Ancient Chinese Lessons

Wisdom from 2,500 years ago

As he's told us many times Trump doesn't read books or briefing papers. He reads posts and the chyron on Fox News. We should not therefore be surprised if an upcoming Executive Order establishes a new National Council on Illiteracy, whose purpose is to alert Americans to the many benefits from not reading.

You may think I’m joking, but I’m not. Germany’s President Hindenberg, who appointed Hitler Chancellor in January 1933, freely admitted that he never read a book in his life. As Joseph Roth put it in his short, powerful essay, The Auto-da-Fe of the Mind (1933): “Is a people that elects as its president an icon who has never read a book all that far away from burning books themselves?” Which, it needs to be remembered, is exactly what the Nazis did.

I digress, but Trump’s illiteracy and hostility to knowledge in all its forms is a profound problem for our time.

The Art of War, written sometime (it is thought) in the 5th century BC by the Chinese general and thinker Sun Tzu, is a short book. Very short, as in 50-75 pages. Somebody on the White House staff should figure out a way to take its 13 chapters and send Trump a series posts, one per day, no more, distilling Tzu’s important and relevant ideas.

He believed that strategic thinking consistently outperforms brute force or other obvious demonstrations of power. This idea—-that knowledge is the source power— is anathema to Trump's view of the world—-and we are all paying the price for his contempt for deep thinking. Trump sees power only in transactional terms. The 2024 election was a transaction. I won and therefore I’m empowered to do what I like. The law, well that’s for losers. How far off is that from a direct quotation from The Donald?

The Art of War teaches that understanding your enemy's tendencies, strengths, and vulnerabilities is critical to success. Engaging in pitched battles should only occur as a last resort when you’re certain you have a clear advantage. Predicting and then effectively counter-acting your competitor is what you should be doing as a leader, as it demonstrates your power of understanding, your mastery of strategy.

Tzu’s teachings include the sage observation that the highest goal is to achieve victory through psychological warfare, diplomacy, and subversion—strategies that subdue the enemy without blunt force and bloodshed. Win the battle, even the war, without firing a shot.

The Chinese have for years engaged in dumping as part of their export-driven economic planning. Chinese steel companies, subsidized heavily by the government, manufacture excessive quantities of steel, much of which they sell in foreign countries at less than the cost of production, to the detriment of local producers in those markets.

Trump in his first term and then Biden imposed significant tariffs on Chinese steel, such that we import very little of it today. Canada is our largest steel supplier, followed by Mexico, Brazil, and Korea. Last year, China was only number 10 on our steel import list, selling us 500 thousand tons, only slightly ahead of Romania's 478 thousand tons. Canada, in comparison, supplied us with 6,550 thousand tons.

Contrary to popular belief, the U.S. produces a great deal of steel. We are the third largest producer worldwide, behind China and India. Moreover, only about quarter of the steel we use is imported. If Trump knows this, he ignores it as an inconvenient fact which interrupts his MAGA storytelling. The fact is that today China dumps zero steel in the U.S market. The situation elsewhere in the world is different, but if MAGA is going to live up to its hype, its only concern should be about what’s happening in the U.S. market. In this MAGA-nomics is a complete failure. Here’s why.

Steel production in the U.S. employs around 80,000 people, while steel-using industries here employ some 12 million, a 150:1 ratio. Imposing or increasing tariffs on steel will increase costs for all those steel-reliant industries. Plus, there’s no evidence that tariffs will meaningfully increase the number of steelworkers employed in American factories. Part of the reason is that steel production today is a highly automated/robotic process. (Another important failure of MAGA-nomics is its ignorance of the role of automation/robotics in today’s manufacturing industries).

A study by the Federal Reserve Board in 2020 concluded that Trump's 2018 steel tariffs added maybe 1,000 jobs in U.S. steel manufacturing, but reduced employment in steel-reliant industries by around 75,000. Notice that the numbers here—- that 150:1 ratio and now this 75:1 ratio are massive—- point to MAGA-nomic outcomes that can only be attributed to profound ignorance or native stupidity.

Rather than engaging in a massive tariff war with China, Trump should apply his tough talk about crime against China's considerable economic espionage activities in the U.S. In his first term, Trump's administration launched the China Initiative at the Department of Justice in an effort to find and prosecute these spies. It had a poor record of success at obtaining convictions, as it used the legal equivalent of a fishing net, hauling in a wide variety of Chinese nationals doing research at U.S. universities, very few of whom it turned out were engaged in spying. Biden canceled the China Initiative in 2022. If you were running economic espionage and international IP theft ring from Beijing, would you hire as your thieves people with Chinese names and send them to Carnegie Mellon on research grants to steal stuff? Of course not. Those malevolent Beijing bureaucrats have read, and re-read, their copies of The Art of War.

Theft of our research and IP is a war we are in, and we need the right strategy to win it. We need a new game plan to find and prosecute these thieves to replace the inept DOJ China Initiative. A good place to start with this would be at the FBI's Office of the Private Sector (OPS), whose purpose is to protect our economy and national security by "strengthening the relationship between the FBI and the private sector." Protecting the IP developed by U.S. companies in sectors such as pharmaceuticals and IT is an important piece, but so is ensuring that basic research, much of it conducted at our universities, is not stolen by China.

Cutting-edge research in nanotechnology, for instance, being conducted in STEM departments at many of our research universities may not be top-of-mind when thinking about threats to our economic and national security. Nanotechnology, which can detect at a molecular and even atomic level, has an important role to play, for example, in protecting our public works and buildings. Think of being able to detect even very small quantities of a highly toxic contaminant in a reservoir. Or coating a building with nano-materials to make it more resistant to fire, or protect it against some other threat?

Northwestern University in 2000 established the International Institute for Nanotechnology (IIN), which it says is the first and largest such organization of its kind. IIN claims it has invested more than $1 billion in nanotech research that has been the basis for 28 start-ups. (China also has several universities with highly-regarded nano-tech research capabilities, so we’ll leave it to the FBI to determine whether China is actually stealing, or trying to steal, our nano-tech research).

Instead of trying to revoke Harvard's tax-exempt status or cut-off its federal research funding, Trump should direct federal law enforcement resources, including OPS, to prevent economic espionage from taking place in Cambridge or Evanston, or anywhere else in the country where STEM research is conducted. Yes, we need a strong military capability, but just as importantly we need to protect the intellectual property which is the backbone of America’s economic security. IP-intensive industries account for half of all our economic activity/GDP, employing more than 60 million people, which is 40% of all employment in the country.

Combatting IP theft and economic espionage will require patience and precision—-not traits we associate with the Trumpian mindset. Yet those are just the sort of skills that Sun Tzu said were essential for achieving victory, as they allow you to focus on the vulnerabilities of your enemy, not attacking their strengths.

China is the world's largest steel producer, making more than half of all global output. We should not be attacking that strength of theirs; it's a dumb and pointless strategy. Their vulnerabilities are many, and a different story.

While China now graduates twice the number of STEM PhDs that we do each year, the quality of its STEM research noticeably lags behind ours, with the possible exception of renewable energy research, and some work with semi-conductors. While they're waiting to catch up on research results in pharmaceuticals, AI, and a long list of other STEM domains, China deploys government resources to steal as much high-quality IP as they can. It's obviously in our economic and national security to stop that.

Cutting the flow of Chinese goods into the U.S. has no such advantages.

To protect U.S. created IP, we’ll need a sharp scalpel not a dull sledgehammer. Or, as Sun Tzu would put it: precise and crafty thinking leads to successful outcomes.