Tom Cotton’s big plan to “beat China,” explained

Cotton is urging economic warfare to send the Chinese Communist Party into the “ash heap of history.”

Sen. Tom Cotton on Wednesday released perhaps the most detailed strategy by a prominent Republican lawmaker for long-term US-China competition — and it effectively calls for ending the economic relationship between the world’s two richest countries as we know it.

The report — titled “Beat China: Targeted Decoupling and the Economic Long War” — outlines the Arkansas senator’s vision for how the US can outlast Beijing in a Cold War-like struggle. Cotton calls for Washington to sever many of its ties with Chinese industry and society while at the same time investing at home in the scientific, technological, and manufacturing fields China currently dominates. Only then — with the US less dependent on China’s giant economy — can America be more secure in the years to come.

But Cotton’s plan isn’t just aimed at ensuring America’s economic well-being. It seeks to prove that China’s Communist, authoritarian model doesn’t stack up to America’s capitalist, democratic one. Cotton is therefore proposing not only a blueprint for economic warfare, but also a roadmap for defeating China’s regime and triggering its collapse.

“We need to beat this evil empire and consign the Chinese Communists … to the ash heap of history,” the senator said in a speech detailing his 84-page report at a virtual Reagan Institute event on Thursday. He called the US-China fight a “protracted twilight struggle that will determine the fate of the world.”

It’s worth taking Cotton’s ideas seriously. He sits on the Armed Services, Intelligence, and Joint Economic committees in the Senate, which means he’s privy to some of the most sensitive information about how the US and China compete on multiple fronts. And he’s also a long-rumored 2024 presidential contender, so there’s a chance his vision could turn into policy if he gets into the Oval Office.

But even Cotton acknowledges his suggestions could hurt the US economy in the near term. Ending US-China economic cooperation in key sectors like quantum computing and artificial intelligence means Americans will take a hit as domestic companies and workers lose vital partners. Still, Cotton believes the long-term benefits are worth the early pains.

“The costs of targeted decoupling with China pale in comparison to the costs of passivity,” Cotton said. “We cannot watch as America becomes less prosperous and cedes its position to a totalitarian power dedicated to bending the world to its will.”

Experts I spoke to about Cotton’s plan said there’s clearly a need to reform, and in some places completely reshape, the way the two countries do business with each other. The US spent years letting China take advantage of many of its industries, and it’s high time for Washington to push back, they said. But they’re also worried the senator’s zero-sum approach toward America’s third-largest trading partner may go too far.

“A lot of these things sound a lot better in theory than in practice,” said Linda Benabdallah, an assistant professor at Wake Forest University. “These might be Band-Aid solutions, but they’re not long-term solutions.”

Cotton’s report also highlights just how much the Republican Party’s thinking has shifted when it comes to competing economically with China. “It’s an extremely interventionist plan,” not a free-market one, said Kristin Vekasi, an assistant professor at the University of Maine.

Here’s a look at what, exactly, Cotton is proposing in his report and what it could mean for the future of the US-China relationship, and the world.

How to “decouple” from China’s economy, explained by Tom Cotton

There are many elements to Cotton’s plan, but it breaks down into two main parts: How to “decouple” — that is, separate — the US and Chinese economies, and how to ensure that decoupling doesn’t ruin America’s prosperity.

Let’s start with the “how to decouple” part. For starters, Cotton recommends some ways to punish China for its aggressiveness on trade.

One is to sanction leaders in China’s government and industrial sector who benefit from the theft American intellectual property. Doing that, Cotton says, will make them think twice about forcing US companies to give up valuable trade secrets before entering the Chinese market or cyber attacking American firms to take their plans.

“The message should finally be clear: Steal from Americans once, and you’ll be looking over your shoulder forever,” Cotton told the Reagan Institute.

Mark Ralston/AFP via Getty Images

Another is to tighten export controls so China can’t import US (and, hopefully, allied) technology helpful to its military or commercial companies. Cotton also proposes consolidating all such decisions in the State Department, instead of throughout myriad government agencies, so the US can better ensure materials and information helpful to China in industries like 5G, semiconductors, artificial intelligence, and quantum computing don’t go overseas.

Cotton adds that the US should complement such restrictions with federal investment in research and development in those fields. He also suggests the government give US companies more capital to invest in manufacturing capabilities to make products in those sectors.

Essentially, Cotton wants fewer resources in key scientific, technological, and other areas to go to China, and wants to dedicate more resources to developing those sectors at home. Over time, he says, the US would surpass China as the leader in these areas.

That effort extends into higher education. In his report, the senator proposes “Bar[ring] Chinese nationals in graduate and post-graduate programs in the United States from studying or conducting research in sensitive science, technology, engineering, and mathematics fields.”

The reason, he elaborated in his Reagan Institute address, is the US shouldn’t risk having Chinese students head back home with knowledge to help China’s military build cutting-edge technologies to use against America. “It would have been a total scandal to have trained a generation of Soviet nuclear scientists during the Cold War,” the senator said.

Vekasi said this proposal is a “terrible” one. Yes, the US runs the risk of training a future top Chinese official, but it also risks cultivating talent that could stay in America and bolster the local economy. What’s more, many Chinese students learn to like the US after studying among Americans and experiencing life in the country. Having universities that attract foreign students, from China and elsewhere, is a key source of America’s “soft power.”

And it’s worth noting that the US and Soviets did have scientific and technological exchanges during the Cold War.

What Vekasi did agree with, though, was another element of Cotton’s plan: ending America’s reliance on China’s extraction and processing of rare-earth elements. These elements are used in high-technology items like smart phones and flat-screen TVs, as well as military weapons systems like warplanes — and that makes them extremely valuable.

The problem is that China is simply dominant in this space. In the making of specialized magnets for electronics, for example, “the Pentagon has had to repeatedly waive a ban on using Chinese-built components in US weapons so that it could install rare-earth magnets in F-35 fighters,” Cotton wrote in his report.

It doesn’t help that when the US extracts rare-earth elements from mines in California and Colorado, more often than not they’re shipped to China to be made into American products, Vekasi told me.

The US simply doesn’t have the labor force to compete with Beijing’s industries, and it won’t unless and until Washington decides to subsidize workers to get trained in that field and companies to hire them, Cotton argues. Until the government does that, the US will remain beholden to China’s firm grip on the rare-earths sector.

The senator offers other ideas, such as having the Pentagon more involved in reviewing Chinese investment in the US and establishing a government committee to consistently review where federal funds for research and development go, but you get the idea. Cotton’s main point is the US can no longer rely on China in critical technological, scientific, and manufacturing industries and instead must learn to fend for itself.

Ed Jones/AFP via Getty Images

But all that would lead to economic pain for many Americans. “This is going to take a long time and cause some dislocation and disruption,” Cotton said at the Reagan Institute. Which is why the second prong of his plan includes mitigating those early, negative effects.

How to keep America’s economy humming while decoupling, explained by Tom Cotton

This part of Cotton’s plan is less developed. It’s clear he’s given more thought on decoupling than on ensuring the US survives such a stark economic transition. The ideas he does offer, though, are intriguing.

Among them is to “open new markets to American goods and negotiate high-standard, bilateral trade agreements that prioritize American jobs and exports.” This makes sense on a conceptual level, as US companies will need new places in which to sell and make their products with China mostly out of the picture.

The senator singles out Japan as a place that could buy more American goods, and points to Malaysia and Vietnam as having labor forces that could produce these goods at competitive prices.

That idea fits into Cotton’s overall view that the US should get other countries to decouple their economies from China, too. That not only would weaken Beijing’s economy, he claims, but also would create a global, anti-China alliance the US could lead.

In that vein, Cotton also writes that America should “reclaim international institutions and standards-setting bodies from Chinese influence where possible, and establish new groups comprised of U.S. partners when existing institutions cannot be reclaimed.”

The senator highlighted how the World Trade Organization has failed to rein in China’s economic malpractices on a large scale. That’s not to say the US shouldn’t try to reform that or other institutions.

But if China won’t play by the rules, or the group won’t hold China’s actions accountable, then he’d rather Washington leave and form new bodies. That way, the US “can ensure that international rules and standards are written to support emerging technologies where America is naturally suited to prevail.”

This stance is similar to Donald Trump’s, who as president also didn’t want to stay in international organizations he deemed friendly to China. President Joe Biden, meanwhile, thinks the US can only challenge Beijing if the US stays in such institutions.

Cotton’s other suggestions are essentially just restatements of proposals he espoused in the “how to decouple” section, namely government funding for research, development, and training in key industries. They underscore the senator’s central thesis that any moves to untangle US-China economic ties must feature corresponding actions to mitigate the resulting disruption.

For Wake Forest’s Benabdallah, that vision reflects the growing bipartisan consensus about America’s future economic ties with China. “This really puts into writing the view coming from DC that US-China relations are a zero-sum game,” she told me. “It’s very logical to say the US needs to do all this, but it’s another story when you see what that really means.”

Maine’s Vekasi echoed that sentiment: A lot of what Cotton said should be considered and thought about more deeply, especially the rare-earth materials part. But until it’s clear that the US can actually find less painful and cumbersome ways to sever economic relations with China, little of what the senator proposes will come true.

“It’s a pipe dream,” she said.