US: a warning written in numbers

The US is ramping up its military spending while threatening China economically and militarily. The US ruling class wants to compensate for its waning economic power with military superiority, in order to retain its global dominance. Combining the threat of an all-out trade war with belligerent warnings and manoeuvres is intended to force China to yield to the US. Trevor Rayne reports.

This March President Trump announced his proposed US government budget for 2019-20. It adds almost 5% to military spending and cuts non-military spending by as much. Proposed spending on preparations for wars goes up, spending on healthcare, education, the environment, food stamps, housing support and pensions goes down. A further $8.6bn is intended to be spent on the wall along the border with Mexico, on top of the nearly $7bn Trump announced in his 15 February national emergency declaration. If the US working class is going to defend its living standards it will have to confront US ruling class militarism and racism.

The US government plans to spend $750bn on its military in 2020, a sum larger than the combined military spending of the world’s next 14 biggest arms spenders. The Overseas Contingency Operations budget request for directly fighting wars rises from $69bn to $164bn. This allocation alone is almost equal to China’s entire annual military budget and three times Russia’s. If ever there was a warning written in numbers, this is it. $500m is allocated for aiding ‘democratic transition’ in Latin America.

When a Chinese spacecraft became the first to land on the far side of the moon on 3 January 2019 the US ruling class was angered. President Trump signed a directive ordering the Pentagon to create a Space Force as the sixth branch of the military. Space Policy Directive-4 will guarantee ‘American space dominance’ by ‘establishing the United States Space Force which among other tasks will organise, train and equip our space war-fighters with next generation capabilities’. The US has resisted any international attempts to forbid the deployment of weapons in space. The aim is ‘full spectrum dominance’, meaning US military control over land, sea, air and space, by 2020.

The US plans to have 60% of its air and naval assets stationed in Asia by 2020. In March the US flew two nuclear bombers over the South China Sea and sent two warships through the Taiwan Strait. US Secretary of State Mike Pompeo issued a warning that can only have been directed at China’s presence in the disputed waters, ‘As the South China Sea is part of the Pacific, any armed attack on Philippine forces, aircraft or public vessels…will trigger mutual defence obligations under Article 4 of our mutual defence treaty.’ China responded saying that it will increase its defence budget by 7.5% to $179bn.   


These moves are the backdrop to US-China trade talks. President Trump had threatened to raise tariffs on $200bn of Chinese imports from 10% to 25% on 1 March 2019, but delayed the increase because negotiations, he said, were ‘productive’. The talks are not just about the US trade deficit but also the US seeks to curb China’s growth and influence and open it up to US corporations (see FRFI 266). The US wants the Chinese state to stop subsidising its advanced technology industries and accept US restrictions on Chinese investments in sensitive technologies without retaliating. The US insists on the unilateral right to impose tariffs if it believes any agreement on trade reached with China has been violated. The US wants China to accept subordination.    

Into this struggle has been dragged China’s largest private company, the telecommunications and electronics firm, Huawei. The US asked Canada to arrest Huawei’s chief financial officer, Meng Wanzhou. She was arrested on 1 December 2018 at Vancouver International Airport. The US wants Meng Wanzhou extradited to face charges of defrauding multiple financial institutions in breach of US-imposed sanctions on Iran. Trump said he might stop the case if a trade deal is reached. Huawei has been excluded from the US telecommunications network on ‘national security’ grounds. The US said that countries using Huawei to develop their telecommunications industry will be vulnerable to Chinese state spying. Huawei is thought to be ahead of any other company in developing ‘5G’ (fifth generation telecommunications technology).

Australia, New Zealand and Japan have complied with the US and banned Huawei from parts of their telecommunications infrastructure. The US warned Germany that if it allows Huawei’s participation in its telecommunications network, the US would reduce intelligence cooperation. However, the European Commission said it will not comply with the US demand; it said it would manage any security risks. Thus far, Germany, Britain and Turkey have rejected the US demand that they boycott Huawei’s products and services.

On 23 March, Italy became the first G7 nation to sign up to China’s Belt and Road Initiative (BRI), despite the US condemnation of Italy’s intention to do so. Now, 14 European Union countries, in Central and Eastern Europe plus Portugal and Italy have signed up to the BRI. French President Macron and China’s President Xi Jinping agreed business deals worth $63.6bn in Paris on 26 March. The EU is China’s largest trading partner and China is the EU’s second largest, after the US. Volkswagen sells 39% of its cars to China. The US will not be able to compel the EU to isolate China or Chinese firms.

In the past 15 years the UK has received close to $80bn of Chinese foreign direct investment, the largest European recipient. If the British government were to block Huawei, it would harm trade with China and any future investments. On 28 March GCHQ’s National Cyber Security Centre reported that there were risks associated with Huawei’s software engineering and cyber security pro-cesses. A government decision on Huawei’s involvement in Britain’s 5G is due in April.  Regardless of whether a trade deal is reached between the US and China, any halt in hostilities will be brief and Britain and Europe will be under pressure to choose sides.

Fight Racism! Fight Imperialism! 269 April/May 2019