Foreign affairs 2017 03-04

/• HOW AMERICA TURNED AGAINST EXPERTS •• MARCH/APRIL 2017 Trump Time F O R E I G NAF FAI R S .C O M

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Volume 96, Number 2 2 TRUMP TIME The Jacksonian Revolt American Populism and the Liberal Order Walter Russell Mead Trump and the Economy 8 How to Jump-Start Growth John Paulson Trump and Russia 12 The Right Way to Manage Relations Eugene Rumer, Richard Sokolsky, and Andrew S. Weiss Trump and China 20 28 Getting to Yes With Beijing COVER: JAMES GILLEARD Susan Shirk Trump and Terrorism U.S. Strategy After ISIS Hal Brands and Peter Feaver Trump and the Holy Land 37 First, Do No Harm Dana H. Allin and Steven N. Simon March/April 2017

An ns ghtful Publ shed by SETA Foundat on reference for Ed ted by Muh tt n Ataman 18 years RECENT CONTRIBUTORS: CHRISTOPHER LAYNE • BURHANETTİN DURAN • RICHARD JACKSON İBRAHİM KALIN • NORMAN G. FINKELSTEIN • BERİL DEDEOĞLU • PAUL KUBICEK • ALİ AKARCA BASHEER NAFI • FAHRETTİN ALTUN • MALIK MUFTI • MARINA OTTAWAY SUSAN BETH ROTTMANN • FRANCK DÜVELL • MUSTAFA YENEROĞLU • SILVIO FERRARI TIM JACOBY • ATİLLA YAYLA • AZZAM TAMIMI • FUAT KEYMAN • ELENA LAZAROU

Trump and North Korea 46 52 Reviving the Art o the Deal John Delury 60 74 Trump and World Order 83 96 The Return o Self-Help 106 Stewart M. Patrick ESSAYS How America Lost Faith in Expertise And Why That’s a Giant Problem Tom Nichols Asia’s Other Revisionist Power Why U.S. Grand Strategy Unnerves China Jennifer Lind China’s Great Awakening How the People’s Republic Got Religion Ian Johnson How to Hunt a Lone Wolf Countering Terrorists Who Act on Their Own Daniel Byman The Dignity Deficit Reclaiming Americans’ Sense o Purpose Arthur C. Brooks ON FOREIGNAFFAIRS.COM Dmitri Trenin on Andrea Kendall-Taylor Jennifer Harris on Russia’s changing and Erica Frantz on how what to expect from Rex relationship with Europe. democracies crumble. Tillerson. March/April 2017

ASIAN VIEWS ON AMERICA’S ROLE IN ASIA The Future of the Rebalance STRATEGIC RECOMMENDATIONS FOR THE INCOMING U.S. PRESIDENT ON FOREIGN POLICY TOWARDS ASIA Find out what leading experts are advising the incoming Trump administration on free trade and investment, the rise of China, territorial disputes, nuclear proliferation, the Korean peninsula, and America’s presence in Afghanistan. READ IT HERE: asiafoundation.org

The Prisoner Dilemma 118 130 Ending America’s Incarceration Epidemic 140 Holly Harris 150 High Stakes 157 164 The Future o U.S. Drug Policy 167 Mark A. R. Kleiman An Internet Whole and Free Why Washington Was Right to Give Up Control Kal Raustiala REVIEWS & RESPONSES Destination: Europe Managing the Migrant Crisis Elizabeth Collett The Renminbi Goes Global The Meaning o China’s Money Barry Eichengreen O Brotherhood, Where Art Thou? Debating Sisi’s Strategy Ahmed Abu Zeid; Steven A. Cook Recent Books “Foreign A airs . . . will tolerate wide di erences of opinion. Its articles will not represent any consensus of beliefs. What is demanded of them is that they shall be competent and well informed, representing honest opinions seriously held and convincingly expressed. . . . It does not accept responsibility for the views in any articles, signed or unsigned, which appear in its pages. What it does accept is the responsibility for giving them a chance to appear.” Archibald Cary Coolidge, Founding Editor Volume 1, Number 1 • September 1922 March/April 2017

March/April 2017 · Volume 96, Number 2 Published by the Council on Foreign Relations Editor, Peter G. Peterson Chair Managing Editor ,, Deputy Managing Editors , Deputy Web Editors , - Sta Editors , - Assistant Editors Copy Chie Production Manager Contributing Artist Business Administrator Editorial Assistant Book Reviewers , , . ,. , , ,, , . , . Interim Publisher Senior Product Manager Associate Director, Business Operations Associate Director, Marketing Advertising Director Senior Manager, Advertising Accounts and Operations Senior Manager, Events and Business Development Events and Marketing Associate Publishing Assistant Special Assistant to the Publisher Director, Web Management and Development . Digital Analytics Manager Website and Mobile Operations Circulation Services ,, Media Relations Board of Advisers ., . , , , , Chair , , . , , . , , ., . , ., . ., ., ., ., ., : Foreign A airs ForeignA airs.com/services 58 E. 68th Street, New York, NY 10065 : : Call Edward Walsh at 212-434-9527 or visit 800-829-5539 U.S./Canada www.foreigna airs.com/advertising 813-910-3608 All other countries : ForeignA airs.com : service@ForeignA airs.customersvc.com : ForeignA airs.com/newsletters : P.O. Box 60001, Tampa, FL, 33662-0001 : ForeignA airs.com/video : Facebook.com/ForeignA airs : The contents o Foreign A airs are copyrighted. No part o the magazine may be reproduced, hosted or distributed in any form or by any means without prior written permission from Foreign A airs. To obtain permission, visit ForeignA airs.com/about-us Foreign A airs is a member o the Alliance for Audited Media and the Association o Magazine Media. GST Number 127686483RT Canada Post Customer #4015177 Publication #40035310

CONTRIBUTORS One o the United States’ most successful investors, JOHN PAULSON made $15 billion betting against subprime mortgages before the housing market collapsed in 2007. He is also a noted philanthropist: in 2015, he gave Harvard $400 million to support its engineering school—the largest gift the university had ever received. Paulson was one o the rst people on Wall Street to support Donald Trump’s presidential campaign, and in “Trump and the Economy” (page 8), he explains how the administration plans to usher in a new era o American prosperity. SUSAN SHIRK rst visited China in 1971 as part o a group o graduate students opposing the Vietnam War. Since then, she has become one o the world’s top experts on U.S.- Chinese relations. In 1993, she founded the Northeast Asia Cooperation Dialogue, a forum for o cials and academics, which she continues to lead, and under U.S. President Bill Clinton, she served as deputy assistant secretary o state for East Asian and Paci c a airs. In “Trump and China” (page 20), Shirk, now a professor at the University o California, San Diego, argues that the United States should retain its position on Taiwan but stand up to Chinese aggression. In more than 25 years in academia and government, TOM NICHOLS has observed Americans’ declining trust in professionals rsthand. After working as an aide in the Massachusetts House o Representatives and then the U.S. Senate, he taught international relations and Russian a airs at Georgetown University, Dartmouth College, and Harvard Extension School—along the way managing to become a ve-time Jeopardy! champion. Now a professor at the U.S. Naval War College, in “How America Lost Faith in Expertise” (page 60), he makes the case for professionalism. HOLLY HARRIS began her legal career as a sta attorney for the Commonwealth o Kentucky. She went on to work as general counsel for the state’s Republican Party and then as chie o sta at the Kentucky Department o Agriculture, where she won a landmark case allowing the state to revive its hemp industry. In 2015, she became the executive director o the U.S. Justice Action Network, a bipartisan organiza- tion focused on criminal justice reform. In “The Prisoner Dilemma” (page 118), she explains how the federal govern- ment can lower crime and save money.

Return to Table of Contents TRUMP TIME After the most unusual election picture further, often espousing posi- in modern U.S. history came tions di erent from those o Trump, the most unusual transition, to one another, and Republicans in be followed, surely, by the most unusual Congress. How all o this can be forged presidency. As David Bowie might say, into a coherent and e ective foreign it is time to turn and face the strange. policy is unclear, and the new adminis- tration’s attempts to do so will be Global elites need to recognize that fascinating to watch. the masses that they spit on, as they try to change their worlds, are immune Trump’s central economic priority to their consultations—they’re quite will be increasing the rate o growth, aware what they’re going through. and the hedge fund manager John Walter Russell Mead’s article in our Paulson, an adviser to his campaign, lead package traces the Jacksonian explains how the administration will go revolt that powered Donald Trump’s about doing that. Other articles in the stunning victory, focusing in particular package explore the challenges the on his voters’ defense o a community Trump team will face in its dealings with they perceived to be under attack from Russia, China, North Korea, the Middle above and below. Arthur Brooks’ lament East, and terrorism. Stewart Patrick, for Americans’ lost sense o dignity later in the issue adds another side to nally, notes the likely adverse conse- the same story. quences for international order should Trump stick to his most consistently Bubble-wrapped cosmopolitans expressed positions on pretty much all clearly need to broaden their perspec- these issues. tives and engage the full reality o their fellow citizens’ lives. But so, too, do As always, the authors o these and angry populists—especially those who our other articles are worth listening to ascend to political power. It’s one thing because they know what they’re talking to score points by bashing the estab- about. These days, few seem to care lishment during the heat o a cam- about such things, with the spirit o paign; it’s another to do so once you the age best captured by Brexit sup- are in charge o that same establish- porter Michael Gove’s rebuke to critics ment and responsible for shaping the that “people in this country have had fates o hundreds o millions o people enough o experts.” Those appalled by at home and billions abroad. Gove’s Philistinism will appreciate Tom Nichols’ essay elsewhere in the Trump’s statements on policy during issue, which maps the spread o this the campaign varied dramatically from intellectual epidemic. month to month, sometimes hour to hour—when they were speci c enough —Gideon Rose, Editor to be understood as actual proposals. His cabinet picks have confused the

Not since Franklin Roosevelt’s administration has U.S. foreign policy witnessed debates this fundamental. —Walter Russell Mead The Jacksonian Revolt Trump and Terrorism 28 Walter Russell Mead 2 Hal Brands and Peter Feaver Trump and the Economy Trump and the Holy Land John Paulson 8 Dana H. Allin and Steven N. Simon 37 Trump and Russia Trump and North Korea JAMES GILLEARD Eugene Rumer, Richard Sokolsky, and John Delury 46 52 Andrew S. Weiss 12 Trump and World Order Trump and China Stewart M. Patrick Susan Shirk 20

Return to Table of Contents TRUMP TIME The Jacksonian Union and advance U.S. interests. When Revolt the Soviet Union fell, Hamiltonians responded by doubling down on the American Populism and the creation o a global liberal order, under- Liberal Order stood primarily in economic terms. Walter Russell Mead Wilsonians, meanwhile, also believed that the creation o a global liberal order For the rst time in 70 years, the was a vital U.S. interest, but they con- American people have elected a ceived o it in terms o values rather than president who disparages the poli- economics. Seeing corrupt and authori- cies, ideas, and institutions at the heart tarian regimes abroad as a leading cause o postwar U.S. foreign policy. No one o con ict and violence, Wilsonians knows how the foreign policy o the sought peace through the promotion o Trump administration will take shape, human rights, democratic governance, or how the new president’s priorities and the rule o law. In the later stages and preferences will shift as he encounters o the Cold War, one branch o this the torrent o events and crises ahead. camp, liberal institutionalists, focused on But not since Franklin Roosevelt’s the promotion o international institu- administration has U.S. foreign policy tions and ever-closer global integration, witnessed debates this fundamental. while another branch, neoconservatives, believed that a liberal agenda could best Since World War II, U.S. grand be advanced through Washington’s unilat- strategy has been shaped by two major eral e orts (or in voluntary conjunction schools o thought, both focused on with like-minded partners). achieving a stable international system with the United States at the center. The disputes between and among Hamiltonians believed that it was in the these factions were intense and conse- American interest for the United States quential, but they took place within a to replace the United Kingdom as “the common commitment to a common gyroscope o world order,” in the words project o global order. As that project o President Woodrow Wilson’s adviser came under increasing strain in recent Edward House during World War I, decades, however, the unquestioned grip putting the nancial and security archi- o the globalists on U.S. foreign policy tecture in place for a reviving global thinking began to loosen. More nation- economy after World War II—something alist, less globally minded voices began that would both contain the Soviet to be heard, and a public increasingly disenchanted with what it saw as the WALTER RUSSELL MEAD is James Clarke costly failures the global order-building Chace Professor of Foreign A airs and project began to challenge what the Humanities at Bard College and a Distinguished foreign policy establishment was preach- Scholar at the Hudson Institute. Follow him on ing. The Je ersonian and Jacksonian Twitter @wrmead. schools o thought, prominent before World War II but out o favor during the heyday o the liberal order, have come back with a vengeance. 2

The Jacksonian Revolt My country, ’tis of me: at a Trump rally in Louisville, Kentucky, March 2016 CHRIS BERGIN / REUTERS Je ersonians, including today’s IDENTITY POLITICS BITE BACK so-called realists, argue that reducing the United States’ global pro le would The distinctively American populism reduce the costs and risks o foreign Trump espouses is rooted in the policy. They seek to de ne U.S. interests thought and culture o the country’s narrowly and advance them in the safest and most economical ways. Libertarians rst populist president, Andrew Jack- take this proposition to its limits and son. For Jacksonians—who formed the core o Trump’s passionately supportive nd allies among many on the left who base—the United States is not a politi- oppose interventionism, want to cut cal entity created and de ned by a set military spending, and favor redeploying o intellectual propositions rooted in the government’s e orts and resources the Enlightenment and oriented toward at home. Both Senator Rand Paul o the ful llment o a universal mission. Kentucky and Senator Ted Cruz o Texas Rather, it is the nation-state o the seemed to think that they could sur the American people, and its chie business rising tide o Je ersonian thinking during lies at home. Jacksonians see American the Republican presidential primary. exceptionalism not as a function o the But Donald Trump sensed something universal appeal o American ideas, or that his political rivals failed to grasp: even as a function o a unique American that the truly surging force in American vocation to transform the world, but politics wasn’t Je ersonian minimalism. rather as rooted in the country’s singular It was Jacksonian populist nationalism. commitment to the equality and dignity o individual American citizens. The March/April 2017 3

Walter Russell Mead role o the U.S. government, Jacksonians from di erent backgrounds. Jacksonians believe, is to ful ll the country’s destiny worry about the U.S. government being by looking after the physical security taken over by malevolent forces bent on and economic well-being o the Ameri- transforming the United States’ essential can people in their national home—and character. They are not obsessed with to do that while interfering as little as corruption, seeing it as an ineradicable possible with the individual freedom part o politics. But they care deeply that makes the country unique. about what they see as perversion—when politicians try to use the government to Jacksonian populism is only intermit- oppress the people rather than protect tently concerned with foreign policy, and them. And that is what many Jacksonians indeed it is only intermittently engaged came to feel was happening in recent years, with politics more generally. It took a with powerful forces in the American particular combination o forces and elite, including the political establish- trends to mobilize it this election cycle, ments o both major parties, in cahoots and most o those were domestically against them. focused. In seeking to explain the Jackso- nian surge, commentators have looked Many Jacksonians came to believe to factors such as wage stagnation, the that the American establishment was no loss o good jobs for unskilled workers, longer reliably patriotic, with “patriotism” the hollowing out o civic life, a rise in de ned as an instinctive loyalty to the drug use—conditions many associate well-being and values o Jacksonian with life in blighted inner cities that America. And they were not wholly have spread across much o the country. wrong, by their lights. Many Americans But this is a partial and incomplete view. with cosmopolitan sympathies see their Identity and culture have historically main ethical imperative as working for played a major role in American politics, the betterment o humanity in general. and 2016 was no exception. Jacksonian Jacksonians locate their moral commu- America felt itsel to be under siege, nity closer to home, in fellow citizens with its values under attack and its future who share a common national bond. I under threat. Trump— awed as many the cosmopolitans see Jacksonians as Jacksonians themselves believed him to backward and chauvinistic, Jacksonians be—seemed the only candidate willing return the favor by seeing the cosmopoli- to help ght for its survival. tan elite as near treasonous—people who think it is morally questionable to put For Jacksonian America, certain their own country, and its citizens, rst. events galvanize intense interest and political engagement, however brief. Jacksonian distrust o elite patriotism One o these is war; when an enemy has been increased by the country’s attacks, Jacksonians spring to the selective embrace o identity politics country’s defense. The most powerful in recent decades. The contemporary driver o Jacksonian political engage- American scene is lled with civic, ment in domestic politics, similarly, is political, and academic movements the perception that Jacksonians are celebrating various ethnic, racial, gender, being attacked by internal enemies, and religious identities. Elites have such as an elite cabal or immigrants gradually welcomed demands for cultural 4

The Jacksonian Revolt recognition by African Americans, so-called alt-right is at least partly rooted in this dynamic. Hispanics, women, the community, The emergence o the Black Lives Native Americans, Muslim Americans. Matter movement and the scattered, sometimes violent expressions o anti- Yet the situation is more complex for most police sentiment displayed in recent years compounded the Jacksonians’ Jacksonians, who don’t see themselves as sense o cultural alienation, and again, not simply because o race. Jacksonians tting neatly into any o those categories. instinctively support the police, just as they instinctively support the military. Whites who organize around their Those on the frontlines protecting society sometimes make mistakes, in this view, speci c European ethnic roots can do so but mistakes are inevitable in the heat o combat, or in the face o crime. It is with little pushback; Italian Americans unfair and even immoral, many Jackso- nians believe, to ask soldiers or police and Irish Americans, for example, have o cers to put their lives on the line and face great risks and stress, only to have long and storied traditions in the parade their choices second-guessed by armchair critics. Protests that many Americans saw o American identity groups. But increas- as a quest for justice, therefore, often struck Jacksonians as attacks on law ingly, those older ethnic identities have enforcement and public order. faded, and there are taboos against claim- Gun control and immigration were two other issues that crystallized the ing a generic European American or perception among many voters that the political establishments o both parties white identity. Many white Americans had grown hostile to core national values. Non-Jacksonians often nd it di cult thus nd themselves in a society that to grasp the depth o the feelings these issues stir up and how proposals for gun talks constantly about the importance control and immigration reform rein- force suspicions about elite control and o identity, that values ethnic authentic- cosmopolitanism. ity, that o ers economic bene ts and The right to bear arms plays a unique and hallowed role in Jacksonian political social advantages based on identity— culture, and many Jacksonians consider the Second Amendment to be the most for everybody but them. For Americans important in the Constitution. These Americans see the right o revolution, o mixed European background or for enshrined in the Declaration o Indepen- dence, as the last resort o a free people the millions who think o themselves to defend themselves against tyranny— simply as American, there are few acceptable ways to celebrate or even connect with one’s heritage. There are many reasons for this, rooted in a complex process o intellec- tual re ection over U.S. history, but the reasons don’t necessarily make intuitive sense to unemployed former factory workers and their families. The growing resistance among many white voters to what they call “political correctness” and a growing willingness to articulate their own sense o group identity can some- times re ect racism, but they need not always do so. People constantly told that they are racist for thinking in positive terms about what they see as their iden- tity, however, may decide that racist is what they are, and that they might as well make the best o it. The rise o the March/April 2017 5

Walter Russell Mead and see that right as unenforceable In short, in November, many Ameri- without the possibility o bearing arms. cans voted their lack o con dence—not They regard a family’s right to protect in a particular party but in the govern- itsel without reliance on the state, mean- ing classes more generally and their while, as not just a hypothetical ideal associated global cosmopolitan ideology. but a potential practical necessity—and Many Trump voters were less concerned something that elites don’t care about with pushing a speci c program than or even actively oppose. (Jacksonians with stopping what appeared to be the have become increasingly concerned inexorable movement o their country that Democrats and centrist Republi- toward catastrophe. cans will try to disarm them, which is one reason why mass shootings and THE ROAD AHEAD subsequent calls for gun control spur spikes in gun sales, even as crime more What all o this means for U.S. foreign generally has fallen.) policy remains to be seen. Many previ- ous presidents have had to revise their As for immigration, here, too, most ideas substantially after reaching the non-Jacksonians misread the source Oval O ce; Trump may be no excep- and nature o Jacksonian concern. There tion. Nor is it clear just what the results has been much discussion about the would be o trying to put his unorthodox impact o immigration on the wages policies into practice. (Jacksonians can o low-skilled workers and some talk become disappointed with failure and about xenophobia and Islamophobia. turn away from even former heroes they But Jacksonians in 2016 saw immigra- once embraced; this happened to President tion as part o a deliberate and con- George W. Bush, and it could happen scious attempt to marginalize them in to Trump, too.) their own country. Hopeful talk among Democrats about an “emerging Demo- At the moment, Jacksonians are cratic majority” based on a secular skeptical about the United States’ policy decline in the percentage o the voting o global engagement and liberal order population that is white was heard in building—but more from a lack o trust Jacksonian America as support for a in the people shaping foreign policy than deliberate transformation o American from a desire for a speci c alternative demographics. When Jacksonians hear vision. They oppose recent trade agree- elites’ strong support for high levels o ments not because they understand the immigration and their seeming lack o details and consequences o those ex- concern about illegal immigration, they tremely complex agreements’ terms but do not immediately think o their pocket- because they have come to believe that books. They see an elite out to banish the negotiators o those agreements did them from power—politically, cultur- not necessarily have the United States’ ally, demographically. The recent spate interests at heart. Most Jacksonians are o dramatic random terrorist attacks, not foreign policy experts and do not ever expect to become experts. For them, nally, fused the immigration and leadership is necessarily a matter o personal security issues into a single trust. I they believe in a leader or a toxic whole. political movement, they are prepared 6

The Jacksonian Revolt to accept policies that seem counter- social peace, and that the next stage o intuitive and di cult. capitalist development will challenge the very foundations o both the global liberal They no longer have such trust in order and many o its national pillars. the American establishment, and unless and until it can be restored, they will In this new world disorder, the keep Washington on a short leash. To power o identity politics can no longer paraphrase what the neoconservative be denied. Western elites believed that intellectual Irving Kristol wrote about in the twenty- rst century, cosmopoli- Senator Joseph McCarthy in 1952, there tanism and globalism would triumph is one thing that Jacksonians know about over atavism and tribal loyalties. They Trump—that he is unequivocally on failed to understand the deep roots o their side. About their country’s elites, identity politics in the human psyche they feel they know no such thing. And and the necessity for those roots to nd their concerns are not all illegitimate, political expression in both foreign and for the United States’ global order- domestic policy arenas. And they failed building project is hardly ourishing. to understand that the very forces o economic and social development that Over the past quarter century, cosmopolitanism and globalization Western policymakers became infatuated fostered would generate turbulence and with some dangerously oversimpli ed eventually resistance, as Gemeinschaft ideas. They believed capitalism had been (community) fought back against the tamed and would no longer generate onrushing Gesellschaft (market society), economic, social, or political upheavals. in the classic terms sociologists favored They felt that illiberal ideologies and a century ago. political emotions had been left in the historical dustbin and were believed only The challenge for international by “bitter” losers—people who “cling politics in the days ahead is therefore to guns or religion or antipathy toward less to complete the task o liberal world people who aren’t like them . . . as a way order building along conventional lines to explain their frustrations,” as Barack than to nd a way to stop the liberal Obama famously put it in 2008. Time order’s erosion and reground the global and the normal processes o history system on a more sustainable basis. would solve the problem; constructing International order needs to rest not a liberal world order was simply a just on elite consensus and balances o matter o working out the details. power and policy but also on the free choices o national communities— Given such views, many recent communities that need to feel protected developments—from the 9/11 attacks from the outside world as much as they and the war on terrorism to the nan- want to bene t from engaging with it.∂ cial crisis to the recent surge o angry nationalist populism on both sides o the Atlantic—came as a rude surprise. It is increasingly clear that globalization and automation have helped break up the socioeconomic model that under- girded postwar prosperity and domestic March/April 2017 7

Return to Table of Contents TRUMP TIME Trump and the In addition to a high domestic Economy corporate tax rate, the United States also imposes a 35 percent tax on repatriated How to Jump-Start Growth foreign earnings (with a credit for any foreign taxes paid). This has led U.S. John Paulson companies to locate their manufacturing operations abroad and to keep their T he central economic goal o foreign earnings abroad, as well, rather Donald Trump’s administration than bring them back to the United will be to boost U.S. economic States. Few other countries have such a growth. Steven Mnuchin, Trump’s nomi- policy, and it is one reason why U.S. nee for treasury secretary, has said that companies have parked an estimated the administration’s objective is to raise $2.5 trillion overseas. the rate o growth to three to four percent, doubling the rate achieved over This unfavorable tax structure, more- the last decade. This will be accomplished over, has caused many U.S. companies by establishing a globally competitive to behave oddly. Apple, for instance, corporate tax rate, adopting a territorial borrows money in the United States, corporate tax system, reducing excessive even though it has over $200 billion in regulation, boosting domestic energy cash reserves abroad (kept there in order production, and introducing better to avoid paying the taxes that repatriation trade policies. would generate). The chip maker Qual- comm recently announced a $39 billion The United States has the highest acquisition o the Dutch company corporate tax rate o any country in the Semiconductors—a move that will help Organization for Economic Coopera- it avoid paying billions in U.S. taxes, tion and Development. At 35 percent, according to Americans for Tax Fairness. the U.S. rate far exceeds the rates o the And scores o U.S. companies have United Kingdom (20 percent), Germany actually “inverted,” turning themselves (16 percent), Canada (15 percent), Ireland into nominally foreign companies so as (13 percent), and many other countries. to take advantage o such rms’ ability This high rate discourages investment, to bring cash earned abroad into the and reducing it will encourage it. The United States tax free. Trump administration plans to lower the corporate rate to 15 percent, eliminat- To reverse this trend and encourage ing the disadvantage for U.S. companies, U.S. companies to bring their foreign making the United States a more attrac- cash home for investment, Trump has tive destination for investment, and proposed reducing the tax on repatri- creating jobs for American workers. ated earnings from 35 percent to ten percent. The move has broad support JOHN PAULSON is President of Paulson & Co. among Republicans in Congress, and He served as an economic adviser to Donald some combination o a lower corporate Trump during the presidential campaign. tax rate and a lower tax on repatriated funds will likely be passed into law. Another factor holding the U.S. economy back has been excessive 8

Trump and the Economy Man with a plan: Trump at a Carrier plant in Indianapolis, December 2016 CHRIS BERGIN / REUTERS regulation. Unnecessary regulation makes advisory fees on compliance-related it harder for companies to succeed and issues. In 2014, Citibank had 30,000 results in increased costs, lower invest- employees working on compliance and ment, and restricted growth. This has regulatory issues, up by 33 percent from been especially true o the nancial three years earlier. In the same year, J.P. sector in recent years, as reactions to the Morgan increased its risk-control sta by 33 percent, in addition to using thousands nancial crisis overshot the mark. Not o outside consultants. all regulation is pernicious, o course. Higher capital requirements and the The obstacles to growth caused by elimination o o -balance-sheet nanc- excessive and poorly conceived regulation ing, for example, have helped strengthen are part o the reason the current eco- the domestic and global nancial systems. nomic recovery has been so slow com- But many o the nancial regulations in pared with its predecessors. Limitations the 2010 Dodd-Frank Act have placed on credit have put a damper on new heavy burdens o compliance on compa- home construction, consumer spending, nies and impeded lending. and business investment. The cost o complying with cumber- The mortgage sector o ers an example some new regulations has been staggering. o the complexity, redundancies, and For example, from 2011 to 2015 alone, wastefulness o ill-considered govern- the ten largest U.S. banks collectively ment intervention. Regulators have paid $52.5 billion in consulting and been ghting one another about who March/April 2017 9

John Paulson has authority over the area, with each the region and o ers a model to follow. regulator imposing its own layer o When asked why businesses invest there, often con icting regulations. The result executives point to the business-friendly has been an almost total halt in private environment. And even my own rm, mortgage securitizations, which have after reviewing many other locations fallen by 99 percent from their 2005 peak in Europe, chose to locate its o shore o over $1 trillion in annual issuance. This services operations in Dublin for the near freeze has deprived a huge segment same reason. o Americans o mortgage nancing. Overregulation and the collapse o the BEYOND TAXES AND REGULATION private mortgage securitization market have restrained the recovery in new home The United States has abundant energy construction—which helps explain why, resources and the technology to exploit although new home construction has them in previously unimaginable ways. risen from its recent lows, it is still far A barrage o regulations, however, have below its previous peak and below the made it di cult to reap the full bene ts average level o housing required. o this situation. The Trump administra- tion plans to lift restrictions and stream- To lead the e ort to break up the line the permitting process in order to regulatory clog, Trump has appointed facilitate growth in energy production two highly capable executives. Mnuchin and infrastructure. is the former o OneWest Bank, and Gary Cohn, Trump’s choice to head A good example o such barriers to the National Economic Council, is the growth can be found in the slow rate o former president o Goldman Sachs. approval for export terminals for lique- Both have extensive knowledge o the negative e ects that excessive regula- ed natural gas. American rms have tion has on the availability o credit and developed technology that allows them on growth. And beyond nance, other to extract gas from previously unattain- sectors ripe for regulatory reform include able sources at extremely low prices. health care, labor, and energy. Unless the gas is lique ed, however, it cannot be exported and remains trapped A competitive corporate tax structure in the United States. The construction and reduced regulation will lead to o lique ed natural gas export terminals higher economic growth. There are would allow it to be sold abroad. This scores o real-life examples that show would encourage still more development the impact o tax and regulatory policies at home, creating more jobs, reducing on growth, and some patterns are clear. the trade de cit, and spurring growth. Generally, countries with high tax rates Unfortunately, such construction has and high regulation (such as France and been delayed and restricted because o Italy) achieve lower growth, while those the vast number o approvals required with low tax rates and low regulation from agencies that include the Environ- (such as Ireland) achieve higher growth. mental Protection Agency, the Federal Energy Regulatory Commission, the With the second-lowest corporate Department o Energy, and many others. tax rate in Europe and light regulation, Ireland has the highest growth rate in A nal component o the Trump administration’s economic plan will be 10

Trump and the Economy the renegotiation o trade deals so as $1.6 billion project in Mexico and to protect and expand U.S. exports. instead expand its operations in Trump has said that he is not opposed Michigan, citing “the more positive to trade in general—in fact, he strongly U.S. business environment” that he favors it—but he does oppose unfair expected under Trump. trade. And dealings with China are a good example o where improvements Competitive corporate taxes, easier can be made. repatriation o foreign earnings, a less burdensome regulatory environment, In 2015, the United States imported expanded domestic energy production, $482 billion worth o goods from China and trade deals that give U.S. compa- while exporting only $116 billion, lead- nies a fair chance to compete—together ing to a trade de cit o $366 billion. these will create jobs, accelerate growth, Chinese rms have almost unrestricted and lead to a new era o American access to U.S. markets, yet U.S. rms prosperity.∂ face severe restrictions and roadblocks when trying to do business in China. Putting the commercial relationship on more equal terms, as well as tightening up the enforcement o intellectual prop- erty laws, would help raise U.S. exports and signi cantly reduce the bilateral trade de cit. Making the United States an attrac- tive place for investment, supporting export industries, and improving terms o trade with foreign counterparts will go a long way toward improving the U.S. trade balance, boosting U.S. growth in the process. Disregarding the media’s gloom and doom, U.S. investors and businesses have responded more favorably to the incoming administration’s economic plans than most expected, with the S&P 500 rising by more than seven percent between the election and the end o the year and nancial services rallying 19 percent. In December, Ray Dalio, chair o the hedge fund Bridge- water Associates, said that Trump’s pro-business outlook could help boost growth. And in January, Mark Fields, the o the Ford Motor Company, announced that Ford would cancel a March/April 2017 11

Return to Table of Contents TRUMP TIME Trump and Russia In Ukraine, Moscow sees itsel as merely pushing back against the relentless The Right Way to Manage geopolitical expansion o the United Relations States, , and the . They point out that Washington and its allies have Eugene Rumer, Richard deployed troops right up to the Russian Sokolsky, and Andrew S. Weiss border. They claim that the United States has repeatedly intervened in Russian Relations between the United domestic politics and contend, falsely, States and Russia are broken, that former U.S. Secretary o State and each side has a vastly di er- Hillary Clinton even incited antigovern- ent assessment o what went wrong. ment protests in Moscow in December U.S. o cials point to the Kremlin’s 2011. And they maintain that the United annexation o Crimea and the bloody States is meddling in Syria to overthrow covert war Russian forces are waging in a legitimate government, in just the eastern Ukraine. They note the Kremlin’s latest example o its unilateral attempts suppression o civil society at home, its to topple regimes it doesn’t like. reckless brandishing o nuclear weapons, and its military provocations toward The gap between these two narratives U.S. allies and partners in Europe. is dangerous. Not only do heightened They highlight Russia’s military inter- tensions raise the risk o a military accident vention in Syria aimed at propping up or confrontation in Europe and beyond; Bashar al-Assad’s brutal dictatorship. they are also largely a re ection o deeply And they call attention to an unprec- entrenched resentments within the edented attempt through a Kremlin- Russian national security establishment backed hacking and disinformation that are likely to persist well beyond the campaign to interfere with the U.S. Putin era. The di erences between the presidential election last November. United States and Russia run deep, and they are not amenable to easy solutions. Russian President Vladimir Putin and his circle view things di erently. The challenge facing the Trump administration is to skillfully manage, EUGENE RUMER is a Senior Fellow in and rather than permanently resolve, these Director of the Russia and Eurasia Program at tensions with Moscow. Trying to appease the Carnegie Endowment for International Peace. Putin, perhaps by making unilateral concessions, would only convince him RICHARD SOKOLSKY is a Senior Fellow in that he is winning and encourage him the Carnegie Endowment’s Russia and Eurasia to continue wrong-footing the United Program. States and the West. But a more confron- tational approach would risk generating ANDREW S. WEISS is Vice President for a provocative and dangerous response Studies at the Carnegie Endowment. from Russia. So Washington will need to chart a middle path. That means both This article draws from a longer study they seeking ways to cooperate with Moscow undertook for a joint task force of the Carnegie and pushing back against it without Endowment for International Peace and the sleepwalking into a collision. Chicago Council on Global A airs. 12

Trump and Russia O course, that advice presupposes a Following Putin’s return to the presi- U.S. administration that views Russia dency in 2012, the regime has retooled the the same way previous ones have: as a sources o its legitimacy. It has fostered problematic yet important partner on a fortress mentality, mobilizing the public discrete issues that also poses a signi cant to defend Russia against foreign adver- national security threat. U.S. President saries and mounting an unrelenting search Donald Trump, however, appears eager to for Western-backed fth columnists. The jettison established bipartisan approaches apparent spur-of-the-moment decision to dealing with Moscow. As he wrote to annex Crimea transformed the Russian on Twitter in January, “Having a good domestic political landscape overnight, relationship with Russia is a good thing, propelling Putin to unprecedented levels o not a bad thing. Only ‘stupid’ people, popularity. And in Syria, the Kremlin has or fools, would think that it is bad!” And capitalized on its intervention to high- for months, he mocked the U.S. intel- light Russia’s return to global prominence. ligence community’s warnings about Russian cyberattacks aimed at interfering Unfortunately, tighter economic with the U.S. democratic process and constraints are not likely to dissuade Putin repeatedly praised Putin’s leadership. from engaging in future foreign policy adventures. The collapse o oil prices that Such antics suggest that Trump may began in 2014 hit the Russian economy attempt an abrupt reconciliation with hard, as did the sanctions the West applied Russia that would dramatically reverse in response to Russian aggression in the policies o President Barack Obama. Ukraine that same year. Yet Putin has It is hard to overstate the lasting damage shown little restraint in the international that such a move would do to the U.S. arena since. His de ant approach appears relationship with Europe, to the secu- to have strong support from the Russian rity o the continent, and to an already elite, which faithfully rallies to the cause fraying international order. o standing up to the United States and reasserting Russia’s great-power status. PUTIN’S GAME Indeed, Russia has always been Any consideration o U.S. policy toward much more than a mere “regional power,” Russia must start with a recognition o as Obama once dismissed it; the country that country’s manifold weaknesses. The Russian economy may not be “in gures prominently in important issues tatters,” as Obama once remarked, but across the globe, from the Iran nuclear the boom that allowed Putin, during program to the security o the entire his rst two terms in o ce, to deliver transatlantic community. That will not steady increases in prosperity in exchange change. But even i one accepts that for political passivity is a distant mem- Russia is a declining power, history ory. Absent major structural reforms, shows that such states can cause consid- which Putin has refused to undertake erable damage on their way down. And for fear o losing control, the economy i there is one thing that can be said is doomed to “eternal stagnation,” as for certain about Putin, it is that he is Ksenia Yudaeva, a senior Russian central a skilled and opportunistic risk taker bank o cial, put it last year. capable o forcing others to deal with him on his own terms. March/April 2017 13

Eugene Rumer, Richard Sokolsky, and Andrew S. Weiss The United States must also reckon For now, the Kremlin is likely to try with another fundamental characteristic to downplay sources o tension, setting o Russia’s foreign policy: its desire for the stage for friendly initial encounters de facto control over its neighbors’ secu- with the new U.S. president and his team. rity, economic, and political orientation. Assuming Moscow follows that course, Both Democratic and Republican admin- Washington will have to proceed with istrations have long considered this caution as Putin, the consummate deal- unacceptable. Yet it constitutes one o maker, seeks to shape the terms o a the Russian regime’s core requirements new relationship. In negotiating those for security. terms, the Trump administration should adhere to ve overarching principles. Absent an abrupt change in these fundamental realities, it will be hard First, it must make clear that the to signi cantly improve U.S. relations United States’ commitment to defend with Russia. The country’s intervention its allies is absolute and uncondi- in Ukraine has demolished much o tional. To do so, the United States should the post–Cold War security order and, bolster deterrence through an ongoing along with it, any semblance o trust on series o defense improvements and either side. And it would be irresponsible increased military deployments on the for Washington to turn a blind eye to the alliance’s eastern ank. It should also Kremlin’s reliance on hacking, disinfor- ramp up the pressure on fellow mation, and Cold War–style subversion members to spend more on defense. in its e orts to undermine the United States’ international reputation and Second, the United States needs to to meddle in democratic processes in steadfastly uphold the principles en- Europe and beyond. The best course o shrined in the 1975 Helsinki Final Act action is for the United States to stand and the 1990 Charter o Paris for a New Europe—both o which commit Moscow rm when its vital interests are threat- to recognize existing borders and the ened, to expose and counter Moscow’s right o all countries to choose their penchant for irregular tactics, and to own allies. It may be hard to imagine a carefully manage the rivalry that lies at feasible scenario for returning Crimea the heart o the bilateral relationship. to Ukraine, but the annexation remains a agrant violation o international law THE BIG PICTURE that no country should recognize or reward. That means keeping in place In recent years, Russia and the West the U.S. and sanctions that ban have been heading toward something transactions and economic cooperation that looks a lot like a second Cold War. with Russian-occupied Crimea. This confrontation may lack the geo- political and ideological scope o the Third, as Washington reengages with Moscow, it must not run roughshod over rst, but it still carries a high risk o Russia’s neighbors. Appeasing Russia on actual con ict. The close encounters Ukraine or caving in to its demand for a that aircraft and warships have had sphere o in uence in its neighborhood with Russian jets are no accident; they would set a terrible precedent and under- are part o a deliberate Kremlin strat- mine U.S. standing in the world. The egy to intimidate Moscow’s adversaries. 14

Trump and Russia Ally or adversary? Putin delivering his New Year’s address in Moscow, December 31, 2016 SPUTNIK PHOTO AGENCY / REUTERS inherent fragility o Russia’s neighbors alternative to the Kremlin’s top-down will create many openings for future approach to governance. Russian meddling, so the United States and its allies will need to remain vigilant Fifth, as the United States attempts and become more deeply engaged in to support democracy in Russia and such a complex region. other former Soviet states, it should make a sober-minded assessment o local Fourth, Washington and its partners demand for it and the best use o limited in the should commit themselves resources. Russia’s democratic de cit will to supporting Ukrainian political and hinder better relations with the West for economic reform through skillful diplo- as long as it persists. The same problem macy and a generous ow o resources. will continue to complicate U.S. ties with It will probably take a generation or many o Russia’s neighbors. But too often, longer to turn this pivotal country into Washington has overestimated its ability a prosperous, European-style state, not to transform these societies into func- least because o Russia’s undisguised tioning democracies. desire for Ukraine’s reformist experi- ment to fail. I Ukraine receives steady In applying these principles, the Western support based on clear and United States needs to remain mindful achievable conditions, its success will o the risks o overreaching. That will have a lasting positive impact on Russia’s mean making sharp distinctions between trajectory by demonstrating a viable what is essential, what is desirable, and what is realistic. March/April 2017 15

Eugene Rumer, Richard Sokolsky, and Andrew S. Weiss NEEDS AND WANTS concerted response to Russia’s meddling would send precisely the wrong signal, Improved communication belongs in the inviting further Kremlin exploits in rst category. In response to Russia’s France and Germany, which are holding their own elections this year. In the moves in Ukraine, the Obama adminis- meantime, the U.S. government should tration suspended most routine channels explore whether it can work with major o communication and cooperation with actors in the cyber-realm, such as China the Russian government and encouraged and Russia, to develop new rules o the U.S. allies to follow suit. As the crisis road that might limit some o the most has dragged on, it has become harder destabilizing kinds o o ensive operations. to address di erences, avoid misunder- standings, and identify points o coop- Second, the Trump administration eration in the absence o regular inter- should ensure that military-to-military actions at various levels. The Trump channels are open and productive. Russia’s administration should entertain the provocations carry the very real risk o possibility o resuming a wide-ranging a military confrontation arising from a dialogue, even though the Russians miscalculation. Washington should may well prove as unwilling to engage prioritize getting Russia to respect in a serious give-and-take as they did previously agreed-on codes o conduct during the George W. Bush and Obama for peacetime military operations, how- administrations, or may choose to use ever di cult that might be. The situation the talks solely to score political points. is especially dangerous in the skies over But even i the Kremlin isn’t ready to Syria, where Russian pilots frequently engage forthrightly, the Trump admin- istration should put four essential priori- out a set o procedures agreed to in 2015 ties above all else in its early discussions to avoid in-air collisions with U.S. and with the Russian government. other jets. First, the Trump administration Third, in Ukraine, Trump should should respond to Russian meddling focus on using diplomatic tools to in the U.S. presidential election in ways de-escalate the military side o the that get the Russians’ attention. As a con ict and breathe new life into the parting shot, Obama imposed sanctions Minsk accords, a loose framework o on Russian entities involved in the hacking security and political steps that both and ejected 35 Russian diplomats from sides have refused to fully embrace. The the United States. Yet much more needs existing package o U.S. and sanc- to be done. A carefully calibrated covert tions represents an important source o response in cyberspace would send the leverage over Moscow, and so it should message that the United States is pre- not be reversed or scaled back in the pared to pay back the Kremlin and its absence o a major change in Russian proxies for their unacceptable actions. behavior in Ukraine. At the same time, Trump should also work to protect the the United States and its allies must large swaths o government and private- work to keep Ukraine on a reformist sector networks and infrastructure in path by imposing strict conditions on the United States that remain highly future aid disbursements to encourage vulnerable to cyberattacks. The lack o a its government to ght high-level 16



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Trump and Russia corruption and respond to the needs o Nuclear Forces Treaty may soon fall the Ukrainian people. apart, and the New treaty is due The fourth and nal priority for the Trump administration is to remain to expire in 2021. Neither Russia nor realistic about the prospects o promot- ing transformational change in Russia. the United States is ready for a new arms As the last 25 years have shown again and again, Russia resists outside e orts control agreement, primarily because o at modernization. In other words, the United States should not treat Russia con icting agendas. Moscow wants to as a project for political, social, or economic engineering. constrain U.S. deployments o missile Then there are goals that, although not defense systems and high-tech conven- essential, remain desirable. In this category should go issues on which Washington tional weapons, while Washington wants and Moscow have a good track record o cooperation thanks to overlapping, to further reduce the number o Russian i not identical, interests. These include cooperation on preventing nuclear prolif- strategic and tactical nuclear weapons. eration, reducing the threat o nuclear terrorism, and protecting the fragile But neither would be served by aban- environment in the Arctic. Because these issues are largely technical in nature, doning arms control completely. At a they do not require the time and atten- tion o senior o cials. A great deal o minimum, both would bene t from progress can be made at lower levels. more conversations about their force On more ambitious arms control e orts, however, progress will require structures and nuclear doctrines, with high-level decisions that neither side is eager to make. Such is the case an eye toward ensuring stability, espe- with resolving the impasse over the Intermediate-Range Nuclear Forces cially in crises. Treaty, which the United States claims Russia has violated, and securing further FACT AND FANTASY reductions in the size o both countries’ strategic and tactical nuclear arsenals. O course, Washington’s ability to achieve what is essential and what is desirable Even so, the Trump administration will be limited by what is realistic. In a should keep the door open to further perfect world, Trump would focus on progress on arms control. The U.S.- keeping relations from deteriorating Russian arms control edi ce is in danger further. Instead, he and his team appear o collapsing: the Anti-Ballistic Missile to be fanning expectations o a big Treaty and the Treaty on Conventional breakthrough and a grand bargain. Armed Forces in Europe are no longer in force, the Intermediate-Range Indeed, much o what Trump says he believes about Russia appears unrealis- tic, to put it mildly. For starters, he has made the mystifying choice to ridicule the U.S. intelligence community’s nding that it was Russia that was behind the hacking o e-mails from the Democratic National Committee and the Clinton campaign. I Trump’s and his advisers’ statements are to be believed, even a brazen attempt originating at the highest levels o the Russian government to undermine Americans’ con dence in their country’s democratic process is less important than the poor cyber- security practices o the Democratic March/April 2017 17

Eugene Rumer, Richard Sokolsky, and Andrew S. Weiss National Committee and Clinton’s no interest in beating back in Syria, inner circle. choosing instead to attack the main opposition forces arrayed against the Trump appears to hold an equally Assad regime. Russia’s and Iran’s sup- unrealistic view o the Ukrainian crisis, port for Assad may have fundamentally saying o Putin during the campaign, changed the course o the civil war in “He’s not going to go into Ukraine, all Syria, but their crude methods and right?”—even as thousands o Russian disregard for civilian casualties have troops were already there. When asked probably only emboldened the radical by The New York Times on the eve o jihadists. Help from the Russian military the election about Putin’s behavior in would be a mixed blessing, at best, for Ukraine and Syria and the ongoing the U.S.-led coalition against , given crackdown against Putin’s political the pervasive lack o trust on both sides opponents, Michael Flynn, Trump’s and the very real risk that sensitive intel- pick for national security adviser, called ligence and targeting information would these issues “besides the point.” He added, “We can’t do what we want to nd its way into the hands o Moscow’s do unless we work with Russia, period.” allies in Damascus and Tehran. But as Trump will likely discover, Trump has also expressed interest in reality has a way o interfering with developing stronger economic ties with attempts to transform relations with Russia as a foundation for improved Moscow. Every U.S. president from diplomatic relations, at least according Bill Clinton on has entered o ce to the Kremlin’s summary o Putin’s attempting to do precisely that, and congratulatory call to Trump after the each has seen his e ort fail. Clinton’s election. Here, too, he is likely to be endeavor to ease tensions fell apart disappointed. Clinton, Bush, and Obama over expansion, the Balkan wars, all placed high hopes on trade as an and Russian intervention in Chechnya; engine o better relations with Russia. George W. Bush’s collapsed after the All were frustrated by the fact that the 2008 Russian-Georgian war; and Obama’s two countries are, for the most part, not ran aground in Ukraine. Each adminis- natural trading partners, to say nothing tration encountered the same obstacles: o the e ects o Russia’s crony capital- Russia’s transactional approach to foreign ism, weak rule o law, and predatory policy, its claim to a sphere o in uence, investment climate. its deep insecurities about a yawning power gap between it and the United PROCEED WITH CAUTION States, and its opposition to what it saw as Western encroachment. Finding common Trump inherited a ruptured U.S.-Russian ground on these issues will be di cult. relationship, the culmination o more than 25 years o alternating hopes and It appears that at the core o Trump’s disappointments. As both a candidate vision for improved relations is a coalition and president-elect, he repeatedly called with Russia against the Islamic State— for a new approach. “Why not get along to, in his words, “knock the hell out o with Russia?” he has asked. The answer is that at the heart o the breakdown lie .” Yet such cooperation is unlikely to disagreements over issues that each materialize. The Russians have shown 18

Trump and Russia country views as fundamental to its challenged Soviet-backed regimes and interests. They cannot be easily over- groups in Eastern Europe, Asia, Africa, come with the passage o time or a sum- and Latin America at the same time as mit meeting or two. Thus, the challenge it signed arms control agreements for the new administration is to manage with Moscow. this relationship skillfully and to keep it from getting worse. Likewise, the Trump administration can, for example, counter Russian Should Trump instead attempt to aggression in Ukraine while looking for cozy up to Moscow, the most likely ways to cooperate on e orts to keep outcome would be that Putin would weapons o mass destruction out o the pocket Washington’s unilateral conces- wrong hands. Such an approach has a sions and pursue new adventures or far greater chance o success than pure make demands in other areas. The confrontation or pure concession. resulting damage to U.S. in uence Russian leaders have long expressed and credibility in Europe and beyond their preference for realpolitik; they would prove considerable. Already, will respect a country that stays true the rules-based international order to its principles, knows its interests, that the United States has upheld and understands power.∂ since the end o World War II is in danger o unraveling, and there is mounting concern throughout Europe, Asia, and beyond that Trump does not consider it worth preserving. What’s more, there’s no telling how Trump will respond i and when he has his rst showdown with Putin, although his behavior toward those who cross him suggests that things would not end well. Reduced tensions with Russia would no doubt help further many o the United States’ political and security priorities. But policymakers must keep in mind that the abiding goal should be to advance U.S. interests, support U.S. allies across the world, and uphold U.S. principles—not to improve relations with Russia for their own sake. Indeed, it’s possible to stand up for American interests and principles while pursuing a less volatile relationship with Russia. The Nixon administration sowed mines in a harbor in North Vietnam, a Soviet ally, while seeking détente with Moscow. The Reagan administration aggressively March/April 2017 19

Return to Table of Contents TRUMP TIME Trump and China ambition in a positive direction while respecting China’s nationalist pride and Getting to Yes With Beijing protecting the United States’ own interests. Doing so does not mean Washington Susan Shirk should abandon the prudent approach that has served it well since Richard In recent years, China has started Nixon was president. Both countries throwing its weight around. It has would lose i it provoked a trade war, de ed international law and risked an arms race, or a military confronta- violent clashes in the East China and tion. But the United States can and South China Seas. It has bent trade should stand up to China more often, rules by discriminating against foreign by pushing back when Beijing violates businesses to help its own. It has tried international rules and harms U.S. to shut out foreign in uences while interests. The aim o such responses promoting its own propaganda abroad. should be not to contain China but to And it has resisted Western demands get it to act as a responsible stakeholder that it put more pressure on its ally North in the international system. The United Korea. China’s new assertiveness stems, States should welcome a more in uen- in part, from its growing power; the tial China, so long as it respects other country now boasts the world’s second- countries’ interests, contributes to the largest economy and its second-largest common good, and adheres to interna- military budget. But domestic insecuri- tional laws and norms. ties have also played a role. Slowing growth in an economy burdened by Getting the U.S.-Chinese relation- high levels o debt and accelerating ship right will require deft negotiating capital ight have made Chinese by Washington. But the wrong way to President Xi Jinping increasingly start the negotiating process is to sug- anxious about internal threats, from gest, as Trump did before he took o ce, popular protest to splits in the ruling that the United States might reconsider Communist Party. In response, he has its “one China” policy, under which Washington o cially recognizes only exed the country’s muscles abroad to the Chinese government in Beijing but play to nationalist fervor at home, while has a robust uno cial relationship with cracking down on any hint o domestic Taiwan. Now that Trump is in the White dissent. House, he would do well to return to the long-standing U.S. approach. For China’s ambition and insecure the past four decades, the United States nationalism are here to stay, so long has engaged with China with cautious as unelected Communist Party leaders optimism, while relying on its network remain in power. The United States o alliances and partnerships in Asia to must gure out how to channel the operate from a position o strength. Abandoning that strategy could have SUSAN SHIRK is Chair of the 21st Century grave consequences: the end o Chinese China Center at the University of California, San cooperation on pressing global problems Diego. Follow her on Twitter @SusanShirk1. from climate change to nuclear prolifera- 20

Trump and China tion, harsh economic retaliation by Chinese interests more aggressively China, or even military escalation. than before and, in the process, under- mine those o the United States. CHINA WAKES UP Part o that e ort has involved China has experienced an extraordinary pursuing protectionist policies that rise over the past three decades. By discriminate against U.S. businesses. 2030, its economy will likely overtake China has pressured foreign companies the United States’ as the world’s largest, to transfer proprietary technology to and its total global trade in goods already Chinese rms as a condition o doing exceeds that o the United States. China business in the country. It has stalled has invested billions o dollars in infra- in its drive to reform the sprawling structure on every continent. And as the state-owned companies that Xi sees as top trading partner o most Asian nations, the economic base o Communist Party it serves as the economic hub o an rule. And it has taken other steps, such increasingly integrated Asian economy. as disproportionately targeting foreign Yet the Chinese Communist Party rms under competition regulations ( ) sees its grasp on power as sur- to give domestic industries an unfair prisingly fragile. The country’s leaders advantage. No wonder American work- worry less about international threats ers and corporate leaders increasingly than internal ones, especially during feel that China is tilting the economic periods o economic weakness. In 2015, playing eld in its favor. the economy grew more slowly than in any year since 1990. Local governments Beijing has also enacted expansive have taken on vast levels o debt, poten- new regulations preventing foreign tially setting the country up for a devas- individuals and organizations that it tating crash i investors lose con dence believes threaten the ’s rule from in the value o the Chinese currency, operating inside the country. It has causing a re sale o locally owned forced foreign charities, think tanks, property. Already, despite tightening and other nonpro t organizations to capital controls, individuals and rms are obtain o cial approval for their activi- ties and given the police sweeping nding ways to move ever-greater powers to monitor them or shut them quantities o money out o the country. down. Chinese authorities also increas- ingly deny visas to academics, writers, Before the 2008 global nancial and journalists whose views they nd crisis, many in the West believed that politically objectionable. These restric- China’s rise would prove peaceful. The tions, i they continue, will undermine country had enacted market-oriented the foundation o stable U.S.-Chinese economic reforms, opened itsel up to relations: unfettered exchange between foreign trade and investment, behaved American and Chinese citizens. in a friendly fashion toward its neigh- bors, and joined established international It is in the realm o Asian regional institutions. But China’s rapid recovery security that China has externalized its from the crisis created a sense o Chi- ambitions and anxieties most signi - nese triumph and Western weakness cantly, by making assertive enforcement that led the government to promote o its maritime claims its highest priority. March/April 2017 21

Susan Shirk This xation on sovereignty has appreciates the value o their close ties trapped it and the United States in a with the United States. And he should rivalry that could easily turn violent. China claims a vast area o the South nd ways to rea rm the same commit- China Sea as its own, despite a ruling ment to other allies in the region. to the contrary by an international tribunal last year. Beijing declined to Second, Washington should push participate in the tribunal’s hearings back against Chinese practices that and opted instead to fan nationalist directly harm the United States, even ardor by challenging the right o the i that means raising tensions. It should U.S. Navy to operate in the disputed focus on speci c complaints, communi- waters, constructing large arti cial cate clearly with Beijing, and use tools islands, building military installations, that allow it to dial the intensity up or and harassing shing boats from coun- down in response to changes in China’s tries that also claim islands in the area. behavior. For example, it could enforce trade laws by imposing sanctions on Such assertiveness may have bol- particular industries, sanctions that it stered the ’s popularity at home, would lift i Beijing ended its discrimi- but some in China worry that it has natory economic practices. By contrast, harmed the country’s interests abroad. the kind o across-the-board punitive It has undercut relations with China’s tari s that Trump proposed on the neighbors in Southeast Asia, put China campaign trail would only provoke in direct opposition to international China to retaliate even more harshly. law, sown doubts about its intentions, Washington should reassure Chinese and introduced new tension into its leaders that when they act with restraint relations with the United States. and work to peacefully resolve disagree- ments, the United States is prepared LIVING TOGETHER to reciprocate. As it attempts to deal with an internation- Third, U.S. policymakers should ally powerful but domestically anxious keep in mind that China is not a unitary China, the United States should follow actor. They should design their words and actions to appeal to those groups in ve overarching guidelines. First, Wash- China, such as private businesses, that ington should maintain its network o favor foreign trade and investment and alliances and partnerships in Asia. That a restrained foreign policy and to weaken network is crucial to in uencing China’s those, such as the police, the ’s propa- actions. Threatening to walk away from ganda department, and the military, that U.S. alliances with Japan and South bene t from a tense relationship with Korea merely to get those countries to the United States. For example, the shoulder more o the cost o maintain- United States should use State Depart- ing U.S. military forces in the region, ment diplomats to convey its messages as Trump has suggested, would seriously on the South China Sea instead o the weaken the United States’ position in tough-talking military o cers it has Asia. Instead, Trump should consider used so far. And it should criticize new visiting Japan and South Korea early in construction in the area by all countries, his presidency to reassure them that he rather than continue to single out 22

Trump and China I am a rock: one of the disputed Spratly Islands, South China Sea, November 2016 TYRONE SIU / REUTERS China. This would assuage China’s Korean nuclear threat. An early meet- anger at U.S. interference and elevate ing between Trump and Xi, ideally in voices in China calling for the disputes an informal setting to allow for extended to be shelved or resolved peacefully. discussion, would help lay the ground- work for better communication in Fourth, to keep U.S.-Chinese rela- the future. tions running smoothly, U.S. o cials at the highest levels should communicate Finally, the United States should regularly with their Chinese counter- refrain from stoking antagonism toward parts. Xi’s centralization o power, his China. A majority o the publics in both insistence that the control all decisions, countries now view the other country and his mistrust o the career diplomats negatively, making it hard for the two in the Chinese Foreign Ministry are governments to compromise on high- making e ective communication with pro le issues. Leaders in both countries Chinese decision-makers harder for the have made this problem worse. The United States than in the past. To remedy has attempted to persuade the Chinese this problem, Trump and Xi should public that the United States is bent on agree to each pick a trusted senior adviser containing China’s economic growth and to serve as his communication channel international reach—a job made easier by and should appoint high-level special the government’s restrictions on informa- representatives to work together on tion. In the United States, politicians and important issues, such as the North the media often frame the relationship March/April 2017 23

Susan Shirk in zero-sum terms, creating the impres- for Chinese censorship o U.S. publica- sion that mutual gains are impossible. tions, such as The New York Times and To preserve their ability to negotiate, The Wall Street Journal, would violate American and Chinese politicians should U.S. laws guaranteeing free expression. attempt to lead popular opinion toward What’s more, restricting Chinese invest- a realistic but generous view o the ment in U.S. companies would hurt the other country. American workers they would otherwise employ. Nonetheless, Washington should INSIST ON RECIPROCITY nd ways to respond to China’s moves, These are the general principles that even when doing so means paying a should guide U.S. policy toward China, domestic price. When Beijing treats but it’s worth going into detail on how U.S. businesses unfairly; restricts the Trump should respond to three major access o U.S. think tanks, university areas o disagreement: China’s discrimi- programs, citizens’ groups, and media natory economic actions against U.S. organizations; or withholds visas from companies, its growing assertiveness in U.S. journalists and academics, Washing- regional waters, and its reluctance to ton should follow the well-respected put real pressure on North Korea about diplomatic principle o reciprocity. Mean- its nuclear program. while, because Chinese rms are eager to invest in the United States, the U.S. On economics, U.S. President Barack government can demand reciprocal access Obama took some steps in the right for American rms that would otherwise direction. On the eve o Xi’s state visit face tight restrictions in China. to the United States in 2015, for exam- ple, the Obama administration threat- The best way to ensure that each ened sanctions in retaliation for the theft country treats the other’s companies fairly o commercial secrets from U.S. compa- would be to complete the negotiations for nies by suspected Chinese government the bilateral investment treaty that have hackers. The threat worked: during his been under way since 2008. I the United visit, Xi and Obama announced a joint States went even further and resuscitated pact not to support or conduct the the Trans-Paci c Partnership—an admit- digital theft o intellectual property or tedly unlikely prospect given Trump’s other commercial secrets. Later that opposition to the trade pact—it would year, to help enforce the agreement, give Chinese o cials an incentive to Washington persuaded the G-20 nations reform China’s internal markets in order to make the same commitment. for China to eventually join the pact itself. Getting China to moderate its con- At the same time as the United States duct will not always prove so straight- holds the line on speci c issues, U.S. forward. In many instances, U.S. law o cials should continue their largely limits Washington’s options. For exam- successful e orts to integrate China ple, it prevents the government from into the global community. Washington treating Chinese companies operating errs when it opposes Chinese economic in the United States di erently from initiatives that other countries welcome, other foreign companies. Similarly, as the Obama administration did when banning Chinese media in retaliation it tried to sti e the nascent Asian 24

Infrastructure Investment Bank. Instead, Global the United States should support initia- tives that serve U.S. interests, even i Environmental they originate in Beijing. Politics BR■ ●✁ OVER TROUBLED WATER K O’N S D. V D , E When it comes to China’s maritime claims, the Trump administration should Global Environmental Politics take a rm position on the South China (GEP) examines the relationships Sea based on international law. I the between global political forces United States wants countries in Asia to and environmental change. see it as willing to stand up to Beijing when necessary, it cannot allow China More timely now than ever. to illegally interfere with U.S. ships in Subscribe today. international waters. In December 2016, for example, a Chinese navy ship unlaw- mitpressjournals.org/gep fully seized a U.S. underwater drone collecting oceanographic data for anti- submarine operations o the coast o the Philippines, outside the area claimed by China. Washington protested, and Beijing returned the drone. But the Obama administration should have insisted that Beijing acknowledge that the Chinese captain made a mistake, and it should have announced that it was considering having armed ships accompany U.S. Navy research vessels from then on. In spite o such incidents, the Trump administration should rely primarily on diplomacy and international law to manage the situation in the South China Sea. To demonstrate that legal principles, not an attempt to contain China, moti- vate its involvement, the United States should take an impartial stance on which countries own what. U.S. o cials should criticize not just China but also Brunei, Malaysia, the Philippines, Taiwan, and Vietnam i any o them construct new facilities on the rocks and islands they presently control. The U.S. Navy should conduct freedom-of-navigation 25

Susan Shirk operations to establish its navigational pressure on Pyongyang by restricting rights under international law not just the country’s trade, some 85 percent o in international waters claimed by China which goes to or through China. So far, but also in those claimed by other coun- however, Chinese leaders have refused tries. To avoid escalating tensions, the to do so. They worry that sanctions Pentagon should conduct these opera- could destroy the North Korean regime, tions quietly and routinely, as it does raising the prospect o a reuni ed Korea in other parts o the world, instead o with U.S. forces on the Chinese border. publicizing them. Doing so would send To ease China’s worries about a reuni ed the right message to China and other Korea, Trump could reassure Xi that the countries in the region without creating United States would take China’s secu- public pressure for them to respond rity concerns on the peninsula seriously aggressively. The United States should and refrain from placing its forces close also keep an active military presence in to the border. the area to signal that it will respond strongly should China use force against Beijing currently enables Pyongyang the United States or its allies. by allowing North Korean companies to operate inside China and failing to Washington should also publicly enforce international sanctions against welcome Beijing’s e orts to negotiate coal and iron ore exports from North bilaterally with other claimants. And it Korea. Trump should make it clear that should encourage China and the Asso- i China continues this behavior, the ciation o Southeast Asian Nations, o United States will impose sanctions on which the other claimants are members, Chinese banks and rms doing business to stabilize the situation by agreeing to with North Korea. Washington should a code o conduct that includes a freeze also remind Beijing that i they were on new construction and ways to jointly able to work together to reduce the manage shing resources. Finally, it North Korean threat, the United States must be said: the United States would might slow down its defensive military strengthen its position as an advocate steps in the region, such as the deploy- o international law i Congress nally ment o the Terminal High Altitude rati ed the Convention on the Law Area Defense antimissile system to o the Sea, the treaty that governs South Korea. such cases. Finally, getting China to help with BOMB DISPOSAL the North Korean nuclear threat will require a third element: a serious e ort Dealing with the threat o North Korea’s to reach a deal with Pyongyang. Wash- nuclear program will require a similar ington should propose negotiations combination o diplomacy and strength. modeled on the talks that led to the 2015 Trump should make clear to Xi that he Iran nuclear agreement. Washington will regard China’s cooperation in getting could o er Pyongyang a peace treaty, the North Korea to end its nuclear and missile normalization o diplomatic relations, development programs as a critical test and the sequential removal o sanctions o the U.S.-Chinese relationship. I in exchange for a freeze on North Korea’s Beijing wished, it could put massive nuclear and missile development and 26

Trump and China moves toward denuclearization. All these to China, but rather than abandon their steps would require close coordination approach entirely, Trump should keep with South Korea. North Korea has long what has worked and change what has sown divisions between China, South not. Most important, he should preserve Korea, and the United States, and when the United States’ position o strength the three countries cannot overcome in Asia. He should also avoid radical their di erences, North Korea wins. shifts in policy or confrontational rheto- ric that could shake Beijing’s con dence IF IT AIN’T BROKE in Washington’s peaceful intentions and make negotiations between the two As with other issues, it’s hard to say countries impossible. But i China exactly how Trump will handle relations continues to assert its own perceived with China. But even before he took interests while paying little attention to o ce, he created a crisis. In December, U.S. concerns, the United States needs he took a congratulatory phone call to push back. When China’s leaders from Tsai Ing-wen, the president o are tempted to pick ghts with foreign Taiwan, making Trump the rst U.S. countries to bolster their support at president or president-elect to speak home—as Xi might be in the run-up to o cially to his Taiwanese counterpart the ’s midterm conclave at the end since the United States broke o o cial o 2017—they should look out to the relations with the island in 1979. Later Paci c, see a strong United States that month, he told Fox News, “I don’t standing with its allies and partners, know why we have to be bound by a and think twice before acting.∂ ‘one China’ policy unless we make a deal with China having to do with other things, including trade.” I Trump pursues such a radical reversal o policy as president, it could destroy the exist- ing foundation for peaceful relations and risk a furious response from China. Xi, fearful o looking weak to the Chinese public, would likely retaliate by imposing painful economic penal- ties on Taiwan and the United States and taking provocative military actions in the Taiwan Strait (which has been peaceful for more than a decade) or the South China Sea. What’s more, treat- ing China as an enemy would make it impossible for the two countries to work together on global problems such as climate change, epidemics, and nuclear proliferation. Previous U.S. administrations did not get everything right when it came March/April 2017 27

Return to Table of Contents TRUMP TIME Trump and broad range o choices. At one extreme, Terrorism Washington could abandon its military commitments in the greater Middle U.S. Strategy After ISIS East on the assumption that it is U.S. interference that provokes terrorism Hal Brands and Peter Feaver in the rst place. At the other, it could adopt a heavy-footprint surge strategy The United States will soon reach that would involve using overwhelming a crossroads in its struggle against military force to destroy globally capable terrorism. The international terrorist organizations and attempt to coalition ghting the Islamic State (also politically transform the societies that known as ) has driven the group produce them. In between lie two options: out o much o the territory it once one, a light-footprint approach akin to held and, sooner or later, will militarily that taken by the Obama administration defeat it by destroying its core in Iraq before ’ rise; the other, a more robust and Syria. But military victory over approach closer to Washington’s response will not end the global war on terrorism to since late 2014. that the United States has waged since 9/11. Some o ’ provinces may outlive None o these four strategies is ideal. its core. Remnants o the caliphate may The extreme options—disengagement morph into an insurgency. Al Qaeda and surge—promise to dramatically and its a liates will still pose a threat. reduce the threat. But both would likely Moreover, the conditions that breed fail in costly ways, and both are politically jihadist organizations will likely persist untenable today. The middle choices across the greater Middle East. So the pose less risk and are more politically United States must decide what strat- palatable. But they also promise far egy to pursue in the next stage o the less and would likely leave the United war on terrorism. States stuck in a protracted con ict. On the campaign trail, Donald Trump Trump must therefore pick the best called for sweeping changes in U.S. o a bad lot. Despite his campaign rheto- counterterrorism strategy, promising to ric, the least worst choice would be an “defeat the ideology o radical Islamic approach close to the medium-footprint terrorism.” As president, he faces a strategy being used to defeat today: an aggressive campaign encompassing HAL BRANDS is Henry A. Kissinger Distin- air strikes, drone attacks, special opera- guished Professor of Global A airs at Johns tions raids, and small deployments o Hopkins University’s School of Advanced regular ground troops in response to International Studies and a Senior Fellow at the speci c threats, all in support o e orts Center for Strategic and Budgetary Assessments. by regional U.S. partners. This approach is imperfect, and it will not achieve PETER FEAVER is Professor of Political decisive victory in a con ict that shows Science and Public Policy at Duke University. few signs o ending soon. But it is the most likely way o delivering an acceptable degree o security at an acceptable price. 28

Trump and Terrorism HOW TO FIGHT A HYDRA al-Nusra in Syria are not going away either. Moreover, because much o the Since 9/11, the U.S. government has Middle East remains a fount o extrem- proved remarkably pro cient at killing ism, a successor to may arise in terrorists, frustrating their plans, and Iraq, Syria, or somewhere else. The degrading their organizations. Yet no United States will need a strategy for sooner has Washington nished o the next stage o its war on terrorism. one group than a more dangerous one emerges. The United States gravely JUST DO NOTHING wounded al Qaeda in Afghanistan in 2001–2 and the decade thereafter, only At one extreme, the United States could to be confronted by the rise o al Qaeda exploit the opportunity provided by in Iraq, al Qaeda in the Arabian Penin- sula ( ), and other potent a liates ’ defeat to adopt a strategy favored o the group. The struggle against those by dovish critics: military disengagement organizations was superseded in turn from the greater Middle East. This when —the most virulent jihadist option would represent a radical break group yet—emerged on the scene. Even from recent practice and a return to U.S. as the United States has repeatedly counterterrorism strategy o the 1990s achieved operational successes, enduring and even before. That would mean victory in the war on terrorism has dramatically reducing U.S. military remained elusive. presence in the greater Middle East, with no combat troops remaining beyond This problem again looms large. those needed to secure U.S. embassies. As o late 2016, had lost control o Washington might still conduct a small key strongholds, such as Fallujah and number o counterterrorism strikes, but Ramadi in Iraq and Manbij and Jarabulus these would be mostly retaliatory in in Syria. Iraqi forces, supported by an nature, such as the strikes on al Qaeda international coalition, were ghting to bases ordered by U.S. President Bill retake Mosul, and U.S.-backed militia Clinton in 1998 after the group bombed groups in Syria had begun operations the U.S. embassies in Kenya and Tanzania. to capture ’ capital, Raqqa. The U.S. Any preemptive attacks would be against Department o Defense has estimated only imminent threats, and only with that since August 2014, the coalition drones or other long-distance, limited- has killed over 45,000 ghters, and liability methods o attack. Additionally, that ’ combat pro ciency, organiza- the United States would make no attempt tional cohesion, and morale have fallen to create counterterrorism partners from sharply. I ’ defeat is now only a scratch, as it did in Afghanistan and Iraq, matter o time. and would signi cantly reduce its existing military cooperation on counterterror- But the group’s defeat will not end ism with countries such as Egypt and the war on terrorism. I ’ provinces in Saudi Arabia. countries such as Afghanistan, Bangla- desh, Egypt, and Libya may survive. Disengagement would thus mean I ghters in Iraq and Syria may return confronting terrorism primarily through to their insurgent roots. Al Shabab in nonmilitary means. At home, the United Somalia, in Yemen, and Jabhat States would focus on intelligence and March/April 2017 29

Hal Brands and Peter Feaver law enforcement. Abroad, it would focus bloodied. Given Washington’s traditional on sharing intelligence with other coun- role as the regional stabilizer, disengage- tries and securing diplomatic cooperation ment could also create a power vacuum on counterterrorism. Disengagement in the Middle East, perhaps threatening might involve some limited development states crucial to U.S. interests, such as assistance to Middle Eastern countries, Saudi Arabia. but U.S. policy would not aim to funda- mentally remake them. Put simply, dis- Worst o all, disengagement would engagement would take the United States probably not actually reduce the terrorist o the war footing o the past 15 years. threat. Although U.S. interventionism is one source o jihadist fury, there are The logic o disengagement is simple: others, including the United States’ liberal U.S. military involvement in the Muslim values and its nonmilitary support for world cannot x the problem o terror- repressive regimes, such as those in Egypt ism; in fact, it exacerbates it by sowing and Saudi Arabia. And although inaction anger at U.S. meddling. Pulling back might mitigate anti-U.S. blowback, it could therefore minimize the terrorist would also prevent the United States threat. At the least, disengagement would from disrupting incipient dangers—as remove a tempting target—the U.S. happened before 9/11, when U.S. o cials military—from the terrorists’ backyard failed to deal with the growing threat and reduce the blowback that occurs posed by al Qaeda. Disengagement, when U.S. forces accidentally kill inno- then, might not take the United States cent people or act in other heavy-handed out o the terrorists’ bull’s-eye, but it ways. It would also deprive extremists would deprive it o the tools needed o crucial propaganda material: U.S. to keep the threat at bay. And i a less “occupation” o the Holy Land. More aggressive posture contributed to a optimistically, it might redirect the mass-casualty attack, leaders who had anger o militant Islamists away from gambled on disengagement would likely the United States and toward their own face political ruin. repressive governments and prevent more moderates from radicalizing. Given these downsides, no U.S. Whatever terrorist threat remained, the president is likely to embrace disengage- argument runs, could best be handled ment. It is telling that the Obama admin- by learning to live with occasional small istration, despite showing some sympathy attacks rather than by overreacting to for the logic o disengagement following them. Disengagement would mean, Osama bin Laden’s death in 2011, ulti- its proponents claim, that the United mately concluded that the strategy was States would save billions o dollars neither practical nor politically viable. annually by conducting fewer opera- tions and marginally reducing the size SOFTLY SOFTLY o its military. A post- strategy need not take U.S. Yet disengagement would also carry counterterrorism all the way back to severe liabilities. It would grant extremists the 1990s. A second, light-footprint a powerful propaganda point: that the option would wind the clock back only United States will ee, not ght, when to the period from 2011 to 2014, after bin Laden’s death but before emerged 30

Trump and Terrorism Special delivery: a peshmerga ghter near Mosul, Iraq, September 2014 AHMED JADALLAH / REUTERS as a major force. The logic behind this occasional raids by special operations strategy holds that the United States forces. Where ground troops were can reduce terrorism to a tolerable level needed to contain the most lethal by using limited military force to ght terrorist organizations— , for terrorist groups capable o major attacks. instance, or al Shabab—Washington But it must not go too far, because would rely on regional governments outsiders cannot x the deep-seated to provide them, assisting with long- political problems within the Muslim distance strikes and logistical support. world that cause terrorism. So the In all cases, regional partners would United States must avoid committing do the lion’s share o the work. The too many troops or resources; the risk light-footprint strategy would thus o getting stuck in a quagmire is as aim to manage, rather than defeat, great as the risk o terrorism itself. what is considered a real but limited threat, and do so as cheaply as possible. In practice, this strategy would entail sustained, preemptive military This approach would have its virtues. e orts to weaken the most dangerous It would use the United States’ unique terrorist organizations, wherever they military capabilities, such as the ability may be. Yet the United States would to conduct long-range strikes, to keep avoid even modest deployments o pressure on terrorist organizations with- U.S. ground forces by limiting itsel out creating the blowback caused by larger to drone strikes, aerial attacks, and military interventions. It would also avoid March/April 2017 31

Hal Brands and Peter Feaver stoking alarm at home, keeping a threat counterterrorism. Yet by early 2015, that kills far fewer Americans than gun the Yemeni state and armed forces violence or heart disease in perspective. were crumbling before an externally supported Houthi rebellion, taking Not least, although a light-footprint down the U.S. counterterrorism mis- strategy would cost more than disen- sion in the process and allowing gagement, it would be cheaper than to expand its hold in the country. the more aggressive options. It could therefore free up resources to deal with The danger o a light-footprint other pressing problems, from climate approach, then, is that it may incur change to resurgent great-power rivalry. some o the costs o action but not do Given these advantages, it is unsurpris- enough to keep the threat under control— ing that this approach appealed to the and that when it fails, it will require Obama administration after the end the United States to intervene under o the Iraq war and bin Laden’s death. less favorable circumstances than before, while also bringing down heavy criti- As the Obama administration dis- cism on the leaders responsible. This covered, however, a light footprint is is exactly what happened to the Obama no panacea. For one thing, the strategy administration by 2014–15, causing it means relying on unsavory local actors to shift to a more aggressive strategy. who are wont to do morally appalling things. Nor does it even guarantee THE GOLDILOCKS STRATEGY success. At best, it would involve enor- mous persistence merely to contain The third—and probably best—option terrorist organizations and avert disaster; is a beefed-up version o the current the Israeli government calls its version strategy: call it “counter- plus.” It o the strategy “mowing the grass,” would involve a larger U.S. military evoking a Sisyphean task. At worst, local commitment than the rst two but sub- partners, without more U.S. support stantially less than a surge approach. than this option entails, might fail to At a minimum, the commitment would contain terrorist groups—something that approximate that o the Obama admin- has doomed the strategy in the past. istration’s 2016 counter- campaign, which deployed roughly 5,000 U.S. Between 2003 and 2011, for instance, troops to Iraq and Syria and included Washington spent considerable time thousands more conducting air strikes and money building up the Iraqi security or other supporting operations in forces as a counterterrorism partner— the region. At a maximum, it would only to see them collapse after 2011, approach 20,000 military personnel, when the United States withdrew its deployed to address speci c threats troops from Iraq. This allowed to from the strongest terrorist organiza- establish its quasi state, recruit foreign tions and to train and assist regional forces. And crucially, this strategy ghters, and direct and inspire attacks. would go beyond just deploying more Something similar happened in Yemen. troops than a light-footprint approach: it would also allow them to operate The light-footprint approach worked more assertively. well for a time against —so well that in 2013 and 2014, the Obama admin- istration touted it as a model for 32

U.S. forces would still conduct drone THE strikes and other long-distance, limited- HUNTINGTON liability attacks, but these would form part o larger, more intensive air campaigns PRIZE involving manned aircraft, forward air controllers, and a broader range o targets. CALL FOR BOOKS Meanwhile, special operations forces would conduct a steady rhythm o raids Students and friends of Samuel to gather intelligence, kill or capture P. Huntington (1927–2008) have terrorist leaders, and disrupt terrorist established a prize in the amount of organizations. And battalion-size U.S. $10,000 for the best book published forces would carry out combat operations each year in the field of national on the ground, either independently or in security. The book can be a work support o regional partners. These might of history or political science, or a be similar to Operation Anaconda in work by a practitioner of statecraft. Afghanistan in 2002, in which over 1,000 The prize will not be awarded if the U.S. troops and 1,000 Afghan militia Huntington Prize Committee judges forces, supported by other coalition that the submissions in a given year forces, engaged in a erce battle against do not meet the high standards set al Qaeda and Taliban ghters. Finally, by Samuel P. Huntington. U.S. troops would work with partner forces not just by training and equipping The Huntington Prize Committee is them but also by advising them and pleased to solicit nominations for accompanying them into battle. These books published in 2016. security force assistance missions would continue even after the main campaigns Nominations will be accepted until had ended to make sure partner forces 31 May 2017 remained e ective. A letter of nomination and two copies of the book Under this approach, the United should be sent to: States would still not attempt to trans- form Middle Eastern societies, although Ann Townes it would encourage local partners to Weatherhead Center for International Affairs make political and economic reforms to defang jihadist ideology, and it would Knafel Building use diplomacy and modest economic 1737 Cambridge Street investments to incentivize those re- Cambridge, MA 02138 forms. In the meantime, Washington would seek to militarily defeat, rather 33 than merely contain, extremist organi- zations. And to do so, it would accept the risk o more American casualties. This strategy rests on a diagnosis similar to that underlying the light- footprint approach: that the United

Hal Brands and Peter Feaver States cannot cure the pathologies that 15 years suggests that this strategy can cause terrorism and so will never elimi- work against even fearsome opponents, nate the threat. Yet this approach is whether al Qaeda in Afghanistan in more pessimistic about the dangers o 2001–2 or today. Finally, by strik- allowing extremist organizations to ing a balance between doing too much survive and more optimistic about the and doing too little, this option would chances o militarily defeating them. mitigate the political risks o both more The United States can achieve signi - passive and more aggressive strategies. cant, i not permanent, military success against terrorists, the thinking goes, by Yet this strategy would also have destroying their organizations, killing downsides. It would involve deploying their leaders and foot soldiers, and between 5,000 and 20,000 troops at leaving them with no safe havens. any one time. Even limited deployments Knock an opponent down hard enough, inevitably raise the chances o more in other words, and it will take him a American deaths than planners expect. while to get back up. It would also mean spending $5–$20 billion per year—not a prohibitive sum, Indeed, the main advantage o this but far more than more passive options strategy over less aggressive options is would cost. that it would pack a greater punch against terrorist networks while still The greatest danger o such a cam- avoiding large, costly, and politically paign is that it might last inde nitely. toxic deployments. By combining a Even in the best case, it would require a range o tools—airpower, advisers, great deal o time to succeed—witness special operations forces, intelligence, the glacial pace o the counter- and diplomacy—the United States could campaign today. At worst, i terrorism destroy the most dangerous terrorist is indeed rooted in the political pathol- networks and prevent threats that are ogies o many Muslim societies, then manageable today from turning into military victories may not stay won unless something far deadlier tomorrow. What’s those pathologies are cured—something more, providing more robust support that might take more energy and re- to partner forces would help maintain sources than this strategy would provide. their e ectiveness and give the United States greater leverage to moderate SWING A BIG STICK counterproductive behaviors such as human rights violations and sectarian This point leads to the nal option, a abuse, which could help prevent blow- surge strategy. This would entail a back. For example, the local forces with large, medium- to long-term military which the United States has partnered deployment similar in size to the to ght —the Iraqi security forces surge o 150,000–200,000 troops that and the Kurdish peshmerga in Iraq and the George W. Bush administration Arab and Kurdish groups in Syria— committed to the Iraq war in 2007–8, have performed better since the United along with proportional economic, States shifted to its current strategy in diplomatic, and intelligence resources. late 2014. The experience o the past The United States would aim not only to destroy the most dangerous terrorist organizations wherever they emerged 34

Trump and Terrorism but also to remake the political com- winning decisively, despite the plexion o the greater Middle East. extremely high cost. Like the second and third options, Yet that cost—which must be borne this strategy rests on the theory that for many years—is precisely the Middle Eastern terrorism ows from problem with this strategy. Transform- political illiberalism in the Muslim ing the politics o the greater Middle world. But it assumes that the United East in the ways the United States States must cure the disease, not merely would want would be a huge challenge treat its symptoms. Failing to do so, the under any circumstances. And without a argument goes, would ensure that new shock the size o 9/11, even a deter- terrorist groups would arise as old ones mined U.S. administration would were defeated. In a world o imperfect probably lack the political will to sustain intelligence, allowing new threats to the necessary level o spending and survive risks exposing Americans to a deployments—and su er the resulting catastrophic attack. casualties—over the long term. The result might be the worst o all worlds: This diagnosis suggests a two-step the United States would invest vast response. First, destroy any terrorist resources up-front without the commit- organization capable o global reach, ment necessary to see the project through. using whatever means necessary, includ- ing major military operations featuring This is not the only liability. A surge tens o thousands o troops. Second, risks distorting U.S. grand strategy by transform the underlying sociopolitical pouring resources into counterterror- dynamics that drive jihadist ideology. ism at the expense o other vital issues, Doing so would require catalyzing politi- such as climate change, the rise o China, cal liberalization in the Islamic world, and a revanchist Russia. What’s more, so the United States would have to putting more skin in the game might engage in nation building and democ- just encourage other countries to free- racy promotion in all countries where ride on U.S. e orts. Finally, a strategy it had intervened to root out terrorism. that relies on large military interven- tions in the greater Middle East risks The allure o this option is that it provoking all the blowback that a lighter o ers, in theory at least, the chance to footprint would avoid. Terrorists would win the war on terrorism once and for attack U.S. forces, whose presence in all. This re ects a crucial insight from the Middle East would validate the the Iraq war. Even i U.S. o cials jihadist narrative o a U.S. crusade blundered when they chose to invade against Muslims. Iraq, they made just as grave a mistake in committing insu cient troops and Whatever its attractions, then, a surge resources to Iraqi reconstruction and strategy would face daunting, probably in pulling U.S. troops out so precipi- insurmountable obstacles. No wonder, tously in 2011, which jeopardized U.S. then, that no major candidate in the 2016 soldiers’ hard-won gains. Since hal presidential race advocated anything measures and premature withdrawal close to this option—and that Trump end only in long-term failure, the has explicitly taken this sort o nation logic goes, better to take a shot at building o the table. March/April 2017 35

Hal Brands and Peter Feaver STEADY AS SHE GOES the light-footprint approach. But it succeeded both when the Bush adminis- The tragedy o the United States’ war on tration and when the Obama adminis- terrorism is that it has no clean solution. tration employed it aggressively, and it Each o the four main options for ght- could well eliminate the worst aspect o ing terrorism has aws, in some cases the terrorist threat—the existence o crippling ones. But the United States breeding grounds for mass-casualty must have a strategy. So which one should attacks—i pursued consistently. The it pick? U.S. o cials should discard the cost o doing so would hardly be trivial, two extremes, disengagement and surge, but a wealthy superpower could manage on pragmatic grounds. Disengaging it. Additionally, although this approach would bet the house on an untested would probably not produce exceptional hypothesis—that pulling back would performance from U.S. partners, it might signi cantly reduce the terrorist threat— help them do well enough to limit U.S. which would leave the United States costs over the long run. Finally, despite terribly vulnerable i it proved false. Trump’s harsh critiques o the Obama Few prudent politicians would hazard administration’s campaign against , their careers on such a wager. The surge this approach is probably the most approach, for its part, would be enor- politically salable. mously di cult to execute, and because o its extremely high cost, politicians The Trump administration should would likely lack the stamina to stay thus take this variant o the strategy that the course. the Obama administration had built up to by 2016 as its guide. It is not perfect That leaves the two middle-ground and will not end the war on terrorism options: a light footprint and counter- anytime soon. But it may give the United plus. O these, the former has a lousy States a minimally acceptable level o recent track record, as emerged and security in a dangerous struggle.∂ the United States’ position deteriorated dramatically the last time this strategy dominated U.S. policy. Employing it would risk starting a cycle in which a U.S. pullback causes the threat to increase, compelling the United States to intervene again under worse circumstances than before. The strategy thus also occupies a precarious political footing: it would probably not survive a repetition o the type o attacks that occurred in late 2015 and 2016, when -inspired shooters killed 63 people in San Bernardino and Orlando. So the last strategy standing is counter- plus. True, it has real problems and risks doing no more than failing at greater expense than 36

Return to Table of Contents Trump and the and the current Israeli government o TRUMP TIME Holy Land Prime Minister Benjamin Netanyahu, the most right-wing in Israel’s history, First, Do No Harm represents segments o society that are xated on a vision o an Israel that Dana H. Allin and excludes Palestinian aspirations and Steven N. Simon rights. The Obama administration made a serious e ort to break the impasse but Every U.S. president since Harry failed, and the status quo is probably Truman has sought peace between unsustainable. Although any new admin- Israel and its Arab neighbors. istration would nd the landscape daunt- Every president since Lyndon Johnson ing, the United States’ strategic interests has opposed the building o Jewish settle- and moral values call for continued opposi- ments on land that Israel occupied in tion to Israeli settlements in occupied June 1967 and has supported a diplo- territory, a continued insistence that the matic solution by which the Jewish state Palestinians pursue their cause through would trade much o that land for a peaceful means, a continued commitment secure and lasting peace. And every to a two-state solution, and continued president since Bill Clinton has worked attentiveness to Israel’s strategic vulner- for a two-state solution under which abilities. In other words, the most basic Israel would enjoy security and genuine requirement is to do no harm, thus acceptance in the Middle East and the following in the tradition o past presi- Palestinians would run their own a airs dents. and prosper in a viable, independent state. Donald Trump, it must be said, looks Achieving these goals has never been like a di erent kind o president. In his easy, and Washington’s attempts to put coldness toward the vision o a Palestinian the Israelis and the Palestinians on the state and his indi erence to the problem path to peace have regularly been stymied o settlements, he has aligned himsel by rejectionism on both sides. Palestinian with Israel’s right wing, and his surprise leaders have proved unable or unwilling victory gave that camp hope that their to grasp past diplomatic opportunities, dreams o absorbing the Palestinian territories into Israel might be ful lled, DANA H. ALLIN is Editor of Survival and Senior unencumbered by American scolding or Fellow for U.S. Foreign Policy and Transatlantic restraint. Israeli conservatives may well A airs at the International Institute for Strategic envision an alliance between the most Studies in London. illiberal elements o both societies, in which the United States and Israel ght STEVEN N. SIMON is John J. McCloy ‘16 their shared enemies o Iran and radical Visiting Professor of History at Amherst Islam, without having to worry about College. From 2011 to 2012, he served as Senior the niceties that concerned the Obama Director for the Middle East and North Africa at administration so much. President Barack the U.S. National Security Council. Obama took the view that the construction and expansion o Jewish settlements in They are the authors of Our Separate Ways: The the West Bank was killing any remaining Struggle for the Future of the U.S.-Israel Alliance. March/April 2017 37

Dana H. Allin and Steven N. Simon prospects for a two-state solution to the Chicago Jews supporting his political Israeli-Palestinian con ict. For Israel’s rise, entered the White House with a hard right, killing the two-state solution strong conviction that some form o is a feature, not a bug, o the new tough love was necessary to restore the dispensation. moral basis o the alliance. Under his tenure, the United States nally, and But other Israelis rightly fear the decisively, confronted Jerusalem on the death o that long-standing proposal. growth o Jewish settlements in the The direct nancial costs o occupation occupied territories when, in 2009, he may be relatively low, and the diplomatic demanded a complete freeze on new costs manageable. But the overall price construction in the West Bank and East will rise over time—not just in terms o Jerusalem (although he later accepted a military incursions into the territories partial freeze that excluded Jerusalem). or other expensive deployments to restore To preserve con dence between the order should it break down but also in two allies, however, Obama also recom- terms o the damage to the Israeli polity mitted the United States to the security itsel and Israel’s place in the world. The relationship, by substantially increasing imperatives o continued occupation the amount o U.S. security assistance entail depriving Palestinians o civil to Israel, notably for missile defense. rights, which will ultimately damage the democratic constitutional order in It didn’t work. Israeli o cials, including Israel. That will, in turn, complicate Netanyahu, have acknowledged that the Israel’s foreign relations, particularly Obama administration o ered unstinting in the West. Many Israelis believe that military and security cooperation. But withdrawal from the West Bank in the that support was overshadowed—not only context o a peace accord would involve by the confrontation over settlements unreasonable risks, but those risks must but also by tectonic regional shifts that be weighed against the risks o contin- opened multiple chasms between the ued occupation. two countries. Israelis across the political spectrum were shocked by the United OBAMA’S LEGACY States’ decision to urge Egyptian President Hosni Mubarak out o o ce in Like , the U.S.-Israeli alliance was 2011, by its cooperation with the Muslim founded not only on mutual strategic Brotherhood government o Mohamed interests but also on cultural connec- Morsi after he won the Egyptian presi- tions and shared democratic values. But dency the following year, and by its the similarities end there: the partner- distinct lack o enthusiasm for the ship between the United States and military coup that drove Morsi from Israel does not include a defense treaty, o ce the year after that. Along with and the bond o shared values has been Sunni Arab regimes, Israel was likewise steadily weakened by cultural and demo- alarmed by Obama’s failure to launch graphic changes in both countries, as air strikes to enforce his “redline” on well as by the manifest failures o the Syria’s use o chemical weapons. Israeli-Palestinian peace process. Then there was Iran. There, Obama’s Obama, whose liberal Zionism was two overriding priorities were to prevent nurtured in a circle o progressive 38