United States’ obsession with ‘tiny’ Russia will make China the real winner

(Illustration by Suneesh K.)

So United States President Joe Biden is considering reducing tariffs on some Chinese goods. At some point this was inevitable given the sheer scale to which his son and business interests are compromised to China. However, the curious thing is how minimal the impact will be on inflation back in the US. The most optimistic estimate is that it will save the average US family around $797 (Rs 63,000) — not enough to prevent a catastrophic wipeout in the mid-term congressional elections in November.

Woke Policies

So what lies behind this rearguard action? Much of the inflation we’re seeing has to do directly with the ultra-woke policies of the Democrats themselves, and very little to do with Russia. For example, much of the food inflation is coming about because of a slew of animal rights and sustainability legislation — in the same calibre of outlandishness as Sri Lanka’s push to go fully organic. It started off with pork and California legislating a minimum space requirement for each pig whose meat was to be sold in that state. While the space increase was negligible individually and the concern for animal welfare admirable, the immediate costs it imposed on porcine product manufacturers was debilitating. Obviously prices of pork and pork products - ham, bacon, sausages - all critical staple of the American diet, skyrocketed.

This was followed by uncompromising stances on fossil fuels. The US technically extracts as much fossil fuel as it requires, though due to market inefficiencies it sells some of this abroad, and imports some. However, what a slew of legislation did was it dis-incentivised fossil fuel extractors from investing in surplus and future capacity which would’ve helped the US and global markets tide over the current fuel crisis. This suited both parties perfectly — a price rise in fuel would force consumers to switch to electric vehicles which suited the Democrats. The medium term disaffection would benefit the Republicans and force the Biden administration at some point to allow fracking again.

Diplomatic Blunders

Then there were the compound diplomatic blunders. The first was an entirely uncalled for cancellation of the F-35 sale to the United Arab Emirates; essentially punishment for torpedoing the Iran nuclear deal and aligning too closely with President Trump’s policies. This was followed by the clumsy, heavily-personalised ostracism of Prince Mohammed bin Salman of Saudi Arabia, for the alleged killing of a Washington Post journalist. As condemnable as that was, for a government to determine bilateral relations on a single point, for a single individual, smacks of atrocious diplomacy.

Up to this point it was an equilibrium suited to everyone. But then came the Ukraine war, and a host of ill-considered sanctions. The ideators of these sanctions (like Daleep Singh) were lauded as ‘geniuses’ — but had to quit in ignominy for ‘personal reasons’ once the scale of the self-harm became evident. During the Raisina Dialogue in Delhi in April, some US policy-makers were boasting to this author in private that “Russia was so small it was irrelevant to the world economy”. Perhaps in isolation it was, but combined with the suicidal self-inflicted harm that the Democrats have imposed on the US, it is turning out to be fatal.

Unlike past sanctions on single-product economies such as Iraq, Libya, or Venezuela, Russia though a commodities economy, is no single-product economy. It is an energy superpower, an agricultural superpower, and a commodities superpower being a major vendor of almost every single mineral critical to modern industry. You can’t just impose sanctions on ‘tiny’ Russia and hope to escape unharmed.

Compound this with the fact that Riyadh and Abu Dhabi are now in no mood to help Washington with fuel prices unlike the 1990s, the options are looking increasingly bleak.

More cautious Eurocrats would concede in private that European sanctions on Russia far exceeded what was necessary, and went into the territory of dangerous recklessness. So today, it is the US and Europe that have had to beat humiliating retreats from cherished energy policies and ‘human rights’-based foreign policies, while Russia shows no signs whatsoever of backing down.

Advantage China

But as delicious as this irony is, we see that the only real winner here is China. For starters, the US is so bogged down in a multi-policy, multi-front disaster that the appetite to punish China is much reduced. If it does indeed punish China, the cost to the West will be socio-economically catastrophic.

Then we have the fact that China doesn’t do ‘allies’. Instead it prefers nuclear armed ‘free radicals’: irredentist states who are highly risk accepting and who destabilise entire regions. Like North Korea does East Asia, and Pakistan does South Asia. Today Russia has turned into China’s North Atlantic ‘Pakistan’. It is going to get progressively worse as the West now has very few sticks to punish Russia, and no carrots to incentivise Russian good behaviour. Essentially, the US is stuck with Russia, where India has been with Pakistan for the last 60-odd years: have a far more hostile enemy that is at your doorstep hurting you every day forcing you to divert precious resources to it; while you have neither the energy nor resources to face up to the bigger strategic enemy: China.

The removal of China tariffs, if and when it happens, will be an acceptance of the fact that China’s ‘free radicals’ policy has won game, set and match; while the US’ ‘values based’ policy has essentially been an agglomeration of dead-end dunces.

Abhijit Iyer-Mitra is a senior fellow at the Institute of Peace and Conflict Studies. Views are personal, and do not represent the stand of this publication.