About ten years ago, and quite by chance, I was invited by a noted physicist to attend a semipublic conference held at Stanford University about the intersection of national security and global trade. The subject was perplexing for me, both as a firm defender of laissez-faire economics and as a longtime believer that Pax Americana, which failed abjectly in Afghanistan, remains a key element in any successful strategy for world peace. My longstanding commitment to laissez-faire made me initially skeptical about the need for extensive trade restrictions, only to have a wake-up call as one technical speaker after another addressed the many ways in which free trade could hamper national security. The concerns were not just with the sale of military hardware, but also with many electronic and similar products that, standing alone, or after some technical fix, could be deployed to harm the United States, its allies, and innocent civilians.
So, the role of national security relentlessly expanded, as did the kinds of controls that might be instituted to minimize the risk of conflict, while still arming our allies and generating needed resources for our defense industry. Do you refuse to sell certain products to foreign governments? Do you sell them some stripped-down version? Do you sell them subject to restrictions on use or resale? If so, which ones? And whatever the correct mix of restrictions, how are they enforced, especially since our defense capabilities depend on using technologies developed by our allies and obtained by sharing arrangements?
The overall lesson of that meeting was that just about everything was fair game for examination in the name of national security. But, by the same token, every urgent claim for national security could be used to advance bogus or exaggerated claims which, if accepted, could create frosty diplomatic relations with our allies and impede our own economic well-being in the bargain. Both values matter. The error costs are high in both directions.
Potential offense to a key ally
The matter is further complicated because, in a nation with limited federal powers, there is a serious risk that restrictions justified in the name of national security could run afoul of constitutional restrictions, typically centered on protecting freedom of speech under the First Amendment. That freedom is not, and cannot be, absolute, for any government is fully entitled to suppress threats of force, defamation, and fraud. There is no clean solution to ticklish scenarios compounded by the inherent uncertainties in assessing various external threats. So, it is necessary to identify both the legitimate ends and the appropriate means for protecting America’s national security interests. One consolation: just because there are close cases does not mean that there are not also easy ones.
Let’s start with an easy case, in which political considerations have prevailed over national security: President Biden’s opposition to the acquisition of a faltering US Steel by Nippon Steel, the fourth-largest steelmaker in the world, and which is headquartered in one of America’s most vital allies: Japan. The source of the political opposition rests exclusively on the need for the pro-union Biden to protect his political base in such places as Pennsylvania (where US Steel has its headquarters) and Michigan. On straight economic grounds, the infusion of know-how and capital will make US Steel a more vital company, better able to compete at home and abroad. And blocking this deal will test our diplomatic relationship with one of our key allies in East Asia, where the Chinese threat looms ever larger.
There is no apparent national security issue that bolsters this resistance. There is no secret technology that US Steel will release; instead, it is likely that making the company stronger financially and technically will advance, not retard, American military capabilities. It is only chauvinism for Biden to claim that this country needs to “maintain strong American steel companies powered by American steel workers.” And he gives no explanation why “it is vital for it to remain an American steel company that is domestically owned and operated.” As ever, the shortsighted analysis overlooks the point that improved products with Japanese inputs should enhance US Steel’s ability to compete in foreign markets, selling better goods for lower prices, profits which could in turn be reinvested. Yet is a clear measure of the bipartisan decline in clear thinking on international affairs that Donald Trump sings from the Biden hymnal when he writes: “I think it’s a horrible thing, when Japan buys US Steel. I would block it instantaneously.”
Why? It’s not explained. Nor is there any analysis of what should be done when an American company seeks to acquire a Japanese firm. Should Japan or other allies retaliate in the same way when we treat our best friends as our worst enemies?
The TikTok question
The shoe may be on the other foot in connection with a political movement starting to gain traction in the form of a proposal that has now passed the House. It would force a sale of TikTok, giving the Chinese government a stark choice with respect to its fully controlled national tech giant, ByteDance: either sell TikTok within six months to an acceptable buyer or suffer a slow business strangulation, not because the US government could directly prevent ordinary people from accessing the site but because American controls could cut off the site from any new profits through the prohibition of sales through app stores and web-hosting companies that supply the firm’s lifeblood. The Chinese government has already flatly rejected the idea of a sale, even as other groups, such as one headed by former treasury secretary Steve Mnuchin, are seeking ways to raise funds to execute a transfer. The legislation is unlikely to move forward rapidly in the Senate, which is divided on its merits.
The case in opposition insists that TikTok has earned its space in the tech firmament by supplying a huge 170-million-person market with the kind of timely and practical information that makes users’ lives better. And multiple groups continue to mount powerful defenses of TikTok on the ground that the House bill upends the First Amendment guarantee of freedom of speech without showing that a narrowly tailored means has been used to serve a compelling state interest. And so it does, without question, for the millions of individuals who use the site for perfectly legitimate purposes. But there is a darker but inseparable side to this equation that asks whether good material on TikTok coexists with bad. It is easy to identify what those activities could be. One is the selection and promotion of misleading materials favorable to the Chinese Communist Party, and which are calculated to mislead or misinform American audiences. To this argument, one strong response is that TikTok is not the only bad player in this space, given that key American sites have been challenged precisely because they act in the same way by promoting partisan viewpoints. But the charges evidently run deeper, covering the use of the site to gather financial and personal information of Americans, a privacy concern, and more ominously to gain access to various sites to engage in sabotage or other efforts to undermine American national security. The information used to make these claims is generally classified, so this debate proceeds in part by trust in proxies.
Adrift among allies and adversaries
Amid this confusion, I come down on the side of cutting out TikTok, given its current ownership. The situation should not be viewed in a vacuum, but against an ever-larger backdrop of a consistent effort by China to subvert the West by all its actions in Asia, including in the Taiwan Strait and the South China Sea. China also carries out a conscious and continuous attack on trade secrets and intellectual property and the persecution of its own citizens, and is experiencing a rising level of discord that could prompt aggressive actions abroad. Xi Jinping’s government has, given its dismal performance, to be presumed guilty unless proved innocent by a clear preponderance of the evidence because the risk—and it is only a risk—to national security is too great to be ignored.
Nor does cutting China off in the United States mean the end of these forms of services. The companies that are prepared to fork over billions to acquire TikTok could put those resources to devise one (or more) of their own platforms that offer the same services without the same drawbacks: Meta has Instagram Reels and Facebook Shorts, while Google has YouTube Shorts. New entrants could follow. Indeed, even the desired purchase of TikTok carries the risk that the equipment acquired contains embedded features that could prove dangerous. So, perhaps the clean break is needed. Hard questions all.
The debate has even greater urgency because of a national security risk that goes far beyond social media and steel mills: American unpreparedness. In face of new and determined foes around the world, the Biden administration has taken the dangerous step of shrinking in real terms the military budget at the time that sophisticated threats are multiplying around the Middle East, the Red Sea, Ukraine, and Taiwan, for starters. The deadly calculus is that the balance of power will shift, if it has not shifted already, in favor of our enemies if we shrink our budgets, weaken our alliances, and turn inward. It is the worst trade-off in our history, and yet it gains strength not only because we do not believe in Pax Americana, but also because we seem unable to distinguish friend from foe, and good from evil.
