US-South Korea Summit, Sudan Crisis, and the New Washington Consensus

On this episode, we begin with South Korea’s President Yoon Suk Yeol’s 6-day state visit to the United States. South Koreans have become increasingly concerned about the nuclear threat from North Korea. We discuss if South Korea got the security guarantees they desired. We also look at other key issues in the US-South Korea relationship.

Fierce fighting in Sudan has been capturing headlines. But what are they fighting about? We go over the key actors, what is at stake, and why Americans should care about this conflict.

Finally, we introduce a new segment: Changing Tides, where we read a book, set of articles, or in today’s case, speeches that are either changing the world or reflecting on how the world is changing. Today, we discuss two recent foreign policy speeches by the Biden administration that were given in recent days. That of Janet Yellen on economic policy towards China and Jake Sullivan on Biden’s foreign policy for the middle class.

Topics Discussed in this Episode

• 04:50 - U.S.-South Korea Summit
• 30:45 - Crisis in Sudan
• 49:30 Changing Tides: Discussion of the Biden Administration’s "new" Washington Consensus and foreign policy for the middle class 

Articles and Resources Mentioned in Episode

U.S.-South Korea Summit

• South Korea has America in its face and China breathing down its neck (The Economist)
• America’s Ironclad Alliance With South Korea Is a Touch Rusty (Foreign Policy)
• After Warmth From Biden, South Korea’s Leader Faces a Different Tune at Home (NY Times)

Crisis in Sudan

• In Sudan, a power struggle between rival armed forces turns violent (Vox)
• What’s behind the fighting in Sudan, and what is at stake? (WaPo)
• United States Says Wagner Has Quietly Picked Sides in Sudan (NY Times)

Changing Tides: Discussing the ‘new’ Washington Consensus and "foreign policy for the middle class"

• Jake Sullivan’s Talk at the Brookings Institution
• Janet Yellon’s Talk at Johns Hopkins SAIS

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• Show Website: www.kelloggsglobalpolitics.com
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Chapters

• 0:00 Intro
• 4:50 US-SK Summit
• 30:45 Sudan
• 49:25 Changing Tides

Transcript

Welcome to Kellogg's Global Politics, a podcast on current events in U.S. foreign policy and international affairs. My name is Dr. Anita Kellogg, an international relations scholar specializing in the relationship between economics and national security. I'm here with my co-host, Ryan Kellogg, an expert in energy investment and policy. Thanks and glad to be back. So this is episode 33 and we're recording this on April 30, 2023. On this episode, we begin with South Korea's President Yoon Chik-yul's six-state visit to the United States. South Koreans have become increasingly concerned about the nuclear threat from North Korea. We discussed if South Korea got the security guarantees they desire. We also look at other key issues in the U.S.-South Korea relationship. Fierce fighting in Sudan has been capturing headlines, but what are they fighting about? We go over who are the key actors, what are the stakes, and why Americans should care about this conflict. Finally, we introduce a new segment, Changing Tides, where we read a book, set of articles, or in today's cases, speeches that are either changing the world or reflecting on how the world is changing. Today, we discuss two recent foreign policy speeches by the Biden administration that were given in recent days, that of Janet Yellen on economic policy towards China and Jake Sullivan on Biden's foreign policy for the middle class. So I know you had a fun little event this week, taking a trip down back to your school days. You got to go on a field trip to Gettysburg in this case. How was that whole experience for you? Yeah, it was pretty interesting. One, the idea of having a field trip, which they call Staff Rights, which is the book, Build the Teen Comradery. But basically, it was a lot like a field trip. We went to Gettysburg. We had somebody from the faculty who explained the main aspects of the conflict, went to the battleground where we saw from towers and stuff, where everything took place. And then we had lunch. Yeah. And I mean, kind of similar to a field trip, you had some homework before that you had to do, too. I don't remember. That was pretty involved. I don't remember field trips involving homework. Sometimes. I don't know. I think Rebecca has to do, where at least you're learning something in the classroom and then you're going on a field trip. Well, it was probably good. I complained about my homework, but since I hadn't thought about the battle of Gettysburg since high school, which was a long time ago, it was probably good to refresh. But yeah, we had like this 90-page book that was talking about frictions and command and communication. And yeah, that wasn't the most entertaining part. But I guess you got a sense of who the main generals were. And then yeah, we had to watch the movie Gettysburg, which is long. But you got to watch twice, I understand. So we watched it here, which for those that haven't watched it, it's definitely worth checking out. It's from 1993, stars. Again, it's a movie that I remarked that I don't think could be made today, just because it is pretty balanced and presents the Confederacy and the Farewell Light. And also Martin Sheen playing Robert E. Lee. I don't think Martin Sheen's taking that role today. Maybe not. But I'm not sure I recommend the movie. I guess it depends on who you are. I wouldn't have watched it if it wasn't for this field trip. And yeah, I stand by that. That's that. I think it's worth a one time in your lifetime suit or watch. Just like Titanic or Schindler's List or maybe not. Maybe I'm elevated this movie too high. People are going to be disappointed. But you can't put this movie in the same category of Schindler's List. I'm pretty sure it won some Oscars. It doesn't matter. The two only different categories. Anyway, it's one of those very long movies that you want to watch once. Yeah. Well, did it count that I'd watched it as a kid? I just didn't remember any of it. No. No, you already forgot it. And this is part of your homework. So yeah. So yeah. So I got to watch the movie and that was helpful for going to the battlefield though. And when they were describing, oh, this is where Sykes was and, you know, all the different generals just kind of having some idea of who they were. Yeah. No, that's good. I mean, keep art also. Any juice boxes or orange slices for you on that? No, we did not get that. We got alcohol at lunch. So you know. Yeah. This is a real adult field trip. I mean, yeah. Oh, very cool. Yeah. So yeah. So that was my week. All right. So on Tuesday, April 25th, kicked off a six day state visit by the South Korean president, Yoon Sik-ryeul, to commemorate the 70th anniversary of the mutual defense treaty signed at the end of the Korean War. The two countries had a great deal to talk about regarding South Korean security, China and trade. The summit comes at a time in which the stated Korean foreign policy under Yoon has been remarkably aligned with US interests in the region. So to begin with, strengthening the national defense, which has been a contribution to both by both South Korea and the US, which resumed drills for the first time since Trump came into office. He'd gotten rid of some of those drills. So they expanded the joint military exercises. A huge deal is the steps that they made for reconciliation with Japan and that Korea dropped its demand for compensation for victims of forced labor. This is pretty huge because it's just an issue that I recall from, you know, our first visit to Korea 20 years ago. This has been an important part of the friction between the two countries. But also during the previous president, there was a trade war going on over our semiconductors and a lot of hostility. So it's important to the US to see this reconciliation, particularly when it comes to security against China. The South Korean president also, in a very unpopular in his own country, defended the US after the DOD Document League revealing spying on the South Korean government. It's become more assertive in pushing liberal values abroad. So first I wanted to talk about though is one of the key issues leading up to the summit and that's concerns over North Korean aggression. So the talk has become very popular in South Korea, the desire for South Korea to develop its own nuclear weapons. And this comes in the context of a couple of things. One, you have North Korea just keeps increasing its nuclear program. It just makes steady progress. And it's almost like the US and the rest of the world has given up and trying to do anything to really stop it. So there are concerns there. There's concerns such as after when Trump was president, the threat to withdraw all troops from the country. So concerns over whether the US will actually commit to defending South Korea and those sort of issues. So this has been an important backdrop to the summit and I think a good place to start. So what do you think about South Korea re-nuclearizing? Yeah, no, I mean it's definitely from Korean's perspective and given particularly the actions of the Trump administration and the isolationist strain that still exists within a certain subset of the Republican Party. There's this concern that the US would not be a reliable partner under the American nuclear umbrella anymore that especially with the capabilities advanced by North Korea on ballistic missile technology capable already of potentially striking the West Coast and they're certainly rapidly advancing where the entire continental US could be a possibility as well. So in that case Koreans look at that and think to themselves, given this history with Trump of threatening to pull troops off of the peninsula and the technological capability of North Koreans to strike the US mainland, why would Americans risk themselves in order to protect Korea? So it seems kind of natural that Koreans themselves, which I was surprised, I mean it pulls very high in terms of the number of Koreans wanting to have their own independent nuclear capability. Right, I mean I think there's a couple issues there to highlight. One, definitely the Trump administration threatening to withdraw troops is part of this insecurity, but he of course he wasn't the first president to do that and Jimmy Carter is often demonized because he was the first president to- This was a long time ago though. I understand. Yeah. Just saying that was still an issue when we were in Korea, people would mention that. And so I think there's always been a little bit of insecurity about the US defense of the Korean Peninsula despite the fact that we still have over 20,000 troops there, which I think is kind of hard for me to understand sometimes about the idea that, oh, the US won't help us if there's an attack because we have 20,000 troops there. So you would think that that would- Provide security, but I think it was the very recent thread of pulling out those troops that, I mean because you have to- It's just, yeah, it's all the uncertainty created by the Trump administration, that very clear break from all the other post-war presidents. This that may be Jimmy Carter around foreign policy and defense. Yeah, and I wanted to highlight to a previous interview that I did with David Maxwell. We talked about this possibility and he mentioned a couple of different aspects of this, more in terms of the US being able to bring back nuclear weapons because we had weapons on the peninsula for a long time. And if we brought them back, there's a couple issues that would be like where do we put them? Because there used to be a lot of bases where you could have, but now he said there's only a couple locations where you could even put nuclear weapons. And the other issue is the type of protest that you would see. So even though the majority support re-nuclearizing, there would be really intense protests and being able to handle those would be a big issue. Yeah, kind of similar to what Reagan dealt with with the position of nuclear weapons like in Germany. I mean, that triggered a lot of protests back in the 80s. But how does that fit in? Maybe I need to re-listen to your interview with David, but I know one of the outcomes from this summit was around the use of South Korean ports for nuclear submarines. Now, my understanding is that these submarines are armed with nuclear-capable missiles. Is that part of the defense of South Korea? So that's kind of like having that within the territorial waters. We're just part of that. So that doesn't provide the same confidence as having like land-based nuclear missiles on Korea itself. Well, it'd be interesting. I think it's really smart thing that the Biden administration did to take this action rather than try to put nuclear weapons on land. It doesn't fully solve the security concerns in the sense that it's definitely still the US president has to decide, of course, to use a nuclear weapon, but I think that would be standard anyway. If you're concerned about the troops withdrawing, then you still have the insecurity of a submarine withdrawing. I mean, I guess you always have that compared to developing your own nuclear weapons. So it'll be interesting to see if this is enough to kind of quiet that demand for nuclear weapons or whether that sort of sentiment will continue with the same popularity as it's had. But I think, yeah, I think the nuclear subs are smart and maybe necessary. I mean, basically what we're focusing now on North Korea is deterrence. And I mean, it's hard as it gains more and more capability, but that's really the only thing we know how to do right now without finding other tools to halt or slow down progress in North Korea. Right, yeah. Yeah. Now, I think it does make a lot of sense. And this is all everything that we're talking about is under this new Washington declaration, which essentially was the outcome of the summit. But I do kind of wonder, and it does seem like the Korean right already came out pretty critical of these measures and still pushing for an independent development. But in terms of what Yoon said at the outcome that they're still committed to the Nuclear Non-Proliferation Treaty that was seen as affirmation, because back in January, he'd essentially mused that, yeah, maybe it's time for the peninsula to develop its own nuclear capabilities. So it seems like it's at least right setting it. The other component of the Washington Declaration is the establishment of this nuclear consultative group. And it gives South Korea for the first time, I think, a central role in the strategic planning of the nuclear response strategy. But like you mentioned, it'll always be up to a US president to their discretion on the actual use of nuclear weapons. Yeah. And I'm going to bring up, there was this week, a Washington Post opinion column by Max Boot as a guest writer. And he wrote about how it should be a North Korean decision, whether they want to re-nuclearize or not, and the US shouldn't put any pressure either way on them. But I think I just want to state my disagreement with that, because I think the nature of the security relationship means that the US should have a lot of influence over whether South Korea decides to nuclearize or not. And it's a huge breach of the non-proliferation treaty. And so if you have another country, it's bad enough where we are seeing countries develop that technology, I think when it comes to mind India and Pakistan breach that treaty. But the more nuclear weapons you have, the more likely somebody will use them. And even though South Korea is an ally, it still would be a bad precedent to allow them to nuclearize. I'm not sure you could stop it, but I mean, definitely discourage it in every way that you possibly can. Yeah. And I think that's what these type of assurances are designed to do. But yeah, in terms of what are the response around North Korea, I mean, talked about it before, it's just an extraordinarily difficult situation. I thought it was interesting too that North Korean military strategy had recently changed to have first strike as part of their official strategy. Yeah. I think it's important to talk about this and emphasize this because in the US, we just sort of ignore North Korea, right? It's just there, it just keeps doing stuff, but it doesn't seem like a very powerful country. So we're not all that worried about it. I think it doesn't get attention in the news, but for South Korea, it's always a problem, it's always a thought on their mind. And I think the US should be a little bit more on our horizon. I don't know that this is a problem for the US too, even though we don't have a good solution to it. I think we need attention to it and I think we need to continue to try to figure out better solutions. I don't know what those are, but we need to try. We need to keep trying. Yeah. It makes it difficult given the current state of relations with China. Between that and climate change, these are the key areas where you need to have a working cooperative dialogue with China and that fortunately has not existed for all the reasons that we've discussed before. And I think China is now kind of turned to coal shoulder because I know Blinken and other state department officials have tried to kind of restart that dialogue that was frozen following the spy balloon incident, but are getting basically nothing in return. Yeah. And I think that's important because of all the rhetoric, which is so anti-China these days and it doesn't value at all the needs that we have to cooperate with China. And this is one issue that I think saying that China can solve the whole issue is wrong. I think China definitely cannot, but it's the issue China has an interest in and to really be able to handle the problem you would need to have Chinese buy-in as well. And the problem of re-nuclearizing North Korea can make the reaction from China make unification even more difficult, not wanting to have these on their border. I don't know. There's a lot of issues and it's really unfortunate that again, keep saying the rhetoric is only anti-China and doesn't really allow or encourage the space for where we need to cooperate. This can't be like a total cold war. Right. Right. So in terms of other issues, I found it interesting. I wasn't aware that South Korea had not provide any military support to Ukraine. And I think that was especially surprising given Yoon. He came from the conservative party within Korea. He's been very pro-defense, very pro-Taiwan as well. But it was really related to the fact that I guess based on laws passed by South Korean parliament or Congress prevent them from selling arms to two countries currently at war. So they provide a humanitarian aid, but this has been like a point of contention with the U.S. And it doesn't sound like necessarily that's good to move. Although again, another thing that came out of the leak was the fact that Yoon was considering providing now whether he has kind of the legal authority under South Korean law to do so. But it was another kind of point of contention. But it also made sense given the concern about North Korea and antagonizing Russia. Now Russia, of course, we know have been actually on the humiliating side a bit buying arms from North Korea. So actually getting artillery shells, perhaps funneled through China to North Korea, then to Russia, that's not clear. But definitely Russia has the influence and ability to create antagonistic environment with Korea. And then, let alone the potential Chinese reaction, which obviously they've been a bit more neutral on the Ukraine side. So they may not trigger that, but definitely from the Russian side that concern in that North Korea connection. Yeah, definitely. I thought that was interesting too. I'd heard about it a little bit before the summit, but it definitely came for a and just how important those munitions could be if South Korea could send them to Ukraine. Yeah. So yeah, so there's definitely, although there's more harmony in the relationship, there's definitely issues that they were not making a lot of progress in coming to agreement over. One of the big things is the semiconductors in that ban to on certain types of semiconductors. And while they were able to get deals with the Netherlands and Japan to support that, South Korea has refused to agree to those bans. There's also a related issue. China is some kind of investigation of my Chrome, which provides some of my conductive chips to China and saying they might banned them altogether. And the US wants the pressure South Korea to not fill in that gap. But given the importance of the semiconductor relationship, the dependency between South Korea and China, it's hard to see that they might not want to take market advantage. So it would be interesting to see how that gets resolved. But I'm not that surprised, although it kind of gets de-emphasized, but it's important that South Korea doesn't support the ban on these semiconductor chips to China. One thing that I know about the extreme dependence is when I, for one of my case studies, was just over the Thadmissile Crisis. And when China was using economic retaliation to try to persuade them to not allow the Thadmissiles to be built, they went after the economically, but they did not touch semiconductors. Right. And that's the one thing that would have really hurt South Korea is if they had banned imports of semiconductors from South Korea. But of course, they couldn't do that because they're so dependent on those same semiconductors. So they have a really interdependent relationship. I think I read that South Korea, it's like 40% of the market. Yeah. Yeah, no. Yeah, it makes up 40% of the export market for Korean semiconductors go to China. So yeah, it's a huge component, let alone the fact that, I mean, China overall is the largest trade partner for Korea, actually more than the United States and Japan combined, which I found surprising that is that big of a magnitude difference. I did too. I knew they were by far the biggest trading partner, but I didn't know that that was bigger than if you combine the U.S. and Japan. Yeah, it's a really significant relationship. And while South Korea is certainly an important ally that supports, like you said, defense of Taiwan and security issues, it has been pretty adamantly not going along with some of the aspects of the economic war in China. And again, when we have this thinking, this Cold War divide that you could have that between the U.S. and China, even you have key allies who would not go along with that. Yeah. So I think one of the points of contention also, because in terms of trade between the United States and Korea, obviously, semiconductors is an important area, but then electrical vehicles and batteries is also very significant. And as we talked about before under the IRA, it has a lot of protectionist type measures in terms of U.S. sourced raw materials, so our rare earth minerals to actually build the battery components, which has been biased against not only European allies as well, but also our allies in Asia. So this was a point of contention. I know the Korean Herald had an editorial prior to the summit calling for Yoon to push for some sort of either inclusion of those same sort of tax breaks that essentially U.S. companies get, or some otherwise economic incentive to, so you're essentially not getting this punishment. I think the other thing we're South Korea is concerned about is retaliatory effects. So if it does go along with the U.S., then China can easily, just like you saw, I guess, with the that missile crisis, although maybe that independence will prevent it. So I guess that would be an argument that maybe it's not as damaging as they anticipate if they do make a compromise with the U.S. around. Yeah. I mean, I think the concern is like that would hurt their economy really hard if China did that. Now, you know, my research shows it's unlikely that China would do that. China has the capacity to do that. Also, it's like important, I think also to note that a lot of these semi- conductor chips are actually built in China. So you have a lot of really important to certain locations in China, the amount of foreign direct investment and these huge factories that Samsung and others have invested to build these chips. So yeah, I don't think, but I can see why you'd be concerned when you have that grade of dependence on China. But like I said, I think sometimes we get overly concerned in that respect because China needs those semi-conductor chips. Like the problem is China can't build all these other things in their factories if they don't have the semi-conductor chips. Right. Right. So it hurts their export market too. Right. Yeah. But yeah, so those are definitely some important reasons. And going back to just where countries acting in their own self-interest. And for Korea, it doesn't seem to be in their own self-interest to follow along on the semi-conductor chips. And of course, they're mad about the EV aspects of it too, given that they're such a large car maker. Yeah. But I think one of the things that they announced, of course, this has been planned and part of the state visit was a number of big Korean companies. I think Hyundai executives attended the joint session of Congress where Yoon gave a speech, pretty rare honor. I was glad to see who's getting something because obviously his policies domestically have been pretty mixed. But in terms of aligning with U.S. interests, he's been probably the best Korean leader that has been in place since, I don't know, Park Chung-hee, maybe. I mean, the Koreans fully supported Vietnam 100%. So this is a very aligned alignment between the administrations. I want to know why we did not get invited to the state dinner because that state dinner looked amazing. Yeah. I saw it was when I was looking at the menu and it looked like some sort of Korean fusion with like Maryland. Yeah, I had like crab on the menu, but then it wasn't like a kimchi infused like crab or something. But it was, yeah, it looked pretty good. So the theme for the menu, because I saw this on the news, was that it was American with some Korean elements. Oh, okay. Okay. So it wasn't full on fusion. Yeah. It was just like each dish had just a little nod a little bit. Which is very, I mean, that's been the neat thing in a sense of our time in Korea is just seeing Korean kind of soft power slowly kind of make its way. And you see that, I mean, LA, that Korean cuisine and, you know, fusions with like Mexican cuisine was very common, but just every, everything had that little bit of Korean. So that was great to see. And then it was great seeing, so you apparently did a little bit of Nori Bong for during the dinner and sung some, a little bit of Don McLean's American Pie, which went over really well. And then, yeah, and then there were a couple in his address to Congress. He said something like, oh, well, BTS and Blackpink beat me to the White House. But, you know, I got to Capitol Hill first. It was just, and it was a nice little nod to just how far Korea's come and just it's at the soft power influence that Korea has now in the world is really impressive. Yeah, it is. I think when I, you know, when I told people I was going to Korea before, people just thought it was like this third world country that didn't have basic toilets or something. I don't know. But, but when we got there was, you know, like technology was very like stuff that we didn't have yet in the United States. And it definitely has been since then, people are much more aware of it through culture and. Yeah, and it's across the board. Yeah, the music, the movies, I mean, obviously the Oscar winner from a couple years back. Yeah, it's just really kind of impressive. And they were, they were nice nods about just the, yeah, the strong cultural ties between the two countries as well. But anyway, yeah, going back, so you had these businesses attending, but in that they announced a hundred billion dollars of Korean investment within the U.S. A lot of it incentivized again to have domestic production both on the semiconductor side and then companies like Hyundai with the, with electric vehicle manufacturing. Yeah. So, but yeah, it's, yeah, in terms of the other contentions, I mean, I think the lack of any announcements around the economic provisions just show how contentious the issues are on both sides that I mean, I don't think the Biden administration is reaching an agreement with Europe, which is probably first in line for inclusion in some of the IRA benefits. And it's just probably a non-selling point with the labor union constituents that obviously with him announcing his intention to run for re-election probably not going to happen till after 2024. Yeah. I mean, it's interesting because I think in that case if there isn't some sort of agreement, you might see retaliatory measures on the part of Europe and Korea, maybe Japan. Yeah. Because this is a very serious issue for them. And to be so protectionist about it is kind of a dangerous precedent, I think. Yeah. Yeah, exactly. I think that pretty much covers that summit. And then, you know, something that I didn't know very much about. And so I thought it was important to have on this episode was about the fighting in Sudan. So yeah. So we saw from the news over the last couple of weeks, fighting broke out on April 15th between the Sudanese army and a paramilitary group called the Rapid Support Forces. So just to provide a little bit of background, and I'll be honest, I didn't know a lot on Sudan before looking at this in detail. So Sudan is actually a country of 49 million, located just south of Egypt and borders the strategically important Red Sea and the Horn of Africa. So since Sudan's independence from the United Kingdom, which actually had sort of joint control with Egypt, Egypt, of course, being under the control of the United Kingdom as well, both of them agreed to Sudan's independence in 1956. But unfortunately, since then, the country has been had considerable unrest and actually has the highest number of coup attempts of any African nation. Now, looking at the recent history in 2019, the country had a democratic revolution, the first of its kind for the nation overthrowing the pretty brutal dictator Omar al-Bashir, who was the leader, I think the last time Sudan really made the news is around Darfur. Of course, a brutally horrific civil war that occurred in the early 2000s, the conflict displaced about two and a half million and killed over 300,000. So in this 2019 revolution, essentially, you initially had a civilian government takeover in joint control with the military. And during this interim period, the government was led by Abdullah Hamdok, who was selected as the prime minister by the main democratic party, the forces for freedom and change. And during these two years, there was a lot of hope that Sudan would be able to turn the corner to transition to full civilian rule and really make strides. Now, one of the things that we've talked about in terms of economic support for African nations that are struggling is the amount of reforms that are typically required for IMF loans. So in 2019, this is still kind of the policy. So they did have to go through pretty strict economic reforms, but they did actually qualify for IMF support. But part of that is dealing with more transparency and corruption issues. So this interim government sought to bring a lot of the military business interest under civilian control. Now, I didn't go into details on the background of that decision, but I think that may have been one of the key reasons leading to the overthrow of this transitional civilian government by the two forces that we mentioned at the beginning of this piece that essentially are now fighting each other for control of the country. So you had the main army of the Sudan, the SAF, and then this peer military group, the RSF. They overthrew the transitional civilian government back in 2021. They've made a lot of promises to foreign governments, including the United States, that they were planning on having a transition government. So they've received support still from the United States and other Western democracies, essentially taking the word that this would eventually lead to these reforms. However, April 15th, we saw the fighting erupt and essentially was around disagreements over how that power sharing would look, what the timetable would be to transition to a civilian government, and also, I guess, disagreements around the integration of this peer military group into the regular army, the RSF. So essentially, this is a conflict by two generals who are seen as the effective combatants. So General Abdel Fatah Baran is the leader of the Sudanese army, so the SAF, and he's effectively been the country's leader since the overthrow of civilian rule in 2021. He was trained in both Jordan and Egypt and is strongly supported by the Egyptian military, which of course also controls Egypt after their own coup back in 2013. The other side, the RSF, is led by a general Muhammad Habdan Dagalo, and he was part of the Arab Genjaweed militia, and that's been accused of committing a lot of the atrocities during the 16-year war in Darfur. So he's actually wanted by, you know, for these crimes, because he was more or less the right-hand man of Al Bashir, who, you know, he ended up betraying, but, you know, conducted a lot of these horrific operations. Now, the RSF has support from one of Libya's rebel groups, the UAE and Saudi Arabia, together with Russia. So again, we talked to it last time in kind of Wagner's international escapades. So this is a region where they're very active. So the Wagner group is looking to supply them with the RSF, with surface-to-air missiles from its stocks in the Central African Republic. It sounds like Wagner has quite wide latitude in its operations, because it's running training camps, it's running weapons, and essentially this is kind of their main staging operations. And in fact, it was kind of interesting reading that the Wagner group wants to overthrow the government of Chad. That was something revealed within the leaked documents as well. So they're actually getting paramilitary from Chad, bringing them to the Central African Republic and training them there. So you just have this whole, again, the whole region very unstable, very economically struggling countries. So the concern about this conflict now that it's broken out is that it has the potential to destabilize the wider region, which obviously because it passes through the Horn Africa and the Red Sea, very critical trade routes, critical energy trade routes coming from the Middle East and through the Suez Canal. So there is great concern here. So essentially, most of the fighting has been focused on the capital city of Catorum, where about 400 have died, but another three or 4,000 have been wounded. But the greater concern is that the Darfur region again could erupt into full conflict. So people within the capital, a lot of them have already fled or they remain isolated in their home, in which case, you know, it's concerned just getting medical care, food, basic supplies to them. About 20,000 have already fled to Chad, again, a country that doesn't have the state capacity to take that much. And actually several thousand have fled to South Sudan. So South Sudan is actually the, I think, the youngest nation state in the world. It was formed in 2011 following the Civil War in Sudan and really represented kind of the split. It's mostly African, while Sudan has kind of Arab ethnic background. Sudan, obviously Muslim, and then South Sudan, Christian. South Sudan is a nation about 12 million, but also very unstable, certainly doesn't have the state capacity to support any sort of refugees. So it's really just this kind of tender tenderbock of instability. So there's the concern, obviously we saw the US embassy have evacuated its personnel. A lot of other embassies of the major powers have also pulled out people. I know Blinken is heavily involved and spoke to both the generals, but the consensus is essentially neither one of them have an interest in negotiation. So it really seems that it's going to be hard for the US or other partners to effectively intervene. So as you might expect, there's a serious humanitarian crisis that comes out of this conflict. As you said, it affects all the different countries surrounding it, and most of those are unstable themselves. So so far, 400 have died and thousands have been wounded in the capital city. But the biggest thing is how many of them have had to flee. The ones who stay have to be forced to remain isolated at home. And basically hunger is a big problem because they have to wait for lulls in the fighting to be able to go out stock up on food to what extent that they can. Medical resources are hospitals have been shut down. So there's not much in the way of medical resources either inside the town. One concern that happened this week that I know that attention is hugely concerning was the seizure of a lab that had measles, polio and cholera isolate so easily able to spread those or what are the security measures being taken to prevent those leaking out of the lab and starting those outbreaks. So people have had to flee. And as you mentioned, 20,000 have fled to Chad, and then several thousand to South Sudan. I actually had not, I didn't know South Sudan existed, I confess. And so it makes sense that it came out of that civil war. 75% of those citizens of the 12 million citizens who live there rely on humanitarian aid. So it's not a self-sufficient country in any manner. So when you add, you know, thousands of refugees, you already don't have enough food to feed your people and stuff. Then it's destabilizing and certainly from the international community requires a more intense humanitarian effort in that area. I think it's important to understand why this region is so critical. Sudan is very resource rich itself and has a large trading relationship with China. You have, you know, gold mines, which the Wagner group is largely in control of. So the idea that, you know, Sudan is not isolated and this region itself is pretty important to global interests. Some other things that I read were water is an issue from coming from Ethiopia into Egypt and Sudan. So fighting there disrupts the idea of an agreement of water sharing between Egypt and Sudan. That it's so, you know, that it borders Egypt itself is significant. They said if the fighting were to spread into all these other countries, you know, Ethiopia and Atria had a very long civil, a decade long civil war, that region is not completely stable either. Sudan is like completely surrounded by other than Egypt by countries that are unstable and struggle to have resources to maintain their populations even though they are actually very resource rich. Yeah. Yeah. No, it's definitely an area that's, I mean, it's interesting. Yeah, to see in the number of different interests that regional powers, major powers have in terms of, you know, a lot of it is around kind of resource extraction, but also, you know, the preventing of collapsed states and these becoming hotbeds or extinct sponsored terrorism. Under Al Bashir, the U.S. had actually labeled Sudan as a state sponsored terrorism. And that was something during the civilian control period that they really had the lobby to get taken off of that list. So it's definitely something, you know, from the U.S. perspective, from your perspective to ensure at least stability that it doesn't become a completely failed state. So if they had to pick sides, I'm thinking that the side of the Sudanese government as opposed to the RSF, which seems closely aligned with Russia, with these Libya terrorist groups, it certainly represents, you know, just a further expansion of the Wagner power base within that part of Africa, you know, if it does become a failed state and the RAF essentially succeeds and taken over the country. Right. I mean, I think the Wagner group, it's just very interesting. More as I get a picture of what it is and what it does. And it's not surprising that the RSF has those Libyan allies because that is where the Wagner group is also particularly active in. So just the way that they run that, and like I said, it owns many of the gold mines, that's what it has gotten in exchange for providing security protection to the government. And just as a staging ground for their own forces. So I think it acts very independently of Russia and is really its own sort of organization that I don't think we normally think about that in our discourse because they're not a terrorist group, but they are this like really important military organization. I don't know how exactly you describe it, but. Yeah, I mean, almost like a corporatized mercenary group. Yeah, I guess mercenary group makes sense. But yeah, but in a corporatized one, not in the way that we normally think. Yeah, but not the same as, and of course they changed their name, not the same as like a black water, like the US equivalent because the US is much more, I think, regulated than the Wagner group, which is, again, we talked about before trying to position itself for real power within the Kremlin as well. But yeah, it's definitely a free-wheeling mercenary group. Yeah. Yeah, I think another thing that really jumped out at me when I was reading was that, you know, we talk about there are stuff being a paramilitary group, but they have 100,000 troops. So I guess when I hear paramilitary, I usually think of a smaller number of troops, but 100,000 is a lot, and is why this civil, this conflict is probably so terrible and will be so terrible because that's a, that's, you know, a lot of troops to be able to wage war with one side. Yeah, it's not dissimilar, although probably the scale is larger than what you saw in Colombia with the use of right-wing paramilitaries to carry out, you know, the majority of the more, more undesirable kind of activities that Al-Bashir wanted to carry out. I think also... There were 100,000 of them? What's that? 100,000? Yeah, no, I don't, yeah, again, the scale I think is larger here in Sudan than... Yeah, that's what I'm saying. Yeah, but I think it's similar use of the troops during the period because they use the paramilitary to carry out, you know, basically war crimes against FARC within Colombia. Here, they also use the paramilitary to carry out the war crimes against rebels and Darfur. And RSF was also from that region, so they were seeing, I guess, maybe to have better intelligence of operating the area as well. Yeah, I mean, they obviously had a complicated relationship with the state and that these two sides were allied but just had these disagreements over power sharing. I mean, obviously serious disagreements since they're now fighting. And, you know, we talked about all the terrible consequences of this conflict, but there's not any sign that anyone knows how to end it. And like I said, with the 100,000 troops, that gives you a very long time to wage war. Yeah, 100,000 troops, both sides having sources for arms coming in, having foreign allies essentially bringing in arms. So yeah, it just seems like it's set up for a prolonged conflict. And I got to go back and something I would like to dig more into is it has to be related to some of the business economic reforms and the fact that I'm sure all of the wealth is being tied up. I mean, who's giving out the mining leases to the Russians, probably, you know, RSF officers and things that are enriching themselves. And that was something. My understanding is that the main Sudanese army was more aligned with the civilian leadership in transitional rule. And so I got to help but think, you know, that some of it's got to be related to those reforms and the loss of power, even though the RIA, even though they were promised to become integrated into the regular army. But I'm sure yeah, the benefits they get as a paramilitary group, especially for the top level officers, economically, weren't very attractive. I'm sure it's got to go down to the economic incentives. That's a lot of our. Yeah, so it's discouraging and seeing sort of an end in sight for this fighting between these two groups. And then like I said, the possibility then they have of a totally destabilizing the Dufoura region, Chad, all these countries surrounding it, which have their own history of instability. So on this week's segment, Changing Tides, we begin with a speech on April 20th, where a secretary of the Treasury, Janet Yellen, gave a speech on U.S.'s economic policy towards China. Many were disappointed seeing this as being too soft on China and stepping away from the harsher and some believe more realistic perspective on the challenge China presents to the United States. This is based on statements like, we seek a healthy economic relationship with China when that fosters growth and innovation in both countries. A growing China that plays by international rules is good for the United States and the world. Also, but we do not seek to decouple our economy from China. A full separation of our economies would be disastrous for both countries. It would be destabilizing for the rest of the world. Rather, we know that the health of China's and U.S. economies is closely linked. And finally, as we take these actions, let me be clear, these national security actions are not designed for us to gain competitive economic advantage or stifle China's economic and technological modernization. The general sentiment of our speech was that the U.S.-China relationship is not zero sum and that we are not trying to constrain China's growth. So what did you think? Yeah, definitely compared to other policy statements, especially within the last year or two from the Biden administration. It was a lot more dovish. It was a little bit more felt tonally, I think, especially around the parts that you led about on the healthy economic relationship with China, when that fosters growth and innovation in both countries, even though a lot of what's been framed for the CHIPS Act, for instance, is around stifling innovation within China, specifically around strategic goods. So I think it felt a little bit like a throwback to earlier administrations, ones that were still optimistic around the liberal project around free trade with China leading to reform. That being said, that was only the beginning of it. I think you will rightly point out the fact that it's still very much focused on national security and those concerns, that it's not these rose-colored glasses of the 1990s and early 2000s. Right. So you can choose to focus on the statements I made, or you could choose to focus the many times she talks about that China's not playing by the market rules and why that's a problem and why that cooperation can't happen unless China has true market reform. Also, on the national security point, what I think is really important is that she mentions in this speech national security 14 times. So in contrast to our later discussion on Jake Sullivan's economic speech, which only mentioned national security 12 times, this is significant because of course, Jake Sullivan is actually the national security advisor. So certainly the speech did emphasize national security concerns. It just depends on what parts of it that you want to emphasize. She definitely talked about that and human rights and pressing China on its unfair economic practices and the concept of friends joining. Right. Yeah. No, absolutely. I think it's probably just a symptom of how far downhill the relationship between the United States and China has become that statements like healthy economic relationship and cooperation around growth and innovation can sound so dovish and out of tune with the current environment in Washington and probably led to that reaction. I mean, I know she also went into detail on the areas of cooperation, but again, none of it really shocking. The stuff we've talked about on the podcast before, one was around debt relief for developing countries and then climate change. So yeah, that part I feel like we've seen in a number of different forums, but yeah, I think it's just the fact that there can be a healthy economic relationship with China period that that seems like a revolutionary. We're a naive statement now. Yeah. I mean, and again, she certainly makes it conditional on China's unfair economic practices, which then in which case you could say, well, then really, we don't expect that. So we don't expect this kind of economic cooperation. But I think she was trying to say that there still is this potential that we can't just make China out to be the evil empire, but maybe we can't play with it necessarily under the way that it's approaching market structure and certainly national security issues. Jake Sullivan also talks a little bit about the problems with the debt and the poorest countries and climate change, of course, but in a slightly different context. I think that in some ways, the sentiment may sound more dovish, but the actual practical steps that she discusses are very much in keeping with our current policies. Where I think people thought it was naive and kind of something we haven't heard in a while, something that I like in Yellen's speech was the emphasis on American economic strength. And so instead of what we'll see in Jake Sullivan, who points like pretty much at it, apocalyptic picture of America's economy, she emphasizes that it's long term economic strength of the United States. She says, it's important to note this pronouncements of US decline have been around for decades, but they have always proven wrong. This time will be no different. And the economic statistics show why. And then she also mentions that China's economic growth does not have to be incompatible with US economic leadership. And basically, well, she goes on to say, the United States remains the most dynamic and prosperous country in the world. We have no reason to fear healthy economic competition with any country. Yeah. So I mean, I'll push back on the kind of the statement of US decline. I mean, there's plenty of pronouncements about that. And it always comes from economists or the corporate elite. And it's really driven by the fact and Sullivan addresses it. Yeah, globalization has been absolutely fantastic and aggregate and definitely from an economic statistical standpoint. But as Sullivan points out, the distribution of that wealth has been far more unequivocally. And that's why you've seen such a huge increase in the share of national wealth going to the top 1% of the country, while more and more of the middle class has been hollowed out as a result. So... But is that a problem with the economic approach? Or is it a problem of redistribution? That the fact that we have not, you know, we've lowered taxes on the rich and we have not tried to redistribute from those who benefit the most to those who we say we're leading leaving out. Yeah. I mean, they're linked together is the problem. I think in an ideal world, yeah, if you had a responsive representative government not controlled by the elites, the 1%, then you would have the chance of having what are very popular democratic policies of redistribution of the gains of trade. Because definitely from an economic standpoint, there's no doubt that globalization has delivered enormous benefits to the United States. But because that distribution system is so politically fraught that in reality, I don't think you can really divorce the two. I mean, I think to say it's a little naive to say that trade wasn't... That trade in some of these economic aspects don't always create inequality. I mean, that was certainly true before the world or two era. It's unless you have policies that are very focused and concentrated on redistribution, then no matter what kind of economic you pursue, it's going to lead to inequalities. Whether you have China with the state economy still has a lot of growing inequalities, or you have the U.S. market driven economy that is driving toward inequalities. It depends very much on the sort of domestic policy that you pursue. Right. So yeah, I definitely think that's part of it. But then obviously, Sullivan coming from the national security angle is also how vulnerable do you allow your supply chains to become in critical technological areas and critical emergency response areas? He went a lot in his speech about kind of the shock and inability to source basic things like masks at the beginning of the COVID response or in other countries about their own kind of lack of manufacturing capability for mRNA and that kind of hindering global recovery. So I think the, yeah, he spent part of the time emphasizing, which I found actually pretty shocking, that you had somebody within the Biden administration, which a lot of people call kind of the Obama Biden administration, somewhat of a shift from clintonianism of full embrace of free market liberalism. But to see them essentially sound like Buchanan, like Trump, essentially conceding that, yeah, yeah, that you guys were right. You guys that were complaining about allowing China into the World Trade Organization about this just pursuit of trade exclusively where the whole point of trade agreements is to lower tariffs. And that was kind of the end goal. But just to, then I think, I think a lot of good points, honestly, but a lot of the things are just not true. When I feel like you're truly shifting the subject from, okay, you're shifting from whether America's economy is strong and should we be confident enough? Yeah, economy, very specific issues that I think talking about supply chains is not talking about American economic strength. Well, yeah, that's because the, I mean, it is a complicated issue. I think he definitely struggled because it's marrying a bunch of different concepts together. I mean, that's why he kind of made the joke. He's going to the Brookings Institute, he's giving a speech about the economy, about economics, but he's a national security. Let me introduce the speech since we switched over to it. So on April 27th, National Security Advisor Jake Sullivan gave a speech on Biden's international economic agenda, which some have begun dubbing the Biden doctrine. The speech was much better received than Yellen's and seen as a return to the direction most want to see. Interestingly, because Sullivan did not speak much about China or national security, but instead he was emphasizing Biden's foreign policy for the middle class. So first, I just want to bring up like, does it make sense that the national security advisor is giving the speech? And as part of that, while I'm not completely convinced that it needed to be the national security advisor, I would like to go back to all the academics and scholars who told me over the years that these economics dash security are totally separate realms. And the fact that you have a national security advisor giving an economic, unquestionably an economic speech kind of just proves that. Well, yeah, I mean, I think this was the, I mean, as if, you know, the CHIPS Act and IRA wasn't signal enough. I mean, this is the announced doctrinal return of industrial policy as an official thing. I mean, I think the speech can be seen as that. I know. What I'm thinking though is like, is it just because traditional like commerce and even trade and these other economic institutions are not fully on board with industrial policy, that you had to have the national security advisor talk about industrial policy? Because by all logic, it should be an, it's an economic program or at least it's supposed to be an economic program. And so why don't you have someone on the economic side talking about the shift to industrial policy? Well, yeah, but I don't know if it's ever been, I mean, you were wanting to talk the question on this, but in my mind, industrial policy always has had like a national security aspect to it. I mean, because I know he went on to the defense that you're not really picking winners and losers, but you are picking industries that are strategically important beyond sheer economic competitiveness. I mean, these are done for national security reasons, or at least if you use like the example of World War II and, you know, which industries are, I mean, this is to feed the military industrial complex and to ensure national defense. You can argue that sometimes it is about national security, but you can argue a lot of, if you're just talking about jobs in the middle class, you have to work pretty hard to get that, to being about national security. Yeah, I think, I mean, I think he was trying to have it both ways. But certainly, I mean, the CHIPS Act is framed sure, it is framed, especially with the domestic sourcing requirements as a, you know, domestic, encouraged domestic employment and investment in jobs. But it was also framed as this is what's needed in order to diversify our supply of CHIPS, given our vulnerability in Taiwan and Asia, given the Chinese threat. He talks a lot about, like, renewable energy, and obviously that was a big focus of the IRA. And, you know, how strategically important is it that solar panels are manufactured in the United States? We're a friend short in another country as opposed to China. I don't know. I mean, that's sort of keeping with why challenged about this industrial policy being about national security and just industrial policy in general. Yeah, there's certain things on the IRA. I mean, I think the primary focus has been on the semiconductor, which I think is the correct focus in terms of if you're going to focus on one thing for national security, that this is really a key component of advanced weaponry. Semiconductor chips. Yeah. Right. That's just one part of the policy. That's just one industrial policy. Right. Yeah. That's why this stuff with the IRA, and there's been a lot more pushback, I'd say, from foreign partners on the IRA as well. Yeah. So I wanted to go step by step sort of and what the challenges he identified and then the steps that he thinks that we are addressing these challenges. And so the first is that the industrial base has been hollowed out. There was one assumption he said, at the heart of all this policy, that markets always allocate capital productively and efficiently no matter what our competitors did, no matter how big our shared challenges grew, and no matter how many guardrails we took down. So I mean, this is something that we talked a lot about in my class on industrial mobilization and just that we don't make as many things as we did before. On the other hand, we have turned more to services and we excel at design. Now, the argument that Jake Sullivan and others push forward is that not manufacturing hurts our ability to innovate. But you can certainly argue that it does not hurt our ability to innovate and design. I mean, because we're the one designing the new chips, we're the ones who are designing the latest iPhone or whatever. And in many other high information technologies. Yeah, yeah. I think I missed that part of the speech. Yeah, I don't think innovation and manufacturing capacity are really related at all to each other. It's more logical kind of the whole, this whole middle class, foreign policy for the middle class that the one thing that you can't deny is that the job opportunities for people with like high school education or associate degree have been shallered out considerably compared to the kind of peak industrialization period in the 1960s and 70s in the US. But to manufacture competitively, you have to rely very much on technology and robotics, which is important because Sullivan talks about the China shock in hollowing out manufacturing. But a lot of economists attribute it more to technological advances and going more to robotics instead of using people. And the people that are being used need to have high degrees of math, which most of these people that are talking about used to work, could work in a job and not need math skills. And today you do. And they're graduating from high school without the needed math skills. Yeah. Yeah. Now, I think that's an excellent point and something that Sullivan ignored. And again, a bit shocking in terms of the concession, essentially to a very, again, very America first Trumpist argument on the reasoning behind these things, that China exclusively is the one who hollowed out United States manufacturing instead to your point that a lot of it is about automation and technological advancement. And never mind the fact that, yeah, it's simple, yeah, it's the simple economics of it, of the cost of labor being a lot more in the United States that even if it doesn't go to China. Because we've had all this economic success, right? One of the interesting things from that economist article talks about translated wealth for its people and how income in America was about 24% higher than the EU in 1990. Today it's about 30%. It was about 17% higher in Japan in 1990. Today it's 54% higher. I mean, these are things that lead to high labor costs as well. Because for people to be... Yeah. But again, I think that goes, I mean, you can do a lot of things when it's in aggregate or the median or whatnot, but it's the distribution of that wealth. I think... And labor may be more expensive than Europe and Japan, I think, even. More expensive than Japan or Europe. I would be surprised after you layer in all the additional benefits. And I would say if it is, it's an outcome of only the last three or four years where you have seen extreme wage growth, particularly in the United States. If I can figure out where to find these numbers, we'll have to have a follow-up on this. Because I think that would be really interesting. Yeah, it would be interesting. I would be shocked in Western Europe. And remember, most of all the manufacturing now is taking place in southern states. And that was done because of very lax unionization laws and wage rates. So I can't imagine that anywhere in the new industrial heart of the United States and the southeastern United States, that that's not the cheapest labor compared to Western Europe or Japan. It also makes sense because companies have to foot the bill for healthcare to the extent they do, where they don't in Europe. Oh, for a reason it being cheaper. Well... Salaries overall are much lower in Europe. Now, I don't know... It is true. They are much lower....the manufacturing. And that's what I want to look at the numbers for. It may be pretty similar with southern state salaries in Europe. Yeah, it would be interesting to see. Yeah. So anyway, that would be fascinating numbers to look up. And to be able to have that as part of this conversation. I want to say, you know, because a lot of times I just present this one sided argument, I think there is a case that you could say making things are important and bringing back some manufacturing. But I think we had to talk about the reality of how you do that. And I don't think we're being very honest about it. You either have to have technological advances to make manufacturing with less people and more automation. Or you subsidize the industries. But then that leads to less economic efficiencies for those companies. And they rely more on state subsidies and lobbying the government than they do in terms of innovating competition. Yeah. Yeah. I mean, that's why I think in reality, the idea of French joins a lot more robust concept because you can have full acknowledgement and use of areas of competitive advantage in terms of labor cost. Because I think, honestly, all, sorry to interrupt. A lot of these jobs that leave China, they should just come back to Mexico. Because I think Mexico is the logical place for manufacturing for North America. And Sullivan talks about French O'Rourke, but do we have any policies whatsoever that encourage French O'Rourke? Well, you know, that was interesting because I don't know if you got a chance to listen to the Q&A session for the Brookings, but a lot of it was focused on the realistic next steps and why this is appealing or not appealing to developing countries around the world. Because we've talked about this before. How can you have this foreign policy for the middle class, for the American middle class and all these protectionist policies, but then say at the same time, oh, yeah, well, we're open for business and it's not just, you know, our democratic allies. We want everybody on board and we, you know, we want everybody to become, to look after their own interest as well. And he uses that example around the mRNA facility. He was saying, oh, yeah, well, you need to encourage you to build, you know, your own production facilities and your own. But it was a lot of, I mean, it came across as very kind of hand wavy. And again, that these two ideas are kind of in conflict with each other in the first place. Right. We have to look at what the US policies have been so far. And the two major policies, which he refers to and that we can think of is the CHIPS Act and the Inflation Reduction Act, which gives subsidies really benefiting either American companies or for these companies to build in America. And our partners are very angry about this. And particularly over the subsidies that go to if you buy an electric car, but just to ones that are made in America. So we don't actually have any policies. That have implemented venturing. Instead, we just have what we've done so far are things that have angered our supposed allies. Yeah. And to be fair, I mean, I think he addresses and talks about the IRA being kind of jumping off point and that they are in talks with allies on the expansion of these sort of programs and their eligibility around these things. He says a lot that we're talking to our partners about this and that. I know. That means nothing. The nature of it too. And it is very early stages yet. But yeah, it is a lot of very bold pronouncements, but very little proof and substance at this stage. Right. All the proof was like we're talking to our allies about this. Right. So this is proof that we're pursuing this middle class policy with allies. And just because you're talking to them, we've been talking a lot for a long time about this IRA inflation reduction act, and we still haven't come to any satisfactory agreement. Even on the semiconductor export controls, we still have South Korea on board, which is important because they're... Right. But they have gotten the Netherlands on board. They've got Japan on board. So they are showing progress over time. I think these negotiations take time. But they... I mean, that's still limited when you don't have South Korea on board. And they actually... Yeah. They were making a lot of progress there. Yeah. You're right. And they have the ability to make up for whatever America is not sending. Right. And this goes to the whole problem with both yelling and solving, talk about these export controls for national security. It's a good thing. But I was at a talk on Friday at NDU by one of my colleagues, Mark Fallon, and he points out how export controls are also being used as industrial policy. So you say national security, but it's also part of industrial policy, in that we're going to make more in the CHIPS Act in the United States. And the inherent contradiction is that for export controls to work, you need buy-in from your partners. Yeah. You need buy-in for a lot of countries. You can't... Export controls do not work if they are unilaterally, if you cannot get a very large buy-in. But when you do it as part of industrial policy, you automatically then keep those countries from wanting to buy-in. Yeah. Yeah. I mean, I think that was always the contradiction within the bill. And I point to the political realities of getting anything through a divided Congress. It's the fact that you have to appeal to certain constituencies, and the only way to get enough... The handful of moderate Republicans and then the more moderate Democrats on board is to appeal towards that labor union jobs aspect of it. And that was always going to be a bugaboo for selling it to allies abroad, is you can't have this transformative policy around climate change and climate tech and isolating China while also being protectionist. You can't have that friend showing unless you offer your friends benefits as well. And that's where it remains to be seen. I think they recognize that gap, and I don't know if they were surprised by the pushback from allies. Obviously, and again, it's domestic policy, so there's no obligation to shop the thing with your foreign allies before. But obviously, they have a lot of work to do, and I think they recognize that. But how there's an inherent... There's an inherently built in structure. How can you overcome it, right? Yeah. Yeah. If you're saying that you have to get domestic support by giving these domestic favoritism at the expense of other countries, then it seems like it's inherently going to make export controls and measures like that less effective because you're going to anger allies. I don't see... You can talk all you want, but no one sees a solution, right? He didn't suggest that there is a solution to this, and I don't think that there is a solution. I think the fact is, if we're truly concerned about national security, then we would have to emphasize French-Waring and de-emphasizing industrial policy in the United States. But as long as we're maintaining both, then I think that is not going to be an effective national security measure. Yeah. And I think it's difficult on the political side because Republicans have shifted so much away from traditional Republican policies, which were typically towards economic liberalism and free trade, towards a populist stance. So again, it's interesting seeing Sullivan basically concede that point. But then you are very much committed to defending that point because you're not only being attacked from your left flank within your own party, but now the party on the right has adopted this populist platform that makes it difficult to retreat from those points as well. So I think, yeah, politically, it's become even... I could see where, okay, you want to have them reformed to the IRA bill at some point down the line, but now it's like, where's the political path for that going forward? I agree. I don't see it. Yeah. So the problem is, in this speech, there is this strong assumption that you can have industrial policy that also benefits our national security. But when I... Despite as many groups that you have for talking, in reality, you are limited in your national security goals as long as you have industrial policy. Using industrial policy in the sense of benefiting exclusively a nationalist policy that benefits your workers. Well, industrial policy kind of implies nationalism. I mean, I've never heard of industrial policy that encourages French shoring or... I mean, it would require us... Think logically, you're talking about less labor in Mexico. So it would require to truly pursue French shoring, which we say we want to do. Well, what is it then a more limited form of free trade? I mean, it's like a more limited... It's still multilateralism, but it's selective multilateralism. Instead of negotiating on a global scale, you're negotiating strictly with your allies. But I mean, what are you negotiating with? Because if you're saying we're pursuing industrial policy, that only leads them to encourage their own industrial policy. And then none of this benefits, ultimately, if you're saying this is our challenge with China, if we want to solve these problems, we need to work with our partners and allies. Right. Yeah. I mean, that's the confusing part is Sullivan's basically saying, yeah, we want other people to pursue these same policies. And it does leave you thinking, like, well, where does that lead to when everybody's pursuing their own? And he goes on, he's like, we're not trying to pursue autarky. We're not trying to pursue where we manufacture everything. But then it's also saying, oh, yeah, we want Europe to have a similar industrial policy around. But then how does that all gel together? And it just doesn't become however you want to divide it. And to, I mean, yeah, it's basically autarky around these certain key technological, wherever you're focused your industrial policy. But do we really want our friends and allies to have industrial policy? Do we want them to encourage their own auto manufacturing by leaving out, you know, U.S. companies from subsidies and things like that? I mean, we can say we do, but we absolutely, it's not in American interest. And we don't really want them to do that. So, I mean, it's a platitude. Yeah. Yeah. And I mean, I think there were good points and there's stuff that we have to follow up on, but it definitely sounded like they recognized kind of the shortcomings of this. But what this looks like in terms of a reshaped economic system or a period of cooperation or whatever, however you want to view it, it hasn't been fleshed out. Because on the surface of it, yeah, it looks like you're heading towards around these key technological areas. Unless you can get certain limited agreements, like we've seen with Japan, the Netherlands, then I can't help but think, well, yeah, if you're encouraging everybody to have these same policies, then it's just autarky, which everybody loses in the end. Right. It's terrible. That's why protectionism itself is considered a bad thing. Because if you start closing economies, then everybody loses out. You can say the gains are not being redistributed the way you want. And a lot of that has to do with domestic policy. But if you go to autarky, you lose out those gains period and everybody loses, including your middle class. Right. You don't lose. It's not just the rich you start to lose money. As I said, inequality is more of a function of our tax policy and other measures than that, than it is whether we have trade or not. Yeah, of course, that's true. But maybe it is the frustration around just how dysfunctional our representative government is and the fact that it is 100% captured by elites, that you can't have the necessary reform for redistribution of up to some gains. I get why it's not political reality. I mean, there's great art policy. So what is the one thing you can do is around trade and things you can do with executive action or stuff that you can frame as against China or whatnot, while the real core of your problem is too difficult to solve. But then it can create the same kind of problems that you're trying to address, right? Because if other countries move to greater protectionism, then those limit, those hurt your middle class, right? I mean, the people who then lose out are the very middle class. You're saying that you're helping. Yeah. And high tariffs. I mean, who does that hit the most? The middle class? I thought Sullivan did a good point of actually laying out in context that the amount of tariffs that we do have on goods is very low. It wasn't on average like two, two and a half percent or something like that. So even when we're talking about it, and even with the 25% tariffs, right? That's on all Chinese goods from the Trump administration, the overall tariffs and protectionism within the United States is still remarkably low by historical standards. It is. I mean, you can say that globally. So this is an interesting point to where, and it could not emphasize it more, where he said, we are not pursuing trade deals so much anymore. We're going to focus on bilateral investment and such. Now, the problem with saying that trade agreements are just about tariffs is that they're not just about tariffs. They're right. He's right. Tariffs are very low, but only in certain goods, right? I mean, developing countries want greater access to the US market. There are things where they cannot sell their goods at a competitive price because that we are either putting too high of tariffs on them. We're not, you know, or just not giving them access to those markets at all. And that's what they want very much. And that's been part of the real tension between the West, EU and the US, and the global South. So the things that they want, we can say, oh, we're giving them this, but if that's not what they want, then what are we doing to include these countries in an incentive to follow our lead on China? I mean, China is expanding its trade deals. I mean, that's also really, it's making trade agreements. It's making trade deals. And we're saying that's off the table mostly for us. And trade agreements have a lot more to do than just tariffs like the newer ones do. They go more into investment, rules, and things of that nature. But importantly, like I said, determining access to markets. I mean, ideally, you have like every country, the longs to the world trade organization, you have, you know, most favorite trading nations, so they get the same tariffs as the best country does. But as you've seen with China, I mean, you can, there are tons of exceptions to that. So it's not actually equal the way that we say it is. And the type of goods that developing countries produce like agriculture are things that the US and the EU very much protect. Whereas China offers a market for them to sell those goods, because China needs agriculture. Needs this raw, yeah. So I think that's a very big problem and really hurts again our strategy towards China. And then trying to, you know, if we want to influence, if we want power to be about influencing the decisions of others to go in the direction that we believe benefits us, then closing off trade deals closes off a really important tool of doing so. And when you talk trade deals, I mean, you're talking more the multilateral things that would need to be approved by Congress. Or even by trade deals. So if it's bilateral multilateral, that means all of them. None of them can be approved solely through executive action. Well, so there's the political realities of it. And that's the political reality of China. But he's not saying just political reality. He's saying that this is policy. So it's not like, oh, Congress is constraining us. This is intentional policy we're pursuing. Well, yeah, but in reality, I mean, we all know that it's because Congress is a dysfunctional and trade is dead on arrival. But he's trying to make a consolidated case for foreign policy for the middle class. And he's saying things like trade hurt the middle class. And thus we are not going to consider going more in that direction from more trade agreements. Well, I didn't, I mean, I didn't get that picked up that it was that it was an out and out trade. All the trade agreements are bad for the middle class. But trade agreements with abusive powers like China was bad where they cheat on the rules and they don't follow kind of the stipulations laid out by the rules within the trade agreement. But he doesn't just say that we are trade agreements with countries like China are bad. He's saying we're not going to talk about trade anymore as new steps in economic cooperation with our partners. Right. But I think that's driven by the political realities. So you're not getting a trade agreement through Congress. And they need to come up with a cohesive policy that doesn't admit that. That's not the argument he's making. I'm saying I'm taking him at face value and this is his, this is the consolidated foreign policy strategy. And that's not saying, oh, it's about congressional realities. It's saying this is an actual strategy we're pursuing. Because they have no other choice. No. They have to make limits. This is a vision. This is a vision. We're eliminating out limits. There's a lot of things that may not work in their strategy, like actually getting partners to somehow go along with industrial policy of the United States. And there's a lot of things in it that are constrained by reality. So this is not something, oh, we're doing it based on constraints of reality. This is our vision. There's a big difference. Yeah. Yeah. I could see that. I mean, there's, without a doubt, I mean, there's a lot of, I mean, it is just built on a foundation that is in conflict with each other. Because we talked about that. I mean, just the idea of having this middle class foreign policy. Right. So I'm saying it's significant the steps that they're saying about trade. And that it is part of their vision of foreign policy. Yeah. Well, I mean, okay, maybe I just want to read the reality of it. And they're trying to essentially fit a coherent story into the reality of dysfunctional Congress. But I'm saying that's not all their policies, not based on reality, because their policy is based on a lot of things that are unrealistic, like this French oaring and partnerships. They include all that even though in reality that's constrained. Well, at least that can be given time though. We know from the past two decades that Congress is absolutely dysfunctional and broken. I just couldn't disagree with you more. This is the vision of an economic strategy. This is not taken into account realistic constraints. It is about, this is our vision for foreign policy. Yeah. Okay. I guess I'm just not quite getting the, I get the emphasis on big multilateral WTO wide global agreements on trade, or even the big trans-specific, even though that's definitely not in the United States national security interest. But I'm not reading just the out and out aversion to trade policy beyond kind of what's the fact that's not possible domestically. That's absolutely not what you're being said in the speech. I get that. And maybe I've missed out on that part. But if that's the case, then again, it's another pretty stunning concession towards an America first Trump policy. Yes. And his whole point is that it's not America first because we are going to work with our partners on these sort of industrial policy friend showing matters. Right. Which I think we should give them time to see if there's any progress on this. Well, I mean, my problem is I don't see any logic that is either happened or I don't see a way forward on that. So just as you're saying, I don't quite get the incentive structures now, but So I can't give them credit for something that doesn't have the right incentive structure. So I mean, I think it was incredibly significant both speeches in providing a vision for the U.S. One thing, you know, the inherent contradiction, I think in the speeches is one, Yellen has emphasized the current global order as something that's successful and America has dominated and we want to keep it. But Sullivan is essentially saying no, we're building a new indifferent global order, which is also important because, you know, we're talking about China reforming the global order. The U.S. is revising the global order too, because one of the basic components of that was the liberalization of trade after World War II. And the idea that this was going to lift all boats. And so we are turning away from that. And if you're turning away from openness and trade, you're inherently providing a new global order. And I think that's sort of what Sullivan is getting at with this term new Washington consensus, which is not at all like what the Washington consensus was about, which is here's a plan of how economies grow. He's instead an a vision for the new global world order. And he even says this, he says this strategy, industrial, will build a fairer, more durable global economic order for the benefit ourselves and people everywhere. And then that's really significant. And I think there's the biggest contradiction in those speeches. Yeah. Yeah. I mean, I think it is, it is interesting. Again, it's probably from a high level administrative figure, seeing the out and out acknowledgement of what we're, you know, I think widely recognized by a lot of Americans as the failures of globalization. But then to, yeah, to embrace and in a, they used careful language to, to a certain extent. What are the policies? I mean, more than this careful language, what are the policies? And he's saying that didn't work. Well, that underpins the liberal world order since World War II. Yeah. But let's not kid ourselves. Tariffs are at two and a half percent. They're not going to increase beyond that. When we were isolation lists, tariffs are like 25, 30% on average. So we're not heading towards that world again. The fact that we're not going to head towards one percent tariff versus two and a half percent. I don't think is that is a great, oh, you know, we're abandoning the world order. I mean, look, China's still, China and the US still trades $700 billion worth of goods between them. Right? It's not all about tariffs. So look, we're not increasing the tariffs on cars from Europe and Korea and Japan. But we're saying, oh, it's cheaper to buy cars made in America. That hurts the amount of cars that are going to be bought from Japan and Korea and the U in the US. So it's not about tariffs. This is no new policy. We've always had policies that have encouraged foreign manufacturers to put their facilities in the United States. That's been a policy since the 80s and 90s. This is a pretty substantial revision of policy to give these subsidies. This is what's causing so much international conflict with our partners, to give subsidies to just American companies and those built in America makes those cars substantially cheaper. Around a very selective group of goods. So what I'm saying, you don't need higher tariffs to disrupt global trade. I think I don't buy this as like a wholesale reform of the system, but rather kind of a tweaking of the existing system to try, probably not successfully, but its attempt to try to reform the excesses and failures of a completely freewheeling free trade system that honestly puts the values and incentives of the elites at the top of the most important aspects of these trade deals. I think it depends on how broad industrial policy becomes because if it becomes very broad, then you do lead to a tarkey. Yeah, I don't think that's on the table at all. I think they have been very careful that this is targeting a certain number of goods. Now, when you do frame it, bringing back into national security and then everything becomes national security, kind of like the people at some of your colleagues at NDU talk about where does that line ends. And it sounds like almost everything. So I think if military strategists had their way, then everything, it would go towards on tarkey because that's the... The competitiveness of the American economy. So you write the rules to where your companies are more competitive. So they buy American products and not products from other countries, but then that makes those other countries become protectionists so people will buy more of their products than the American products. So you don't need tariffs even to change policy. Yeah, but I don't think we're heading in that direction. I think it will remain isolated to certain things. It will be interesting in areas, particularly around the IRA and around things like battery manufacturing. I find it amazing that we would do with the raw source material of having to have lithium mines or rare earth mineral mines, given the environmental impact and the cost of it, that we have a policy in place to something that's way outside of our competitive advantage. I mean, I get... You know, semiconductors, that's something that, yeah, maybe that isn't something that we would naturally... Obviously, we don't manufacture here because it doesn't make economic sense. The government is funding mining of these minerals as well as building two processing plants that's funded by... Yeah, so if you see... And that's fine for targeted sectors that you really believe are strategically important to the national defense, but when it becomes expanded to such an extent that more and more is kind of in the envelope, and I totally agree that then you go down that autarky bubble and that becomes dangerous. But again, it's 2.5% on average tariff. We're nowhere near that. I don't think we're heading in that direction. And I'm saying subsidies are an indirect tariff. It's a very confusing trade, but to say that, oh, tariffs are the only thing that affect prices, subsidies incredibly affect competitiveness and pricing. And that's a huge problem. It's one of the problems, the beefs that we have with Europe, with... I mean, this is one of the big key disagreements amongst trading partners is the amount of subsidies that you give to your own industries that distort the competitiveness of trade. Sure. Yep. You can have export controls. You can have all kinds of things that are not about tariffs at all that affect prices and affect competitiveness. Right, but that's nothing new either. I mean, each side, especially on agriculture and probably especially on Europe, have always been protective around certain... And what's new is we're expanding beyond agriculture. Right. Around, again, limited areas. So far. That's not... I haven't seen talk for other areas. I think you may... I mean, are you getting pushed back? Remember, I mean, even in the debt seal and negotiations, one of the stipulations that Republicans are pushing back against a lot of these subsidies, obviously for political reasons, but the subsidies around solar and wind technology is already being kind of pushed back against. So I can't see... I don't see in the future a lot of additional bills like the IRA, where the chips act targeting all these other areas to put into the bubble. I'm saying this vision precludes that you would do more. No, I don't know how much more. And I'm not saying there aren't even reasons to do some of it, right? But I think that as a vision in all, what he presented was very contradictory. And inherently, there are just contradictions that they can't resolve. And that's a problem when you have a foreign policy vision. Yeah. I think this was a really good discussion. Yeah. No, it was good. It's good to finally see a unified vision at all kind of stated from the Biden administration, because you haven't had a lot of that. I mean, you had two very different speeches about where they want to see the world order. So I mean, how unifying is the government is still a question? Well, no, I mean, I think those are still... Because we didn't talk a lot on... But they still compliment. I mean, they were very similar in their nature. So I think there is a vision. I think there were some compliments. I don't know if it is going to be this called this new Washington consensus, the name of it. Which should not be called the new Washington consensus. Washington consensus was basically... That's not America first. Economist all grouped together and decided this was this process of liberalization was the best way to create economic growth in countries, particularly that we're not able to pay their debts to the IMF. It was not an American vision. Yeah. So I really hate calling it the new Washington consensus, but it definitely is a new vision for, I still say, for the global world order. Yeah. It just needs the snappy name then. Well, I think that brings us to the end of this episode of Kellogg's Global Politics. You can visit our website at www.kelloggsglobalpolitics.com and follow us on Twitter at globalkelloge or me, a.r. kelloge. And you can reach us by email at nita at kelloggglobalpolitics.com and myself, Ryan at kelloggsglobalpolitics.com. As always, please see our show notes for all the articles that we discussed in the episode. 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