by James Pinkerton
Almost exactly 76 years ago, on March 5, 1946, Winston Churchill, the former prime minister of Great Britain, delivered one of the most important speeches of the century. Surveying the increasing despotic rule by the Soviet Russians over Central and Eastern Europe in the wake of World War Two, Churchill declared, “From Stettin in the Baltic to Trieste in the Adriatic, an iron curtain has descended across the Continent.”
That phrase, “iron curtain,” stuck, helping to define the Cold War for the next five decades. In such a chilled environment, significant trade and normal exchange of any kind between the Free World and the Communist Bloc was unthinkable.
So now today, we can see that an iron curtain is once again descending; only time will tell if brave Ukraine will be held, once again, as a captive nation on the wrong side of this terrible barrier.
Yet in any case, what The New York Times calls “The Great Separation” is happening, as Russia becomes an “international pariah.” As a result of Western sanctions, Russia’s currency reserves, once estimated at $630 billion, are estimated to have been significantly liquidated. And U.S. trade with Russia, which in 2021 totaled a non-negligible $36 billion, is now likely to fall to zero.
For his part, Vladimir Putin continues to clamp down on what remains of Russian freedom, moves toward replacing the Internet with a Russian “Splinternet” and talks about nationalizing foreign assets.
An iron curtain indeed.
Yet there could be another, much heavier, curtain to drop. On March 13 The Financial Times reported that Russia had requested “military equipment and other assistance” from the People’s Republic of China. Anticipating that report, on NBC News’ “Meet the Press,” U.S. National Security Adviser Jake Sullivan warned China not to try to “bail out” Russia by circumventing Western sanctions. Sullivan added, “We will ensure that neither China, nor anyone else, can compensate Russia for these losses.” That’s tough talk, which might not play well with the Chinese.
We might recall that just in February Beijing and Moscow jointly declared that the “friendship between the two States has no limits, there are no ‘forbidden’ areas of cooperation.” Will that friendship include China helping Russia to kill Ukrainians? Will the China-Russia axis, steeled by a common hostility to the West, grow even stronger?
If so, then the New Cold War will likely be extended to China, as well as to other countries associated with this emerging Eurasian Bloc, such as Belarus, Iran and Pakistan.
China has already been under pressure over its multitudinous human-rights violations, as well as its neo-Maoist crackdown on business activity. And so Western companies have been pulling back, mindful that some sort of separation is coming. For instance, the American computer-chip company Intel, an early pioneer in outsourcing to China, has just announced plans to build a giant chip factory in Ohio.
We are seeing the turn of a giant historical wheel toward de-globalization. And with China, the consequences for the U.S. would be huge; in 2021, our trade with that country amounted to $657 billion, of which our trade deficit was a whopping $355 billion.
Given the size of that deficit and the impact that underpriced imports have had on American jobs and industry these past two decades, many Americans won’t miss Chinese imports one bit. As Sen. Tom Cotton said recently, letting China into the World Trade Organization in 2001, and thus more widely into the U.S. market, was “one of the single worst mistakes of this generation.”
The realization that we have weakened ourselves through over-dependence on hostile foreigners (remember having to import masks and medicines from China?) has given new life to nationalist visions of American sovereignty and energy independence; even Tech Lords are jumping on that bandwagon.
So we can see: The supply-chain pullback that this author wrote hopefully about two years ago for American Renewal is really happening.
It’s ironic that this decoupling is accelerating under President Joe Biden, long an internationalist, and not the avowedly America First Donald Trump — history has its own strange twists.
So what will be the impact on the U.S. of this new iron-curtaining? In the short run, it’s likely to be economic disruptions; shortages and inflation, both. However, over the longer run, we can be optimistic about non-inflationary growth.
Why? Because if we can look back at our own history, we can see plenty of instances where we invented and innovated our way out of serious difficulties.
For instance, after Pearl Harbor in 1941, we were cut off from our supply of natural rubber from Asia. In response, America created a synthetic rubber industry virtually from scratch in a matter of months. If we look even further back, we can see that the whole economic model of this nation in the 19th and early 20th centuries was what contemporary economists Robert Atkinson and Michael Lind have called, in the spirit of Alexander Hamilton, “national developmentalism.”
To sum up: The United States as a non-free trading country can do just fine. Very well, in fact.
Some Americans will wonder: Do we still have the old spirit of Can Do? Or have we let ourselves be litigated and NIMBY-ed into a kind of national helplessness?
With a new Cold War coming we’ll likely find out. But one thing seems certain: If we don’t have that winning mentality, we’ll lose. So let’s hope that just as Volodomyr Zelenskyy surprised the world with his courage and fortitude, we Americans will surprise ourselves with our own resilience and resourcefulness.
And with the proper get-it-done spirit, let’s look ahead to new geopolitical and entrepreneurial plays, such as perhaps buying Greenland and for sure mining asteroids.
Let’s build our own stuff, create our own energy and in so doing enhance our own population into becoming better and higher-paid workers. If we can do all that we’ll have a lot to look forward to.
After all, in the last century we won the first Cold War. Meanwhile, the Soviet Union, cut off from Western technology and hobbled by its own command-and-control economic system, wheezed along until it finally expired in 1991.
Putin may be thinking that if he kills enough people, he can put that evil empire back together again. But with the help of our friends — including the Ukrainians, fighting for us as well as for themselves — we can stop him. Zelenskyy’s virtual speech to Congress on March 16 will go a long way, cementing the Churchillian stakes of this conflict, which now bears resemblance to both World War Two and the Cold War.
To be sure, China poses a much greater threat, as it is ten times the size of Russia. Yet still, the People’s Republic is only about one-sixth of the world’s population. So if all the people who want to be free — or at least don’t want to be dominated by China — get together, we can keep China’s imperial ambitions, too, in check.
And if we can do all that, then the 21st century can be another American Century.
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James P. Pinkerton, a former White House domestic policy aide to Presidents Ronald Reagan and George H. W. Bush, has been a Fox News contributor since 1996.