Octavian Report: What are the big strategic threats the U.S. faces at the moment globally and what should our policy posture be towards them?
Michèle Flournoy: I think the biggest threat that we're facing is a return to true great power competition. First and foremost with China in terms of economics, trade, technology, but also increasingly in the security sphere. Secondarily, and primarily in the security and political sphere, with Russia in and around Europe and elsewhere where Russia's trying to reestablish its influence. They're really quite different challenges but you can lump them together in the sense that they are both great power competition. We really haven't wrestled with that since the end of the Cold War. I'm not suggesting we're returning to a Cold War because I don't think we are, but we are returning to a much more competitive global environment, where we really have to play our cards very well and very carefully.
One of the things I think we need to do is recognize the unique strategic value of our alliances and partnerships. We are the only country in the world that has an alliance like NATO behind us, that has strong political and economic partners throughout Asia. China doesn't have that. Russia doesn't have that. No other country in the world has that and right now, we're seeing things through more of a transactional bilateral lens that greatly discounts the strategic value of those relationships in this more competitive period.
OR: Can you outline the differences in U.S. strategic competition with Russia and China and give a sense of what “playing our cards right” looks like through both of those lenses?
Flournoy: I think China is clearly a rising power with expanding influence throughout Asia and more broadly. It has aspirations to become the dominant power in the Indo-Pacific Region. Tremendous growth in its economy. A tremendous resource in its population. Pretty good success in bringing millions of people out of poverty and raising the standard of living — not universally, but pretty remarkably in a reasonably short amount of time. China has a government that now, having consolidated power, has a strategic plan to drive government investment in key areas of technology and their economy to take us on head on.
I think with regard to China, it's clear that the trade landscape is not level or fair. We've had probably an historic transfer of wealth in the form of stolen intellectual property from the United States to China over the last many years. They continue to restrict access for a number of U.S. companies and sectors. The complaints about unfair trade practices and a lack of a level playing field are valid. But I think the way to go after that is to marshall all of our allies and partners who also have the same experience to push back on China together. We're going to be much stronger pushing as a group than the U.S. will be via imposing some tariffs bilaterally. We're not using the leverage of like-minded states with similar interests and experience. We're not using those as leverage to be more effective in pushing back on China.
OR: Does Trump’s trade policy vis-à-vis China bring political risk with it?
Flournoy: I do think there's political risk in the sense that some of these tariffs are going to really hurt sectors of the American economy. Depending on the particulars and how this goes in the future, you'll have parts of agriculture hurt as the Chinese impose reciprocal tariffs as they already have announced. This will not be cost free to the American economy or to the American workforce. I think if this really escalates and it becomes a prolonged trade war, it could very much backfire against Trump politically at home.
No one's sure whether this is simply a tactic to get something else or whether this is sort of the one card he's going to play. The problem is it's not clear what his strategy is to actually get at the more fundamental issues that are at the root of the imbalance and the lack of a level playing field. Tariffs are not going to get at the intellectual property issues. They're not going to get at the market access issues that are fundamental to the problem.
One more thing about China: in the security domain, they really are trying to change the rules of the road in Asia-Pacific in terms of international law and international norms. I think it's very important that the U.S. stays present, that we consistently enforce the rules of the road, whether it’s freedom of navigation, whether it's standing up to provide support to a partner whose sovereignty is being violated, whether it's stepping up to help defend an ally. It is very important that the U.S. also remains consistently present and a stabilizing influence in Asia Pacific as China starts to flex its military muscle more.
OR: What should our Russia strategy be?
Flournoy: Russia is not a rising power by any objective measure. Its economy is struggling. It's one of the few developed countries where the average life span is actually going down, not up. It has an authoritarian system that is providing for the few and the wealthy but not the majority of the population. This is not a rising power. It's not a terribly successful state by any objective measure. But what Russia does have is a deep sense of grievance that Putin has tapped into.
Russia has not been respected or treated appropriately since the end of the Cold War. Putin wants to reassert Russia as a great power by reexerting influence on his periphery, as we saw in Crimea and then Ukraine. He wants to project power abroad as we've seen in Syria, trying to reestablish a foothold in the Middle East. He wants to call into question the biggest threat to his approach to government, which is democracy. The more he can cause chaos in Western democracies, whether it's in Europe or more recently in the United States through meddling in elections, the less credibility democracy has as a threat to the political system he's tried to put in place in Russia itself. Putin is also continuing to invest quite substantially in the Russian military in ways that try to exploit some of our weaknesses and undermine some of our strengths. We do have some serious military technology and capabilities that we would have to contend with if it ever came to that. That's another aspect.