Trump Bows to the Saudis

John Glaser and Benjamin H. Friedman

President Donald Trump’s Middle East trip has been a tragedy
disguised as farce. Amid the gaffes, glowing orbs and gaudy receptions, the Trump administration moved
deliberately to take Saudi Arabia’s side in the region’s sectarian
struggles and undermine the fragile détente with Iran brought on by
the Obama administration’s nuclear deal.

Toadying up to Saudis is morally grotesque but familiar. What
now makes it tragic is the obvious lack of strategic payoff. The
benefit is negligible and the likely cost is more terrorism and
higher chances of a disastrous war with Iran.

Whether Trump bent, bowed or curtsied before King Salman in receiving a gold medal,
in policy terms, the trip was an emphatic U.S. bow to the Saudis.
Trump praised Saudi counterterrorism efforts without
a word of criticism for their funding of Wahhabi extremists around
the world. He offered the Saudis a massive $110 billion arms deal
despite the fact that their brutal bombing of Yemeni civilians
makes it potentially illegal. Trump even adopted the Saudi pretense
that their Yemen campaign serves counterterrorism.

The president and two cabinet secretaries awkwardly joined a
Saudi sword dance without evident concern for the country’s
use of swords to behead people for offenses
like political dissent, sorcery and being gay. No administration
official criticized the kingdom’s abysmal human rights record whatsoever.

Trump saved his fire for Iran. As Iranian voters delivered a
resounding victory for reformists eager to negotiate further openings with the
international community, Trump criticized Iran’s animus towards the
United States and Israel and aid to terrorists and extremist groups
that “spread destruction and chaos across the region.” The
hypocrisy of making these remarks alongside the Saudi rulers is
remarkable.

The president’s kowtowing
to Saudi Arabia has no benefits and big costs.

For decades, the Saudi regime has funded the establishment of mosques abroad that
teach an extreme interpretation of Sunni Islam hostile to Jews and
the United States, while often looking the other way when private
Saudi donors and charities directly fund terrorist groups like
al-Qaida and the Islamic State group. As a classified 2013 State
Department cable explained, “donors in Saudi Arabia constitute the most
significant source of funding to Sunni terrorist groups worldwide.”
Hillary Clinton, in a leaked emails from 2014, wrote that Saudi Arabia was “providing
clandestine financial and logistic support to ISIL and other
radical Sunni groups in the region.”

By agreeing with the Saudis that Iran is the real source of the
region’s problems and rewarding them with an arms deal, the Trump
administration just encourages their malfeasance. That’s ironic for
a “counterterrorism” mission. But the trip’s
effect on Iran may be its biggest blow to U.S. security.

The trouble isn’t so much Trump’s criticism of Iran, which is
partly accurate, though ill-timed, but the policy shift it
reflects. The regional posture Trump is eager to restore – U.S.
friendship with Saudi Arabia and antagonism toward Iran – always
rested on shaky reasoning. Changed circumstances have now made that
posture more or less deranged.

One reason for that is that Iran is on the U.S.-side in Iraq and Syria, where Iranian-backed
militias, including Hezbollah are helping fight the Islamic State
group. It’s true that these militias might threaten political reconciliation, but that’s
more a reason to work with the Iranians than to shun them.

A second reason to shift stances in the region is change in
energy markets. The conventional wisdom that said America should
lash itself to the Sauds to ensure steady oil supply followed
misapprehensions about global energy markets. Saudi production
never turned on U.S. support, and their supply problems were not as
big a threat to the U.S. economy as generally thought. Still, to
the extent U.S. reliance on Saudi oil production drove the
alliance, the shale revolution and increased U.S. energy production
undercuts it.

Third, the Iran nuclear deal is a peaceful means to influence
Iranian politics, but renewed U.S. antagonism could easily upend it. Iran is not a unified entity. Moderate forces have
gained sway in Iran. But Trump’s more antagonistic approach only
plays into the narrative of Iranian hardliners
wedded to hostile policies. That’s a recipe for undermining the
nuclear deal and letting U.S. hawks put us back on the path to war
with Iran.

The Trump administration’s plunge to the Saudi side is an
unfortunate return to the status quo. Hostility to Iran and
friendship with Gulf States is a kind of Washington foreign policy
dogma created by a history of hostility on one side and commerce on the
other.

In the long term, the U.S. should distance itself from both
sides. Our security doesn’t depend on extensive meddling on behalf
of any side. For now though, the imperative is to stop kowtowing to
the Saudis and antagonizing Tehran. The administration’s present
course will only heighten the region’s instability and extremism.
Things can always get worse.

John Glaser is director of foreign policy studies at the Cato Institute. Benjamin H. Friedman is a research fellow in defense and homeland security studies at the Cato Institute.

Take a Hike

Ike Brannon

For politicians, giving away money is fun, but telling others to
give away money is even better. That’s what the Washington, D.C.,
government is contemplating as it debates a new rule that would have employers subsidize
people who neither take the Metro nor drive to and from work. They
want to give a little something to the people who walk or bike to
work.

Right now the federal government allows companies to provide up
to $255 in parking benefits a month tax-free to employees; a
similar amount can be provided tax-free to people who take mass
transit. The proposal being considered would have companies give a
similar sum to people who walk or bike to work. Since there’s no
federal tax break for these activities, these incentives would, in
effect, be cash payments to simply say “thank you for walking.”

Here’s a general rule: If we subsidize everything, we
are effectively subsidizing nothing. It is of course true
that the federal government should not be giving tax breaks for
parking: In general, in-kind compensation should never be
incentivized over cash compensation (look at the mess that the tax
break for employer-provided health insurance created) but this is
especially true for an activity that has no salutary benefit for
society at all. Like driving to work.

Mass transit is already subsidized in the U.S., so additional
tax subsidies don’t make a whole lot of sense either-unless we look
at it in the context that we are already giving a tax break for
parking.

A proposal by the D.C.
city council to pay pedestrians who walk to work exposes the idiocy
of subsidizing any kind of commuting.

Since walking to work doesn’t add to congestion on the streets
or on our mass transit systems we should probably favorite it most
of all, but there’s still no strong reason to subsidize it. Unless,
that is, we consider the sad reality we’re already subsidizing all
other forms of transit.

The obvious answer to this conundrum is that the federal
government should scrap the tax break for employee parking and mass
transit. Since the tax reform effort being contemplated by Congress
and the White House will be looking for every single dime possible
to pay for possible rate reductions, this is as good a time as any
to end this benefit.

The Transit Center, a research institute devoted to
transportation research, estimates that getting rid of the parking
and mass transit subsidies would save over $100 billion over the next decade-enough to
fund a portion of any Trump infrastructure plan to boot.

My first boss, a kind man by the name of John Kerrigan, was a
terrible public speaker, and whenever he was obliged to give a talk
he would utter two minutes of trite banalities before pausing to
recognize one group of people in the audience and asking them to
stand, then another, and another until he had everyone standing and
clapping for themselves. He would then leave the stage.

The D.C. walking subsidy strikes me as something he’d
appreciate.

Ike Brannon is a former economist in the White House Office of Management and Budget and fellow at the Cato Institute.

Governments Should Stop Trying to Fix “Broken” Markets, and Focus on Not Breaking Them

Ryan Bourne

“The market is not working as it should” has
been Theresa May’s economic justification for energy price caps. In
most public policy debates it suffices to yell “market failure” or
the “market is broken” to rationalise any intervention you desire.
How many times in the past few years have we heard about a broken
housing/childcare/energy market without any analysis of the
underlying causes?

Economists, at least, have a very clear definition of market
failure: a deviation from a perfectly competitive world with
perfect information, no transactions costs, and no effects on third
parties from the production or consumption of the good or
service.

Theoretical government policies can then supposedly be applied
to remedy situations where these assumptions do not hold. But judge
any industry, from food through to manufacturing to healthcare, by
the unattainable standards set out above, and they will be deemed
failures.

The real question is not whether markets are perfect, but
whether government interventions to solve perceived failures do
more harm than good. In other words, markets may not be “perfect”,
but that does not mean they are perfectable by governments.

This is pertinent, because both Theresa May and Jeremy Corbyn
have used the “broken market” terminology regularly to justify
their policies. The impression they give us is that laissez faire,
free market capitalism is failing and ripping off consumers and
tenants, requiring an interventionist government.

“Doing something” for the
sake of acting to “restore faith” in markets is as naïve as it is
ahistorical.

In fact, the truth is closer to the exact opposite for the
housing, childcare and energy sectors they talk most about. The
desire now to “do something” stems from previous policy mistakes to
try to correct market failures — or, as economists would call
it, “government failure”.

To stop the supposed market failure of urban sprawl and
unplanned communities, for example, Britain introduced greenbelts,
land use planning regulations and essentially nationalized
development rights in the mid-20th century.

The economists Christian Hilber and Wouter Vermeulen estimated
that as much as 35pc of the average house price can now be
attributed to these planning constraints. High rents and prices, as
well as insufficient building, are primarily caused by very tight
land-use planning laws.

Indeed, the Conservative party has implicitly admitted this by
pledging less generous compensation for land owners subject to
compulsory purchase orders. Granting only the value of the land
today rather than the potential value with planning permission
means the Government gets to retain the uplift when permission is
granted. They want to do this precisely because this premium is
high, showing how distortive the Government’s monopoly power on
development is.

The proposed fixes from the Conservatives and Labour, in the
form of council house building or rent controls, are simply
ill-thought-through responses.

The past two decades have also seen the Government more involved
in childcare on market failure grounds. Childcare would be
underused absent state support, we were told, because parents would
not fully recognize the social benefits of more women working or
early education. Regulation was required because uninformed parents
would not choose the right amount of “high quality” care.

Successive governments have therefore formalized the sector and
regulated it more heavily, contributing to higher prices and
ballooning subsidies. The UK now has some of the most stringent
staff: child ratios in Europe, and mandates that staff and
childminders are in effect early years’ educators. The number of
childminders has fallen by more than half as a result. Now,
surprise, politicians are worried about the affordability of
care.

In energy, prices actually plunged in the UK between 1990 and
2004 when the sector was privatized and liberalized. Now,
environmental obligations to solve the market failure of climate
change continue to raise bills, and come on top of increased
wholesale prices.

Stephen Littlechild has highlighted on these pages how it was
the energy regulator Ofgem’s 2008 attempts to eliminate “unfair”
price discrimination too which actually led to an upward
compression with lower tariffs raised. Its restrictions on doorstep
selling and marketing likewise contributed to lower customer
switching rates.

Now the Conservatives see both high bills and low switching as
problems and want to intervene further with a price cap. Yet nobody
from the party can explain how this will make providers more
efficient and able to deliver the lower prices economically.

The lesson is clear: government intervention has been highly
damaging. To make the sectors more competitive and responsive, any
government would need to unpick the knot of existing policies
rather than engage in further crude interventions.

Adopting price controls and subsidies simply to signal you care
would be a mistake. “Doing something” for the sake of acting to
“restore faith” in markets is as naïve as it is ahistorical. Most
interventions by the Government have perverse consequences, without
solving the perceived problem. This leads to more frustration and a
growing demand for ever-tougher action.

Ryan Bourne holds the R Evan Scharf Chair for the Public Understanding of Economics at the Cato Institute.

Seven Ways Trump and Congress Can Improve Infrastructure without Spending a Dime of Taxpayer Money

Ryan Bourne

“Infrastructure Week” sees the U.S. Chamber of Commerce, unions,
the American Society of Civil Engineers, and many others telling
Congress that “It’s Time To Build.” Yet a quick perusal of
Infrastructure Week’s website suggests a more accurate description
of their demand is, “It’s Time to Spend More Taxpayer Money.”

This is a shame. With President Trump pledging $1 trillion of new public and private
investment
across a decade and Democrats preferring direct federal spending, the group
could be pushing at an open door. But the cross-party obsession on
federal spending levels ignores opportunities to make
infrastructure development more efficient without increasing
demands on taxpayers.

In order to get the biggest “bang for our buck”, infrastructure
policy should encourage innovation, cost-effective provision, and
investment where it is most economically beneficial. This means
putting aside short-term concerns about “creating jobs” and
“shovel-ready projects,” and focusing on long-run growth. Here are
seven ways to do that:

In order to get the
biggest “bang for our buck”, infrastructure policy should encourage
innovation, cost-effective provision, and investment where it is
most economically beneficial.

  1. Government should only be involved in projects where there are
    high social returns that the private sector would not provide. We
    are way beyond this in the United States. Other countries show the
    possibility of having well-run and maintained privatized airports
    (the United Kingdom), air traffic control systems (Canada) and
    railways (Japan). Many areas of U.S. infrastructure are ripe for
    privatization, and the experience of the U.K. and elsewhere suggests
    this could lower prices for consumers without compromising
    quality.
  2. The burden of responsibility for spending and taxation on
    projects should be shifted towards states. Federal aid often
    distributes money to the detriment of economic growth. The Highway
    Trust Fund, for example, disproportionately benefits large,
    relatively underpopulated areas, rather than investing in areas of
    rapid growth. Harvard economist Ed Glaeser has outlined how
    “Alaska received $484 million in the 2015 highway-aid apportionment
    … about $657 for each Alaskan” while “New York State received $1.62
    billion, or $82 per person.” Clearly, this does not reflect
    economic demands.
  3. The federal government should remove barriers to user charging,
    such as tolling restrictions on interstate highways and the cap on
    passenger facility charges at airports. User charging provides
    incentives to reduce congestion and ensure development closely
    aligns with demand. Having clear revenue streams associated with
    assets also makes private sector investment more likely. The
    economic benefits could be substantial. The Federal Highway
    Administration estimates congestion pricing could reduce the amount
    of capital investment required to meet the same goals for the
    highway system by around 30 percent.
  4. Decisions on what government projects to undertake given scarce
    resources should be decided by selecting those with the highest
    benefit/cost ratios. Though governments around the world tend to be
    overoptimistic about the benefits of major projects generally, the
    Federal Highway Administration has estimated selecting highway
    projects on this basis could see the same level of benefits
    delivered for about 25 percent less cost.
  5. The tax bias towards government debt financing of projects
    should be ended. Under present federal income tax law, the interest
    income you receive from investing in municipal bonds is free from
    federal income taxes, which is not the case for private debt. This
    tips the deck in favor of government investment and deters private
    infrastructure ventures.
  6. Environmental regulations which delay and raise the cost of
    projects should be streamlined. A report for the outgoing Obama administration estimated that
    “the average time to complete a [National Environmental Policy Act]
    study increased from 2.2 years in the 1970s … to 6.6 years in
    2011.” This increases costs and adds significant uncertainty to a
    project, deterring private investment. Imposing time limits for
    agency decisions or narrowing the Act are two crude ways to curb
    this trend.
  7. Finally, regulations which raise the cost of providing
    infrastructure should be repealed. The federal Davis-Bacon Act
    commits federal construction projects to pay “prevailing wages” for
    construction workers, often meaning union rates at a significantly
    higher cost. Repealing the Act could have saved taxpayers $13 billion between 2015 and 2023, according to
    the CBO. Likewise, Buy America regulations impose requirements that
    federal construction projects use American steel, iron, and other
    products in highway construction unless waivers are granted, which
    also raises costs. This could get worse of course, if the Trump
    administration imposes further import restrictions on steel
    imports.

Trump has a huge opportunity to overhaul all these areas to
improve infrastructure for generations to come. But if he is to do
so, he will need to cast aside the notion from “Infrastructure
Week” and advocacy groups that improving infrastructure is all
about more spending, and instead focus on getting the structures
and institutions right.

Ryan Bourne is the R. Evan Scharf Chair for the Public Understanding of Economics at the Cato

Who Poses Tougher Challenge for Donald Trump: South Korea’s Moon Jae-In or the North’s Kim Jong-Un?

Doug Bandow

Another day, another North Korean missile test it seems. But the
new South Korean leader, Moon Jae-in, may prove to be a bigger
problem for President Donald Trump than North Korea’s Kim
Jong-un.

Unlike America’s presidential election, South Korea’s contest
yielded no surprise. Left-leaning Moon topped a multi-member field
to take over from disgraced Park Geun-hye, who was impeached and
removed from office on corruption charges.

The contest was a rushed affair, held several months earlier
than originally scheduled. Moon was the losing candidate five years
ago and had served the last liberal president. He won support by
criticizing South Korea’s influential corporate conglomerates, or
chaebols, targeting income inequality, and promising to reduce
unemployment.

The ruling party split over Park’s ouster and had little time to
recover. Moon was briefly threatened by a more centrist opponent
who had backed him in the last election, but then faded in the
stretch after a bad debate performance. Moon won with 41 percent of
the vote, not exactly a record mandate, but nevertheless providing
a sizeable margin over the next finisher.

Although Moon will face opposition to his leftish economic
nostrums, his foreign policy views likely will generate more
controversy at home and abroad. President Moon formally affirmed
his commitment to the alliance with America in a post-election
phone call with Donald Trump, but the former may be less enamored
of his nation’s long relationship with Washington than he
admits.

U.S.-South Korean ties
have varied over time, in response to changing international
conditions as well as shifts in the respective
governments.

Moon rose to prominence as a left-wing lawyer and human rights
activist. He was jailed for opposing the long-running military
dictatorship, which gave way in 1987 only in response to mass
demonstrations by Koreans demanding elections. In 2002 he helped
elect Roh Moo-hyun, who won a narrow victory in the midst of
surging anti-American sentiment. Roh stood out among South Korean
presidents for his hostility toward U.S. policy, though the latter
accepted the alliance as a reality. Moon was Roh’s chief of staff
and lost to Park five years ago. As head of the principal
opposition party, however, he was well-positioned when Park’s
presidency collapsed.

Moon’s views are no secret, though like any good politician he
downplayed his more controversial views during the brief campaign.
He started as an opponent of the THAAD anti-missile system, which
has been deployed in the ROK despite China’s angry opposition. He
urged revival of the so-called Sunshine Policy, which sought to win
North Korea’s friendship with aid and commerce. (His proposal has
been nicknamed Moonshine.) He promoted the idea of an “economic
community” with the North, urged talks with North Korea’s Kim
Jong-un, endorsed revival of the Six-Party talks (which include
Japan, Russia, and China), and expressed his desire to take his
first foreign trip to Pyongyang.

As the polls tightened he carefully qualified his positions,
adding conditions for any approach to the Democratic People’s
Republic of Korea. Yet many suspect such promises were merely
convenient election add-ons. In fact, some of Moon’s top appointees
share a radical past. For instance, his newly appointed chief of
staff, 39-year-old Im Jong-Seok, once was jailed for promoting
contacts with the North and led a student group which occupied the
U.S. ambassador’s office.

There’s nothing wrong with South Koreans criticizing both
America and the U.S.-ROK alliance. In fact, the South is longer
overdue in taking over responsibility for its own defense. Today
South Korea enjoys a roughly 40-1 economic advantage and 2-1
population edge. The South is ahead on most other measures of
national power as well; it could devote as much money as necessary
to its military.

However, Moon’s attitude towards the North suggests more than a
tinge of naiveté. Engagement makes good sense, but any contacts
should be without illusion. To appear anxious to visit Pyongyang is
reminiscent of President Kim Dae-jung’s historic trip north in
2000, which, it turns out, was bought with a half billion dollars
in payments from Hyundai and the South Korean government.

Moreover, the new administration in Seoul is likely to run into
sharp conflict with President Trump. There is no shortage of
inconsistencies among the positions articulated by the American
president and his aides. Indeed, the latter have spent more than a
little time walking back President Trump’s comments.

Nevertheless, in broad terms Washington is committed to applying
maximum pressure on the North, through military threats and
enhanced economic sanctions. The administration plans to condition
talks with North Korea on prior agreement to America’s demands:
dismantling the DPRK’s nuclear and missile programs. The U.S.
expects China to more fully enforce existing sanctions and make
additional cuts in aid and trade.

South Korean officials whom I met last week were particularly
circumspect with their government in transition and generally
avoided direct criticism of the American president. The best
argument they could make was that Presidents Moon and Trump have
used some of the same language to describe their respective
positions, but it is obvious that the meanings differ
substantially. Such details matter.

For instance, South Korea’s initiation of a new round of
investment and aid would undercut the U.S. objective of “maximum
pressure” on the North. If Seoul increased economic ties,
Washington could not easily demand that China sever its commercial
connections with the North. If President Moon flew to Pyongyang to
negotiate a nuclear freeze, Washington’s insistence on full
disarmament before talks began would be stillborn. The more America
threatened military strikes, the more uncomfortable and even
antagonistic South Koreans would become: most were appalled that
some U.S. officials freely admit a willingness to risk triggering a
Second Korean War.

The two presidents spoke last week by phone shortly after Moon
took office and have agreed to a summit next month. Talks might
help, but even friendly discussions won’t hide the fact that the
two countries’ interests differ in substantial ways. And if
President Moon pursues policies which undercut Washington’s
objectives, relations could prove quite difficult: President Trump
doesn’t suffer criticism gladly. The frigid relationship between
George W. Bush and Kim Dae-jung might serve as a model.

U.S.-South Korean ties have varied over time, in response to
changing international conditions as well as shifts in the
respective governments. However, the Trump-Moon match likely will
present a special challenge. Donald Trump may find the serious and
principled Moon to be a tougher adversary than Kim Jong-un.

Doug Bandow is a Senior Fellow at the Cato Institute. He was a former Special Assistant to President Ronald Reagan, and is a Senior Fellow in International Religious Persecution with the Institute on Religion and Public Policy.

Washington’s East Asian Allies May Learn the Perilous Cost of Security Dependence

Ted Galen Carpenter

Washington has long encouraged its East Asian allies to rely
heavily on the United States for their security. Despite occasional
grumbling, the allies have willingly accepted that arrangement. The
receptive attitudes are not surprising on either side. For the
allies, depending on the United States for defense offered some
important advantages and benefits. It reduced the need for large,
expensive military establishments, thus freeing up financial
resources for economic progress and an assortment of domestic
needs. Today, the Republic of Korea (ROK) spends a mere 2.5 percent
of its Gross Domestic Product on the military, while Japan still
adheres to its self-imposed limit of 1 percent. The expenditures by
Australia and the Philippines are equally modest.

In addition to the financial savings, it seemed highly
beneficial to the allies to have a superpower guaranteeing their
security. During the Cold War, that arrangement discouraged
bullying (or worse) on the part of the Soviet Union or China, and
East Asian populations welcomed the greater sense of security.
There were always potential drawbacks and risks involved in being
so dependent on the United States, but until recently the perils
were not terribly obvious. Now, though, alarm bells should be going
off in those East Asian capitals.

The advantages for the United States were always a bit subtler,
but policymakers deemed them important. Most notably, U.S. security
primacy reduced the danger that a current ally might someday become
a challenger. That concern was especially acute with respect to
Japan. The original draft of the Pentagon’s 1992 policy planning guidance document
contained language conveying thinly disguised worries that another
nation (implicitly Japan) might seek to exercise independent power
and influence in a way that would not benefit U.S. interests. The
document asserted bluntly that Washington’s policy needed to
prevent any country from challenging America’s regional or global
preeminence.

In addition to that concern, U.S. leaders encouraged continued
security dependence to reduce the risk that an ally might engage in
rash action that could draw America into an unwanted crisis. As
time passed, Washington did press Japan, South Korea, the
Philippines, and Australia to do more for their own
defense-especially to increase their defense budgets modestly. But
there was no corresponding pressure for them to take independent
security initiatives. Quite the contrary, the focus was on
enlisting those countries to become more supportive in helping to
advance U.S. policies in the region. Thus, over the past 15 years
or so, Washington has sought to transform its alliances with Japan,
the ROK, and Australia from purely bilateral arrangements to defend
the homelands of those countries into broader arrangements to deal
with “regional contingencies.” The latter is little more than a
code phrase for a subtle containment policy directed against
China.

The nature of Washington’s alliance network was always based on
the assumption that the United States was firmly in charge of
policy decisions. The risk inherent to America’s allies from that
arrangement is now becoming increasingly evident. The Trump
administration’s erratic, often hardline statements regarding North Korea
underscore the danger to America’s security dependents. South Korea
and Japan would both have a tremendous amount to lose if an armed
conflict broke out between Washington and Pyongyang. Yet the
decision to escalate to that level would be made by U.S. leaders
rather than South Korean or Japanese leaders. The United States
might or might not show its allies the courtesy of consulting them
and seeking their input, but the final determination would be made
in Washington, not Seoul or Tokyo.

That point should have become apparent during the 1994 North Korean nuclear crisis, when Bill
Clinton’s administration seriously considered launching air strikes to
destroy Pyongyang’s embryonic nuclear weapons program. Fortunately,
that crisis was averted when former President Jimmy Carter
successfully negotiated the preliminary provisions of what became a
few months later the Framework Agreement freezing North Korea’s
nuclear program.

Decisions about war and
peace in the region will be made in Washington, not the East Asian
capitals, even though any adverse consequences of such decisions
would be borne primarily by nations in the region.

But the crisis could easily have resulted in war, and that would
have been horrific for South Korea. The location of Seoul, the
capital and largest metropolitan area, barely 50 kilometers from
the Demilitarized Zone separating the two Koreas, would have
guaranteed massive destruction and civilian casualties from a North
Korean counterattack in the form of an artillery barrage. The
situation may be even more perilous today, since Pyongyang has
missiles that can strike targets throughout South Korea and Japan.
Even if North Korea has not yet miniaturized nuclear warheads to
place on those missiles, the damage could be considerable. And if
the North has perfected that technology, the consequences to Japan
and the ROK would be catastrophic.

A confrontation between the United States and North Korea is not
the only scenario that could expose the perilous potential cost to
the allies of an overreliance on Washington. The growing tensions
between the United States and China are another source. Beijing’s
increasingly assertive policies in both the East China Sea and the
South China Sea, and the mounting tensions between the mainland and
Taiwan, have produced expressions of grave concern in U.S. policy
circles. Although there is no imminent danger of war between the
two great powers, their policies seem to be on a collision course
over the long term. Again, despite the potential hazards to their
countries, the allies would have little ability to restrain their
American protector if U.S. leaders decided on a confrontational
policy to rein-in Beijing’s ambitions.

The benefits to the East Asian allies of their security
dependence on the United States have been considerable. But there
is a very substantial downside, and that aspect is becoming
increasingly apparent and worrisome. The allies give up their
decision-making autonomy when they rely on America for essential
aspects of their defense. Decisions about war and peace in the
region will be made in Washington, not the East Asian capitals,
even though any adverse consequences of such decisions would be
borne primarily by nations in the region. That reality should
convey to America’s allies that free-riding on U.S. security
efforts is not really free. Indeed, the price of continued security
dependence could turn out to be ruinous.

Ted Galen Carpenter is senior fellow for defense and foreign policy studies at the Cato Institute. 

The U.S.-South Korea Alliance Is Now Asia’s Oddest Couple

Doug Bandow

The Trump administration has placed North Korea at the top of
its priority list. Despite threatening war on the Korean Peninsula,
however, the president so far has paid little attention to Seoul’s
perspective. President Donald Trump consulted with both Chinese
president Xi Jinping and Japanese prime minister Shinzo Abe, but
made no similar call to South Korean leaders.

That in part reflects the fact that the Republic of Korea only
last week ended a lengthy political crisis. President Park Geun-hye
was charged with corruption and impeached by the National Assembly
last December; in the interim the appointed prime minister served
as acting president. Moon Jae-in was elected to replace her last
Wednesday, in a vote advanced from December of this year.

Presidents Moon and Trump spoke last week, with the latter
extending a summit invitation. But such a meeting might divide as
much as unite. For instance, when President Kim Dae-jung visited
President George W. Bush in Washington in March 2001, their
differences were on public display.

Just as Presidents Kim and Bush were very different, so are
Presidents Moon and Trump. Moon’s father was a refugee, and
President Moon served in South Korea’s Special Forces. He was
jailed for protesting against the military dictatorship and became
a human-rights lawyer.

He was friends with another activist attorney, Roh Moo-hyun,
eventually working to elect the latter as president, for whom he
served as chief of staff. Moon ran for president in 2012, losing
narrowly to Park. He headed the opposition party in the interim and
was well positioned when Park’s presidency imploded, essentially
taking down the conservative ruling party as well.

President Moon has a well-developed ideology. A liberal, his
economics run toward Bernie Sanders. He promised to reign in South
Korea’s dominant chaebols, or corporate conglomerates. His foreign
policy is pacific, most notably supporting the “Sunshine Policy,”
first initiated by President Kim Dae-jung, a former dissident
elected president in 1997, and continued by President Roh.

As a result, the South transferred an estimated $10 billion in
various forms to Pyongyang even as the latter was developing
missiles and nukes. The Kaesong Industrial Complex was constructed
in the North, for ROK companies that hired North Korean workers,
providing Pyongyang with around $100 million in hard currency
annually. Moon advocates reopening and even expanding Kaesong. Moon
also proposed resuming the Six-Party Talks, intended to lead to
denuclearization, as well as initiating bilateral talks, including
a third North-South presidential summit in Pyongyang.

Matched with, and possibly against, Moon is Donald Trump. His
administration’s policy toward both South and North Korea is, at
best, in flux. The president sharply criticized the alliance during
the campaign, then seemed to embrace it. He proposed talking with
the North’s Kim Jong-un, even saying he’d be honored to do so, but
his aides set conditions that the president didn’t mention. He
demanded that the ROK spend more on the military and provide $1
billion for the THAAD missile system, only to have those positions
downplayed, even dismissed, by his appointees. About the only
policy he and those who supposedly work for him agree on is
threatening military action, which most observers, and almost all
South Koreans, view as inconceivable.

Officially, the South Korean government says little about the
Trump presidency. Even privately, officials are circumspect. With a
new president just elected, they emphasize that they can’t speak
for their government. And even if they could, they wouldn’t openly
criticize the U.S. government. Nevertheless, people with whom I
spoke seemed uncomfortable discussing future relations with the
Trump administration.

Those outside government are less hesitant to express their
views. President Trump’s criticism of the alliance and especially
his inconstancy unsettle even America’s best friends. Long reliant
on America for their nation’s defense, they are nervous about the
future. Talk of military action against the North is particularly
disconcerting: I was asked more than once, would the administration
really risk triggering another Korean War?

President Trump has his defenders, but they are a distinct
minority. A couple of analysts argued that the rhetoric of the two
presidents was similar-mention of possible negotiations and
preconditions for engagement. One even repeated National Security
Advisor H. R. McMaster’s unconvincing dismissal of the president’s
demand for $1 billion for THAAD: that the comment merely reflected
the president’s general concern with burden sharing. Another
researcher believed the threat of military action merely reflected
Washington’s past commitment to South Korea’s security.

No doubt the two
governments will do their best to paper over difficulties as they
arise. But President Moon strongly believes in a different path,
seemingly incompatible with the Trump administration’s stated
plans.

All this is likely wishful thinking.

President Moon made his political career battling Korea’s
long-time military dictatorship and, indirectly, the United States,
which backed that regime. Roh, aided by Moon, was elected in part
due to a surge of anti-Americanism triggered by the deaths of two
teenage girls in a traffic accident involving U.S. soldiers.
Although Roh moderated his position toward the alliance after his
election, the tension was palpable.

Moon was committed to the Sunshine Policy, which emphasized
engagement over confrontation with North Korea. He maintained that
commitment despite Pyongyang’s continued missile and nuclear
development and sometimes violent provocations.

During the campaign he urged revival of the Sunshine Policy,
which some have nicknamed the Moonshine Policy, including reopening
Kaesong. He even talked about creating an “economic community” with
the North.

Moon also advocated negotiation. He urged restarting the
Six-Party Talks, involving China, Russia, Japan, the United States
and the two Koreas. He proposed bilateral talks with the North,
explaining that he wanted to make his first foreign trip to
Pyongyang. He opposed deployment of THAAD, a joint U.S.-ROK
initiative intended to protect against a North Korean attack. And,
unsurprisingly, he would not support starting another war on the
peninsula. Perhaps most important, he talked about the ROK taking a
more active role in policy toward the North.

A good politician, Moon softened many of his positions during
the campaign as his lead shrunk. He talked of setting conditions
for negotiations, temporized on THAAD and announced that
Washington, instead, would be his first travel destination.
Nevertheless, in all of these areas he still varies sharply from
the Trump administration. And many of his key staffers are from the
radical left. For instance, his chief of staff,
thirty-nine-year-old Im Jong-seok, once organized a student
takeover of the U.S. ambassador’s office and even was jailed for
promoting contacts with Pyongyang.

Moon’s perspective is perfectly defensible, though naïve, at
least regarding North Korea’s willingness to moderate its behavior.
The North’s latest missile test suggests that Pyongyang is not in a
conciliatory mood. However, the alliance long ago lost its raison
d’être. Having dramatically surpassed North Korea economically and
in most other measures of national power, Seoul is capable of
defending itself and deciding its own policy toward the North.

Nevertheless, the alliance remains-and it likely faces rough
waters. In general, Moon is less likely to acquiesce to
Washington’s views.

The Trump administration stated its intention to apply maximum
pressure on the North. That means more economic sanctions and
threats of war. The president indicated his interest in talks, but
apparently only with preconditions, most notably agreeing to
Washington’s demands first. (Alas, North Korea’s most recent
missile test likely is Kim Jong-un’s response to President Trump.)
The administration also placed great emphasis on winning Beijing’s
assistance in limiting aid and trade with the North. Although
Secretaries Jim Mattis and Rex Tillerson downplayed the issue of
burden sharing, it is perhaps the only constant of the president’s
comments on the alliance.

In all of these areas the Moon administration threatens to
undercut, even obstruct, Washington’s objectives. More South Korean
economic engagement necessarily eases pressure on the North. If the
South increases aid and investment, Washington can hardly insist
that China cut its economic ties with the North. South Korean
negotiations with few preconditions would leave the United States
isolated in refusing to talk unless Pyongyang accedes to the
former’s demands. South Korean policymakers uniformly contend that
Seoul owes nothing more financially. And there is little doubt that
Moon’s government would oppose any proposed military action.

No doubt the two governments will do their best to paper over
difficulties as they arise. But President Moon strongly believes in
a different path, seemingly incompatible with the Trump
administration’s stated plans. At the same time, President Trump is
likely to react badly to any resistance to his priorities. North
Korean behavior might drive the two allies together, but if not
South Koreans may find end up paying a high price for
subcontracting out their security to Washington.

Doug Bandow is a Senior Fellow at the Cato Institute and a former
Special Assistant to President Ronald Reagan. He is the author of
Tripwire: Korea
and U.S. Foreign Policy in a Changed World
and co-author of
The Foreign
Conundrum: America’s Troubled Relations with North and South
Korea
.

The Danger of Invoking National Security to Rationalize Protectionism

Daniel J. Ikenson

President Trump recently initiated two separate investigations
into whether the U.S. national security is threatened by
artificially inflated global supplies of steel and aluminum, which
he attributes to excessive Chinese production. Affirmative findings
would give the president statutory authority to raise import
barriers to protect domestic sources. But invoking national
security to justify protectionism is an extreme measure — the
“nuclear option” of international trade law — that would
generate some undesirable consequences for U.S.-China relations, as
well as for the rules-based trading system itself.

Since the founding of the General Agreement on Tariffs and Trade
(GATT) in 1947, governments have acknowledged the perils of
protectionism and the importance of reducing trade barriers to
create sustainable conditions for economic growth. Yet, to this
day, most governments remain unwilling to dispense with
protectionism entirely. Under GATT and World Trade Organization
(WTO) rules, governments are permitted to raise tariffs,
conditionally, in response to things like “unfair” trade practices
or unexpected import surges that injure or threaten to injure
domestic industries, public health or safety concerns, or national
security threats.

As compelling as the economic and moral arguments for free trade
are, governments would never consider tariff reduction a higher
priority than their obligations to protect national security. So,
in 1947, a massive — but necessary — loophole was born
with the GATT. Article XXI of the GATT is known as the “National
Security Exception.” It permits members to impose trade
restrictions for purposes of national security without obligating
them to demonstrate that their rationale conforms with some agreed
definition of national security or national security threats. The
key to this loophole not being abused is recognition by all parties
that prudence — not political expediency — must inform
any government’s decision to invoke national security as its reason
for raising trade barriers.

Legal scholar Roger Alford put it this way in a 2011 law review
article:

The security exception is an anomaly, a unique
provision in international trade law that grants the Member States
freedom to avoid trade rules to protect national security. In the
long history of GATT and the short history of the WTO, that freedom
has never been challenged seriously. Member States understand the
exception to be self-judging, and presume that it will be
exercised with wisdom and in good faith. Thus far, the
record has been impressive. While no doubt there have been
departures, the self-judging security exception has worked
reasonably well. It certainly has not undermined the effective
functioning of the WTO (Emphasis added).

But that could very well change if the Trump administration
determines that imported steel or aluminum presents a national
security threat, and raises tariffs as a result. The argument that
national security is threatened by an abundance of the very raw
materials allegedly needed to protect national security is so
flimsy that it would be an open invitation to every other WTO
member to invoke national security to bestow protectionist favors
on their own politically important domestic interests.

Of course, the protectionist argument is that the bounty of
low-priced steel and aluminum would disappear once U.S. producers
were run out of business, and foreign “adversaries” put the squeeze
on U.S. buyers by withholding supply. In other words, products so
important to U.S. national security — the argument goes
— would not be supplied by non-adversarial foreign or
domestic producers, even with supply shrinking and prices rising.
That frequently invoked, threadbare, protectionist hypothetical has
virtually zero likelihood of coming to pass. However, in the spirit
of “we can never be too sure,” the U.S. government should take
measures that could lead to the destruction of the trading system,
the cost of which would present a real and significant national
security threat.

If the United States were
to get away with such rogue protectionism through this loophole, it
is highly likely that other governments would follow
suit.

Even if this U.S. action were formally challenged by another WTO
member, the Dispute Settlement Body (if it came to adjudication)
would accord great deference to the United States as to what it
considers a national security threat. It is simply implausible that
international trade jurists would seriously question a member
government’s interpretation of a threat to its own national
security. So, if the United States were to get away with such rogue
protectionism through this loophole, it is highly likely that other
governments would follow suit.

Since 2006, the United States and China have been engaged in a
low-grade trade war over semiconductors and information and
communications technology (ICT) products. The Chinese government
has made it quite clear that it considers the attainment of
technological preeminence one of its main economic objectives and
that developing a self-sufficient, home-grown semiconductor
industry through protectionist measures is the way to realize that
goal. In various manifestations, China has been employing
indigenous innovation policies for over a decade.

The United States has responded by essentially blocking China’s
most successful ICT companies from participating in or supplying
U.S. telecommunication infrastructure projects under the guise of
cybersecurity policy. China has responded by implementing a set of
new policies, including the National Security Law and the
Cybersecurity Law, which essentially raise the costs for U.S. and
other foreign technology companies to access China’s market.
Meanwhile, over the past several months, U.S. policymakers have
begun turning up the heat to make it more difficult for Chinese
buyers to acquire U.S. technology companies and serious
consideration is being given to the idea of making it easier for
the U.S. Committee on Foreign Investment in the United States
(CFIUS) to recommend that the president block such
acquisitions.

If the United States invokes national security to raise tariffs
on steel or aluminum, China would be less inhibited from declaring
its dependency on foreign semiconductors a national security crisis
and formally imposing tariffs. Likewise, India, which worries
deeply about food security, might justify new restrictions on
agricultural imports as a national security imperative. Pandora’s
Box will have been opened wide, and the trading system will be
burdened under the weight of the troubles that escaped.

Daniel Ikenson is the director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute.

THAAD in South Korea Won’t Defuse Current Tensions

Eric Gomez

Last week
U.S. officials confirmed
that the Terminal High Altitude Area
Defense (THAAD) missile defense battery deployed
on a South Korean golf course
reached initial operating
capability. As tensions grow on the Korean peninsula, THAAD’s
deployment is supposed to improve deterrence by bolstering the
ability of the United States and South Korea to defend against
North Korean ballistic missiles.

While THAAD does reduce the chances of a successful North Korean
missile attack against important U.S. military bases and some South
Korean cities, it probably won’t do much to cool down the situation
on the peninsula. In fact, THAAD could contribute to instability
and increase the likelihood of a crisis.

Why is that? First, it is important to understand what the THAAD
system is and isn’t capable of doing.


THAAD is not able to defend Seoul
from North Korean missiles
because most of the capital city is just outside the 200 km range
of THAAD’s interceptors. While not in a position to defend Seoul,
THAAD could protect several locations that are essential for
conducting sustained combat operations against North Korea, such as
the port of Busan and Kunsan air base. Moreover, even if THAAD were
deployed closer to Seoul, it would not be able to defend against
the
conventional artillery threat to the city
.

The Trump administration
will have to find another way out of this crisis.

Critically, THAAD would not be able to shoot
down a North Korean missile test
or an intercontinental
ballistic missile (ICBM) heading for the U.S. homeland. THAAD can
only engage missiles as they fall back down to earth. If a missile
is falling within the engagement range of THAAD’s interceptors,
then North Korea is not testing a missile, it is attacking South
Korea.

It will not work for U.S. homeland defense, either. The only
thing capable of defending the continental U.S. from ICBMs is the
Ground-Based
Midcourse Defense (GMD) system
, which has a spotty testing
record. While THAAD could not shoot down an ICBM, its radar could
provide targeting data to the GMD to improve the chance of a
successful intercept, but that is hardly a guarantee of
success.

With these technical limitations in mind, THAAD’s main purpose
is to provide a protective umbrella for U.S. air force bases in
South Korea, and the port of Busan, the primary port of entry for
follow-on U.S. ground forces in the event of a long-term fight with
North Korea.

But although missile defense systems are usually viewed as
solely defensive, the protection they provide also creates a
perverse incentive for U.S. military planners to use force
offensively. If U.S. planners believe essential military facilities
are relatively safe from missile attack, they could be emboldened
to launch first strikes against North Korea’s nuclear forces.

Currently, the United States, South Korea, and North Korea all
face strong incentives to go first in a conflict. The best way for
the United States and South Korea to limit the damage of a North
Korean attack is to destroy the North’s nuclear weapons on the
ground or
kill Kim Jong Un
before he can give the order. Unfortunately,
this also places Kim Jong Un in a “use
it or lose it
” position to attack first with his nuclear
weapons in the hope of short-circuiting a disarming attack.

Before THAAD, a disarming blow was incredibly risky because of
the damage that just a few surviving nuclear-armed missiles could
do to U.S. forces in South Korea. The risk and danger of a
disarming strike are both still high, but THAAD does reduce them by
providing a better shield against any weapons that may survive the
first strike.

Ultimately, THAAD will do little to defuse the current tensions
on the Korean peninsula. The greater protection it provides to U.S.
troops could make U.S. escalation less costly and therefore more
attractive. The Trump administration will have to find another way
out of this crisis.

Eric Gomez is a policy analyst for defense and foreign policy studies at the Cato Institute.

Why Is North Korea the United States’ Problem?

Doug Bandow

Seoul, Republic of Korea—Just 30 or so miles from the
Demilitarized Zone, which separates South and North Korea, sits
Seoul, the political, industrial, and population heart of the
Republic of Korea. It remains vulnerable to North Korean attack,
but is as chaotic as usual. Lately it has been convulsed by a
domestic political crisis, leading to the election of a new
left-wing president, Moon Jae-in, and foreign-policy challenges,
including China’s economic assault in retaliation for
deployment of the THAAD missile defense system.

Even more threatening, however, may be the Trump
administration’s confrontational stance toward the North. So
far most South Koreans assume President Donald Trump is bluffing
with his threats of war. Even so, tensions between the South and
U.S. are likely to rise, since President Moon advocates a much more
conciliatory policy toward Pyongyang. Moreover, President Trump
admits that he doesn’t know much about foreign
policy—as Chinese President Xi Jinping learned when the
latter patiently explained to his American counterpart
Beijing’s limited influence over North Korea. Anything could
happen.

Despite his ignorance, President Trump apparently is certain
that Pyongyang’s weapons programs are Washington’s
problem. Why? No one outside the borders of the Democratic
People’s Republic of Korea wants Kim Jong-un to have nukes at
his command. Washington officials are particularly insistent that
the North should not possess nuclear weapons atop ICBMs capable of
reaching the U.S. That prospect has pushed the Trump administration
into frenetic if not necessarily productive activity.

The price of America’s
reflexive defense of populous and prosperous allies is getting much
higher.

Yet it’s worth considering why the Kim regime is working
so hard to refine its nuclear technologies and expand its missile
capabilities. Such weapons are expensive and result in widespread
international opprobrium. But they offer important benefits as
well.

Nukes would be useful in an offensive campaign against South
Korea, though not so long as the latter is defended by America.
Nuclear weapons offer prestige; otherwise no one else on earth
would much care about the status of the poor, isolated state. Nukes
also provide an opportunity for extortion. Although the message,
“Send money or else,” hasn’t been working well of
late.

Finally, nuclear-tipped missiles provide a powerful deterrent.
Which North Korea has good reason to believe it needs.

A quick glance at a map illustrates that the North does not
threaten America. In fact, the Democratic People’s Republic
of Korea has never threatened America. The two nations do not share
a land border, so Pyongyang could not easily send its vast legions
to conquer the U.S., as in the last iteration of the movie Red
Dawn. The DPRK does not have a Blue Water navy, so no armada could
invest and invade Guam, let alone Hawaii. Since North Korea
possesses no long-range bombers, Kim’s air force could not
reduce U.S. cities to rubble. And even now the North does not have
ICBMs capable of reaching, let alone accurately targeting,
America.

In the normal course of events, the Kim dynasty wouldn’t
give the U.S. much thought. North Koreans certainly wouldn’t
be feverishly working on weapons designed to threaten the global
superpower, which has the capability to incinerate Pyongyang many
times over.

However, Washington has been threatening the North for 67
years.

Of course, U.S. officials believe they had good reason to do so.
The inter-Korean struggle initially mattered to America because it
was an important front in the Cold War. Without U.S. intervention
the Republic of Korea would have been swallowed by Kim
Il-sung’s army, disappearing into a modern form of the Dark
Ages. Even after formal hostilities ended, the U.S. presence was
initially necessary to protect the ROK, a war-ravaged,
impoverished, and unstable dictatorship.

Washington placed infantry and armored units on the
North’s border, capable of invading North Korea, as they did
during the Korean War. Washington-based aircraft throughout the
region capable of bombing North Korea, as they did during the
Korean War. And Washington deployed naval vessels capable of
conducting operations against North Korea, as they did during the
Korean War. Indeed, the U.S. threatened to go to war against the
DPRK whenever Washington deemed it necessary or appropriate.

In the post-Cold War world, the threat to Pyongyang only
increased. North Korea essentially lost its allies. After the
Soviet breakup, Moscow initiated a friendly relationship with South
Korea. The People’s Republic of China followed suit. Neither
would likely go to war with America on the North’s behalf.
The DPRK almost certainly would be alone in any crisis.

Moreover, Washington took on the role of global dominatrix,
effectively dividing the world into two camps: countries which bomb
other countries and countries which get bombed. And the latter
group is mostly, though not entirely, made up of countries which
get bombed by the U.S.

In recent decades Washington has imposed regime change on a
succession of nations. Grenada, Panama, Haiti, Somalia (to the
extent there was a regime to change), Afghanistan, Iraq, and Libya.
The U.S. became a de facto co-belligerent with Saudi Arabia
attempting to do the same in Yemen. American officials used more
limited force, mostly aid to insurgents, with less success to do
the same in Nicaragua and Syria. The U.S. went to war to prevent
ethnic Serbs from breaking up Bosnia and then intervened to break
up the state of Serbia. Even now Washington routinely threatens war
against Iran.

Then there is North Korea, enemy of an American treaty ally,
international outcast, and member of the infamous Axis of Evil,
with leaders loathed in Washington. Could there be a better
candidate for regime change? It is a good example of the dictum
that even paranoids have enemies.

All of which makes North Korean missile and nuclear programs a
logical response to a dangerous security environment. And explains
Pyongyang’s current focus on America, punctuated by typically
hyperbolic outbursts. (In contrast, the DPRK does not threaten to
turn Moscow, Berlin, Bern, Abuja, Johannesburg, New Delhi,
Brasilia, and most other national capitals into lakes of fire.) The
Kims from DPRK founder Kim Il-sung down through grandson Kim
Jong-un have given no indication of being suicidal. They almost
certainly would prefer to stay out of America’s way. But if
they can’t, then they obviously see creating and flaunting a
nuclear deterrent as the next best policy.

Put simply, Trump administration officials are running around
Washington warning that missiles, if not the sky, may end up
falling because the U.S. has chosen to intervene in the
inter-Korean struggle. That involvement is a matter of choice.
America actually does not have to police every region of the globe
forever. Certainly Washington should take into account the cost in
deciding on future policy.

And that price in Korea could soon include facing a nuclear
power with a leadership that is to some degree impulsive, paranoid,
and reckless. (Not so different, ironically, than America’s
present administration.) While the DPRK would not likely attack the
U.S. without provocation, what would count as the latter?

Any attempt to destroy the North’s WMDs or decapitate the
regime would probably be reckless. Today military action would be a
wild gamble because the North possesses the conventional capability
to rain death and destruction down upon Seoul, South Korea’s
capital. If the Kim regime could do the same on American cities,
preventative war would disappear as an option for U.S.
administrations.

Pyongyang might also view a much-enhanced attempt to strangle
the North economically as an existential threat. And what of
conventional military involvement by the U.S. in a conflict on the
Korean peninsula, however it began? Certainly there could be no
drive to the Yalu, even after defeating another North Korean
invasion.

Indeed, the U.S. would face many of the same limits that it did
when confronting the Soviet Union. Any military action
would become more dangerous, and thus less likely, if American
cities could be annihilated.

Which suggests that the U.S. should consider a dual-track
response to the North’s weapons development. First, continue
discouraging North Korean acquisition of nukes and missiles.

But even greater reliance on Beijing remains a long-shot.
Pyongyang might choose to go it alone, irrespective of the cost,
and survive. Moreover, the Trump administration has yet to assuage
China’s understandable concerns over destabilizing the North
as well as contributing to Beijing’s own containment by
ultimately creating a united Korea allied with America.

Second, Washington should disengage militarily from the
peninsula. South Korea has dramatically outpaced the North on every
measure of national power other than military, and the latter
remains a matter of choice. The Republic of Korea sees no reason to
spend more if Washington is willing to do so. That’s a good
deal for Seoul, but not America. At the very least the U.S. should
devolve responsibility for the ROK’s conventional defense
onto the ROK. Doing so would eliminate an important scenario for
confrontation with a nuclear-armed North and opportunity for
tensions with different governments in the South.

Moreover, Washington should consider the heretofore unthinkable:
a South Korean nuclear deterrent to the North. Certainly
that’s not a desirable outcome, but dealing with the DPRK
yields only second-best solutions. For America, nothing at stake in
the Korean peninsula is worth nuclear war. The U.S. should not
consider sacrificing Los Angeles or Seattle for Seoul—or
Tokyo, for that matter. If such a trade becomes a real (though
still, hopefully, unlikely) possibility, Washington policymakers
have an obligation to the American people to rethink current
policy.

A nuclear North Korea is bad news. One capable of striking
America is even more dangerous. But by intervening in the Korean
peninsula Washington helped create and sustain the DPRK nuclear
threat. Instead of threatening war, the Trump administration should
take a military step back. The price of America’s reflexive
defense of populous and prosperous allies is getting much
higher.

Doug Bandow is
a senior fellow at the Cato Institute and former special assistant
to President Ronald Reagan.