Re-Forge Strategic Alliances and Check China Abroad, Rebuild Economy at Home

The industrial heartlands of the U.S. and its European allies have become crucibles for the polarizing politics of neo-populism for a population left behind in the information age. Anxious and angry citizenry, facing a period of restructuring in largely post-industrial economies, provide fertile soil to nurture nativism, nationalism and nostalgia for an economy and society of yesteryear.

While similar phenomena are at work in many countries—for example, Putin’s Russia, Orban’s Hungary and Bolsonaro’s Brazil—this political wave is most self-destructive in Europe and the U.S. Here, it undermines the West-led, open and international rules-based post-world War II political and economic order that delivered generations of political stability, global security and economic opportunity.

Sustained attacks from foreign adversaries on this liberal economic, trade and political regime is placing at risk norms and institutions of openness and transparency, a free press and judiciary and the overarching respect for the rule of law.

Russia is one prime agent seeking to tear down the post-World War II West-led order. But while Russia does what it can—for example, by meddling in U.S. and European elections, puffing up its global role—its weak, kleptocratic economy will likely ultimately limit its impact.

China is a different story. A billion Chinese at home and around the world, an increasingly educated, affluent and entrepreneurial citizenry, and a state-directed economic growth program has enabled China to try and bulldoze its way to international economic, strategic, military and political dominance. COVID-19 has only heightened U.S. and global concern over its operating model, authoritarian influence and disregard for the international order by which its economy has flourished.

The COVID-19 crisis gives America the need and opportunity to rethink and rebuild the fundamentals of our economic and political power: As COVID-19 pushes us immediately towards retooling our innovation infrastructure, production base and supply chains to be less dependent on China, and social unrest and economic anxiety rage at home, can we use this moment to foster a new wave of innovation, good job growth, inclusion and newfound optimism in the future in our country?

A national work and investment program to rebuild our economy and deliver new and solidly paying jobs to the many Americans who were being left behind before COVID-19 struck, now reeling, will do much to diffuse the anger and anxiety that enables nationalism, retreat from the international order and misplaced resentment of immigrants and people of color. Protecting our valuable intellectual property from misappropriation will curb China’s strategy to grow through unlawful “acquisition” of our innovations.

Many public and private sectors leaders now call to “on-shore” our global sourcing, supply chains and production systems. To be sure, we should strategically on-shore products and protect the intellectual property that contributes to national resilience and security, and protects us from future pandemic waves. However, a full retreat from international trade is neither economically feasible nor politically stabilizing. A better path is to combine strategic on-shoring with developing an international supply chain framework that reinforces the relationships between the U.S. and its democratically minded allies.

USAID Deputy Administrator Bonnie Glick has referred to this concept privately as “allied-shoring.” We’d like to call it “ally-shoring.” Ally-shoring means leaning into economic partnerships with those who share our values and strategic interests. It means rebuilding our economy with nearby friends with whom we already have tightly wound production and business service networks, such as Canada, Mexico, Costa Rica and American territories like Puerto Rico and Guam. It means invigorating relationships and re-forging economic and social linkages between the U.S. and long-standing allies in Western Europe, the Middle East and Asia (including India, Thailand, Vietnam, Japan and Korea). When combined with strategic U.S.-driven global infrastructure investments, ally-shoring will rebuild our own economic and political strength, those of our friends around the globe and effectively check China’s designs.

Leveraging support from American business and government leadership, the U.S. can lead an alliance of economies where robust trade, investment and financial and social benefits are tied to an endorsement of democratic norms of openness, transparency, free expression and rule of law. Many of our friends, seeing the U.S. pull back from its global leadership role, have been newly vulnerable to China’s entreaties and encroachments. Now, facing a COVID-19-changed world, we have a compelling rationale to offer allies a new partnership without exhorting political fealty, extractive lending and enabling corruption—the path offered by China.

Ally-shoring can deliver new economic opportunity for our own people, and this is where we need to start. Building on this work with our democratically minded friends around the world will generate real prosperity for allies who embrace our historically open and democratic norms, reanimating a rules-based coalition that is more than the West, but truly global.

After this pandemic, there will be no better medicine for the U.S. and the world.

Elaine Dezenski is a senior advisor at the Foundation for Defense of Democracies and CEO of LumiRisk LLC. John Austin Directs the Michigan Economic Center, and is a nonresident senior fellow with the Brookings Institution and the Chicago Council on Global Affairs.