei from receiving U.S.-made semiconductor chips.

What is Biden to do?

For the sake of symmetry, here are three reasons why Biden continued a Trumpian approach to economic multilateralism. First, Biden could not escape the rising domestic pressure for a harder stance on trade and issues related to globalization.

Second, Biden also contended with a shift towards restraint within his own party, New Strategic thinkers in the Democratic Party argue that Trump is right to advocate restraint, views that align closer to isolationists than to multilateralists.

For good or for ill, the progressive part of the Democratic Party has fallen out of love with globalization, especially for the left-behind places in America that used to have vibrant manufacturing.

A third reason, which is also the most important, is that a core group of Biden’s Asia-Pacific specialists (who reside mostly in the National Security Council) have been advocating a blunting and a decoupling strategy with regards to China since 2008.

Many of these key advisors are from the Washington, D.C. think tank the Center for a New American Security (CNAS); most prominently Kurt M. Campbell, Ely Ratner, and Rush Doshi but also Michèle Flournoy, who co-founded CNAS in 2007 with Campbell. These specialists argue that the realities of the geopolitics of technology propel shifts in U.S. foreign policy towards flexilateralism.

The Flexilateral approach

In keeping with my line of argumentation, I will outline three geopolitical factors identified by these Democratic Party foreign policy specialists that is driving shifts in U.S. foreign policy towards flexilateralism. The first factor is the impact of emerging technologies on the economic competitiveness of states as well as the sector’s pivotal role in national economic strength. These views align with the New Isolationists coalition.

Coupled with this economic reality is the acknowledgment of the intimate link between technology and national security and defense. The 2022 U.S. National Defense Strategy highlights this reality, pointing to China’s pursuit of a technological edge to disrupt the global order.

The third complicating aspect of the emerging technology landscape that flexilateralists highlight is the entanglement of U.S. investments in Chinese private technology companies, which in recent years have faced repression by the Chinese Communist Party.

A recent Economist article highlighted these dangers by pointing out that the value of the Chinese stock market has fallen by around $7 trillion since 2021, with $1.5 trillion being lost in January of this year alone.

What are the consequences for Europe and the Netherlands?

In the second part of our roundtable, we discussed the consequences of these developments. What impact do these domestic trends have on America’s future role in the world—be it multilateral, bilateral, or unilateral? Is a change of course to be expected, and if so, why should the Dutch care?

In keeping with my three-point approach, I offered three consequences of a U.S. retreat from multilateralism. Firstly, it could significantly affect global economic stability.

It can lead to increased protectionism and trade barriers that further disrupt global supply chains and cause economic instability. It would certainly further weaken international economic institutions, like the WTO, and further undermine global trade governance and dispute resolution mechanisms.

Other countries may also retreat from multilateralism, leading to a fragmented global economic order. Indeed, these possibilities were recently vocalized by Emmanuel Macron in his 2 May 2024 interview with The Economist in which he said, “the multilateral context has changed” because of the Americans.

This leads to the second consequence: it could strain European nation states’ security and defense relationship with the United States—just when they realize the greatest threats to their security and defense since the end of the Cold War.

This leads me to my last point, which focused on the Netherlands. The Dutch could feel these negative effects more than other European countries because of their trade-dependent economy and their reflexive Transatlanticism. Dutch exports to the U.S. could face higher tariffs and regulatory hurdles, affecting key sectors like technology, agriculture, and machinery.

Plus, major ports like Rotterdam, could see a shift in global shipping and logistics patterns, affecting their status as key logistics hubs. Add to this, a reduction in economic cooperation could hinder collaboration in technology and innovation, areas where the Netherlands has strong interests and capabilities. An expanding Dutch tech sector will need to navigate a more complex global landscape to maintain partnerships and market access.

What happens after November?

Of course, the upcoming U.S. elections will play a pivotal role in the trajectory of American foreign policy. However, no matter who is in the White House foreign policy will continue to be intricately tied to domestic and geopolitical pressures.

The three distinct coalitions shaping U.S. foreign policy—one focused on engagement, another on competition, and a third somewhere in between—reflect the broader debates within American politics today.

Whoever comes out on top on November 6^th—the implications will extend beyond U.S. borders, affecting global stability and relationships with key allies in Europe and the Netherlands.