School of War - Ep 244: Oren Cass on a Strategy of Reciprocity

Episode Date: November 4, 2025

Oren Cass, founder and chief economist of American Compass and author of the article A Grand Strategy of Reciprocity for Foreign Affairs, joins the show to discuss how the United States should think about the current strategic moment. ▪️ Times 00:01 Introduction to Free Markets and Trade 00:43 Discussion on China and Global Strategy 02:15 Historical Context of American Grand Strategy 04:40 Assumptions about China 07:40 Strategic Competition and Spheres of Influence 10:00 Economic Decoupling and Its Challenges 13:30 Relationships with Other Countries 16:00 Concept of Reciprocity in Alliances 20:00 US-Mexico-Canada Relations and Global Implications 25:00 The Role of the Trump Administration 30:00 Future of Global Alliances 35:00 Economic and Security Strategies 40:00 Conclusion and Final Thought Follow along on Instagram, X @schoolofwarpod, and YouTube @SchoolofWarPodcast Find a transcript of today’s episode on our School of War Substack

We talk about China a lot here on School of War, and have had guests in the past like Mike Gallagher and Matt Pottinger and recently Michael Sobolick, who argued that we're in a new Cold War with the People's Republic. Well, today we welcome a guest, Oren Kass, of the organization American Compass, who, while remaining relatively hawkish on China, takes a different view of the strategic competition overall and about what America can realistically bring to bear in that competition. Let's get into it. It is a step in the field. Hi, I'm Aaron McLean. Hi, I'm Aaron McLean. Thanks for joining to welcome to the show today. Oren Kass, the founder and chief economist of American Compass.

He's the author of Aeneuve. a big deal book from a few years ago called The Once and Future Worker, a Vision for the Renewal of Work in America. He's the author very recently of a piece in Foreign Affairs called A Grand Strategy of Reciprocity, How to Build an Economic and Security Order that works for America. Oren, welcome to the show. Thank you so much for having me. It's great to see you.

So, Orin, as the title of your book suggests, you are known as a thinker about economic matters, American domestic policy, the sort of the future of the American right when it comes to economic policy and the labor markets in particular, why this project of thinking through American grand strategy as reflected in the foreign affairs piece? It's a very fair question. I must confess I've always disliked foreign policy generally. It strikes me as sort of vague and indeterminate.

And I always say if people are still arguing 50 years later, whether the Vietnam War was a good idea, I'm not sure what we're really supposed to be able to. to get to ground truth on about, about something going forward. But, you know, what I've found certainly over the last year of the Trump administration and really over the last few is that the domestic economic challenges we have in this country are pretty much inseparable from questions about the U.S. role in the world. And, you know, some of those are quite explicit connections, right? What is our trade policy going to be? What is our relationship to China going to be. But, you know, ultimately, I think there are broader questions about sort of what

are our alliance is going to be, what are our markets going to look like, who is in versus out as places that American workers should be competing against at all, who is in versus out as places we should be sourcing national resources from, where should supply chains run? And once you're talking about that, then the configuration of your national security commitments, your alliances and with respect to defense ends up being part of the conversation as well. And so I found that there were more and more pieces of that that had to fit in. I was getting more and more questions about those topics as I went around talking about labor and trade and industrial policy. And so it felt like time to try to fit it together and connect it to what you see happening

in Washington right now. So you opened the piece with a kind of summary account of American Grand Strategy, 1914. 45 to the present. Could you give that summary account? What have we done over the course of the last, what, 80 years now? And what's worked and what hasn't? Well, I think there were two very distinct eras. I think there was the Cold War and the post-Cold War, right? I'm not breaking any particular ground with that. But I think it's important to recognize the way that our strategy shifted from one to the other. I think for some folks, there's an idea that this has all sort of just been a natural continuation of, you know, constructing a liberal world order. And the reality is that the

Cold War era, when we had this policy that I would call containment, was quite distinct from the post-Cold War era. In the Cold War era, we recognized that there were essentially friends and adversaries. There were models consistent with and complementary to ours and one's in conflict with ours. And we tried to build a very strong block among those on our team. And very much to exclude those who clearly were not on our team, right? I always point out, you know, not even Milton Friedman or Friedrich Hayek was out there saying we should have free trade with the Soviet Union. That was just not a coherent concept. I think what shifted so dramatically, and, you know, this is one of my favorite parts of the essay was kind of going back and looking at the source documents on this stuff, is to see what happened right at the end of the Cold War, because there was very briefly a discussion, okay, World War II.

over, the Cold War is over, can the United States kind of go back to being the modest republic of the pre-20th century? But that was very quickly overridden by a group that I would say sort of had a quite hubristic worldview that, you know, this is where the phrase, the end of history comes in. There was this idea that everybody was marching toward liberal democracy, toward open markets, and the U.S. as the unquestioned most powerful country could essentially reign over that indefinitely. And so if you look, you know, you see whether it's the George H.W. Bush administration, then the Clinton administration, there's a very explicit choice made to try to promote a single universal model and actually to accept significant costs for the United States. So, you know,

people didn't talk about this on the stump, but economists understood there were real costs to doing free trade in a world where not everybody else is really a free trader. We pretty much explicitly told other countries don't spend so much on defense. We'd rather do the spending ourselves. And we were supposed to accrue the benefits of that in our power. It was sort of a what's good for GM is good for the United States. It's like, as the most powerful country, if the whole world is happy, then we will surely be happy as well. And you could argue this actually worked a little bit in the 1990s, but I think the assumptions it was built on just all ultimately proved to be incorrect.

And what we've experienced in this country over the last 25 years is in a sense coming to terms with the fact that we made the wrong assumptions. We took the wrong approach and we bore increasing costs and declining benefits. Talk in particular about the assumptions that were made about China, both in the trade context but also otherwise, because that's very much the center of your account and at this point in 2025, kind of the center of all of our arguments. accounts of what's happened for the last 25 or so years? Yeah, you know, I think there were two really important things about China. One is it's fascinating to go back and look at sort of how insignificant China was on the world stage in the 1990s. You know, their GDP per capita, I think it was sort of neck and neck with like the Congo's.

And so, you know, the idea that within a generation, China was kind of be challenging us for global economic leadership, industrial leadership, technological leadership. I don't think was something anybody took seriously. But perhaps more importantly, everybody assumed that China was moving toward liberalization as well. That, you know, there were signs within China that it was moving in that direction. But more importantly, that it just wouldn't have a choice. That, you know, there was no Soviet Union anymore. There was no Warsaw Pact.

There was no other side to be on. And that as everybody was brought into this global trading system, everybody would see the value. of conducting oneself that way. And I think a lot of, you know, the rhetoric around, it's funny because this is all happening right in the middle of the internet bubble as well. And the rhetoric around the kind of power of the free and open internet to ensure that at the end of the day, even if China's leaders wanted to remain autocratic, that would simply be impossible led people to assume that in embracing China and bringing it into the world

trade organization, in frankly tolerating a lot of its absurdly abusive trade practice, these were all a small price to pay for ultimately converting it into a liberal market democracy with a massive market that U.S. companies would have access to, that U.S. workers could serve, and then also taking it off the playing field as a geopolitical adversary. So that, I think, was the case that was made, what everybody assumed would happen. And, you know, the sort of climax of that is welcoming China, WTO in 2002. 2001. You go a few years after that, there's a fascinating interview with Craig Barrett, who is the CEO of Intel. You know, even in 2004, he's declaring just absolute victory that, you know, even as we're seeing massive offshoring to China, China is adhering to none of its commitments, the perception was still, this is going to be great. And I think it, you know, it really wasn't until, I mean, I worked for Mitt Romney in 2012. I remember him trying to take on some of these Chinese trade abuses. And even then, the reaction being, what are you talking about? That's ridiculous. Obviously, free trade with China is great.

It's not really until you get to the China shock research from David Otter to MIT, the deaths of despair research from Anne Kace and Angus Deaton, which is all happening kind of in between the 2012 Romney world and the 2016 Trump world, that people start to admit, you know, in economic terms, this has not worked out. And more broadly, the story that we're telling based on stock market or GDP is just not corresponding to what's actually happening in the country. Yeah, your point about sort of general enthusiasm and sort of techno enthusiasm hits home. I remember very distinctly an experience I had. I was in graduate school at the time, and this is actually just slightly after 9-11,

but I remember being invited to a recruiting event by Google, which was very misguided on their part because to this day, I don't know anything about computers or anything that would be helpful to them. Nevertheless, I remember this event. I remember this was before Google Earth was a thing. thing. It had not yet been unveiled, but there at the event they had up on big screens what in effect was Google Earth. And I was so blown away by it. I was so amazed. And I remember distinctly thinking to myself, well, how can, you know, the Kim family in North Korea continue

its rule when you have technology like this that basically allows anyone with a computer to sort of zoom in and see anything in not exactly real time, but more or less real time, anywhere in the Earth. Sort of like I remember being caught up in this general sense that there was a kind of of positive leveling and interconnection occurring everywhere. And this is even after 9-11. So it's sort of about a reflection on my naivete as like somebody in their in the young 20s. But this was, this was kind of everywhere. I take part of your project to be sort of thinking through, correct this formulation if you don't, if you don't accept it, but sort of thinking through Trumpism and thinking through what the president is actually doing and then trying to, trying to

shape it a bit. And we've had a lot of China talk in the last few weeks. In fact, the president just sat down with Xi last week. So we're recording this on Monday, November the 3rd. And it's not, it's not totally clear what the outcome of that meeting, relatively short meeting actually is going to be in the long run for American policy. So maybe we're starting with China as the touch point. Take us into what you actually propose in terms of a strategy of reciprocity and how it concerns China, and we'll get to what the Trump administration is actually doing with China in the course of that. Yeah, I think my view is that, you know, we are returning to a world of spheres, that one thing that was so unique about this post-Cold War era is that we had this idea that everybody was going

to go the same direction. There was only going to be one system. Everyone was going to gladly be a part of it. And it's important to realize what an anomaly that was. That has never been the case. in human history. You know, some folks, it's very interesting, there's a fantastic Charles Krauthammer column from back in 1990, where he writes about what he calls the unipolar moment.

And he much more wisely than most commentators of the period says, yes, this is how it feels at this moment, but this is obviously not going to last. And it has not lasted. It is simply no longer the case that we have a world of liberal market democracies as the major powers. China is obviously of a scale comparable to the U.S.

I think it's appropriate to consider it a peer competitor. And its system is simply incompatible with ours. You know, some of that is at the level of values and ambitions and so forth. Some of it is obviously in their political arrangements. And then it's the case in economic terms as well. I think it's really important to recognize that, you know, we think of free markets and free trade as somehow synonymous or, you know, free trade is the logical extension of free markets. But free trade with a communist authoritarian country with a state-controlled economy does not advance the objectives

of free markets at all. In fact, it corrupts and distorts any free market that integrates with it. And so if we actually want to preserve our market economy, frankly, if we want to preserve and protect our democratic political system, I think it's very important to actually separate that from quite sharply models that look nothing like it. And so I think what you're inevitably headed toward and what you should want to be headed toward is a U.S. centered block of free trading, open markets that are market democracies, that are committed to these principles. And again, because you can't really separate the economic and trade from the defense and security side that do have a common vision of the kind of world that we want to be maintaining and the values

we want to be promoting. And then there are going to be countries that have a very different view, and they're likely to be aligned with China. And I think it's important to say that that's not the end of the world. It's the end of the liberal world order. But it is in fact, for instance, much more like the model that we did see during the Cold War. You know, this idea that countries that trade with each other don't go to war is, in fact, frankly, precisely backward. I mean, the World Wars broke out against countries that were neighbors and tightly integrated in all sorts of ways.

Conversely, the Cold War was actually much more stable. When you're willing to acknowledge the existence of other countries that are going to behave differently and are entitled to their spheres, I think you're actually. a lot more likely to land in a position where both sides can live with the arrangement and both sides recognize there's nothing to be gained by trying to disrupt it. So there's a lot more in your scheme that I want to get to, you know, how people in our block would relate to one another in terms of economic and trade policy who would be responsible for what in terms of security arrangements and we'll get to all that.

But the way you just framed everything makes me wonder, in my mind, you are kind of coming from a different place, especially the way you use the terms spheres of influence, you're coming from a different place to other folks who are also China Hawks who I've had in this show in the past people like Mike Gallagher, Matt Pottinger, who wouldn't use that phrase, in fact, the phrase they've kind of become associated with is a new Cold War. What, if any, is the difference between what you're proposing and the sort of Gallinger, Pottinger, New Cold War, way of understanding things? Well, I think the thing about the new Cold War phrasing, I don't object to it.

I think there's obviously a lot of overlap in what we're talking about here. The reason it's not my preferred way of talking about it is I think it sort of puts people back into the frame of, well, we're simply going back to that prior model. We're going back to the 1945 to 1989. structure. And there are all sorts of ways in which that's that's not necessarily going to be the same thing. You know, I think part of the reason we called that a Cold War is because it was in a sense a hot war always on the verge of happening. I mean, there was a sense in which people understood the Soviet ambition to be extraordinarily expansionist. There was sort of a real concern

that, you know, they, the, I mean, obviously the tanks did roll partway across Europe and they would roll as far across Europe as they could. You know, you had obviously the massive nuclear weapons build up and several crises that got very close to a hot war. And it's not clear to me that that the U.S.-China relationship needs to be that. There are certainly flashpoints, and Taiwan being the obvious one, we could talk about further. But I don't think China presents the same posture that the Soviet Union did, even just in ideological terms, of sort of seeking to establish a global communist empire. And, you know, I don't think from the U.S. perspective that we necessarily have this same sort of, frankly, set of extraordinarily weak allies around the world that we

are going to have to buttress and stand in for. I mean, if you think about the 1950s, 1960s, it was the U.S. or nobody, in a sense. Today, it seems to me that if you're thinking about China's ambitions in the Pacific, you know, Japan and Korea and Australia, they are a perfectly reasonable buttress against that in their own right. You know, if you're thinking about how Russia fits into all of this is obviously a more complicated question. But if you need to deter Russia and Europe, the EU, if it got, its act together is perfectly capable of doing that in its own right. You don't have the same

sort of two countries in existential global struggle. And so, you know, the reason I prefer the sort of spheres of influence description is I think it better describes what each side actually wants. That is, I think it's perfectly reasonable and appropriate for China, which is indisputably a great power to expect to have a sphere of influence. And inappropriate and implausible for the U.S. to think it's somehow going to deny or prevent that. And conversely, the U.S. should want that for itself as well. Yeah. So we'll come back to the differences because I want to keep teasing them out because I think it's really interesting. But just on this question of the structure of spheres of influence, I want to know how you picture this functioning in 2025.

You cited Japan, Korea, South Korea, et cetera, as buttresses to Chinese power in their own right or certainly capable. should they get their act together? And don't let me put words in your mouth. Feel free to correct me as I go. It strikes me over the years talking to people from various countries about their attitudes towards China, that there's a kind of rough rule of thumb that the closer the country is to China, the more serious they take the threat of the Chinese Communist Party because the less they can ignore it.

So at this point in 2025, there is a sort of, I think, much wider awareness than there was five or ten years ago. Nevertheless, if you're Japan and you have the Chinese in your air defense identification zone daily, multiple times daily over disputed islands in the sea of Japan, or if you are Taiwan, obviously, or if you're the Philippines disputing these various atolls in the South China Sea, like this is a security concern that is just front of mind. You can't get away with it, can't get away from it. Unlike if you're in South America or Europe where you can kind of tell yourself all sorts of stories about the nature of Chinese power and how you might be able to make accommodations with it in the end.

So my question for you about the sphere is, it seems to me our most natural allies who would most want our help and thus most be willing to make whatever kind of accommodations we demand in terms of trade policy and other things you're suggesting in the peace are actually the ones right up on the line in the tensest possible geopolitical position with China. and the countries where actually it would be kind of hardest to strike the bargain if fear of Chinese power is the main organizing principle are the ones that are further away. So it's like a weirdly, if I'm right, it's sort of a weirdly shaped sphere. It doesn't look like the 19th century where, you know, we get North America, they get East Asia.

Help me understand how you think about this. Yeah, it's a great point that I think the kind of definition of the sphere has to be a little bit different because the relevant dimensions of relationships, are a little bit different. I mean, in the 19th century, geography was sort of the only thing that mattered, right? You're kind of just drawing circles on a map. I think in the 21st century, you know, geography is certainly relevant. But at the same time, I always sort of get worried when I hear what I would call the kind of risk board model of grand strategy, right? Where it's like, oh, well, South America is close to North America, therefore, X, Y, Z. I mean, there are reasons why

that absolutely does matter. There are reasons why that. that's not the thing that matters most. And so, you know, I think to your point, countries like Korea, like Japan, I mean, Australia, slightly further geographically, but very cognizant of the geopolitical and economic dimensions of the Chinese threat, I think to your point, sort of establish a very useful and hard boundary, in a sense, because I think the most relevant dimension, certainly for countries that do have the economic capacity to stand up for themselves to some degree is going to be the kinds of economic and political systems that countries want to have.

Because just as I was describing the ways that the U.S. and Chinese systems are fundamentally incompatible, and I think, you know, people are starting to understand that to some extent. To your point, I think a Korea or a Japan understands that to a much greater extent. And so, you know, if you want to maintain your democratic political system, if you want to maintain your market economy, if you want to maintain your civil liberties, et cetera, et cetera, you simply are not going to accede to participation in a Chinese-led and Chinese-dominated block. I think conversely, you could envision a range of developing countries that look at the, quote, offer from China and say, Yeah, all things considered that one probably makes sense to us. And so, you know, I think there's certainly a geographic component to it. I think there, you know, you might have countries in Southeast Asia.

You had very interesting deals announced with, with the U.S. last week, where you had countries in Southeast Asia, essentially making what look like pretty firm commitments to trying to get out of the Chinese sphere. Certainly when it comes, you know, to the economic and supply chain side of the, things. Whether that's sustainable or not, I'm not quite sure. But to the extent that countries want that, I think it underscores the quite strong position that the U.S. is in. And that, you know, at the end of the day, the sphere that China can define for itself is somewhat going to be constrained by that set of countries that are actually interested in the deal it's offering. Because the, you know, just the one other thing I'll say quickly about it, it's very funny to me, like everyone is trying to choose whatever lesson they prefer to learn from the Ukraine war, right?

And so, you know, I'm always cautious about like, well, let me tell you about why my lesson from the Ukraine war is exactly the right one. But the lesson that I take from the Ukraine war is that, you know, the, the way that military conflict, among other things, operates today is that it's awfully hard to invade and impose solely through hard power, your will. on a country that sufficiently sees in its interest not to accept that. I mean, if Russia can't, after this amount of effort, really make significant inroads in Ukraine, I think it's difficult to see to what extent, you know, even a very large, more militarily

powerful country is going to be able to force somebody into their sphere. if that country doesn't want to be there? De coupling is a major element in your strategy. A lot of people in Washington have been talking about decoupling from China for a long time. It hasn't really happened. President Trump certainly, you know, through his tariffs, amongst other policies, seems to have taken the boldest strides in a direction that sort of feels like decoupling, but isn't quite the same thing judging by how many Chinese products I still see all around me

in the American economy. And the way you describe your preferred version of it is very dramatic. I'll let you characterize it for yourself, but, you know, I read the piece of sort of a call for near total to couple of, not only for us, but amongst those who choose to be in our block or sphere as well. This is, I guess, a place where I personally find myself open to what you're proposing so long as it would, it's feasible, but I do have a question for you about the feasibility. I mean, as you know, I don't have to explain to you. The reason why we are so economically intertangled with China is a function of not only American policy but Chinese policy. And that Chinese policy was designed not only with an eye towards economic benefit, though, of course, they do benefit economically from their relationship, but also strategic benefit.

That is to say the Chinese know that they've created a kind of fifth column in the United States in our system of free enterprise amongst any number of, you know, otherwise perfectly well-meaning. some of them. The smaller you go, the more well-meaning, I think you are. You know, businessmen, importers, whatever, who just for whatever reason, their business model depends on China. At the higher and larger corporate level, I'm more skeptical of the well-meaningness. But nevertheless, you have a whole intertangled system of various industries with China, which makes it then very hard to execute policies that take a hard line with China. Obviously, the same thing is true, to an even greater extent with economies that are closer to China. Like, I can't cite the number off the top of my head, but I'm pretty sure the Taiwanese, say, or the South Korean economies are

deeply intertangled with China, even as they face, you know, in Taiwan's case, quite literally existential threats from the PRC. How do you propose, you know, realistically moving in the direction of the kind of decoupling you would like to see? And how would you propose to pay for the costs of it? I appreciate your point about the well-meaning list of folks caught up in this. I think if you sort of draw the line and you get all the way up to, you know, say companies worth more than $5 trillion, the well-meaningness becomes particularly hard to take seriously. But you're absolutely right that there are obviously very high dependencies throughout the economy on China. It is literally it is what American policymakers told businesses to go and do for 20 years. I do think on the flip side,

though, you know, I would characterize what's going on as actually a, a significant amount of decoupling underway. And, you know, the distinction I would make is that, you know, at the end of the day, kind of stuff being put on boats and traded back and forth is kind of the least important element of the relationship. You know, if you're talking about sort of outright dependence on critical things, whether it's chips or rare earths and so forth, that's obviously a different story. But if you're talking about, you know, stuff that can be sourced from anywhere, but it comes

cheaply from China and people have it in their supply chains. I think that's, you know, that would certainly be the last thing to go. And that's frankly the thing that doesn't need to go entirely. I would expect there will be some trade between the U.S. and China. And if it's fairly balanced, and if it's in goods and if they're not critical, you know, dependencies, then that's probably okay. I think the most important elements of decoupling, one would be in sort of critical supply chain. And that's a place where I think you see the decoupling absolutely underway, whether it's our affirmative industrial policy on things like chips, on things like rare earths. You know, the wake up call has certainly gone out. And I think it's saying the U.S. political system is actually taking very seriously at this point.

And then the other one is just in terms of investment, both direct investment, U.S. companies going and trying to set up shop in China, thinking their futures in China. That's essentially over. You know, I would say the last kind of major effort in that respect was probably when Elon Musk took Tesla to Shanghai in 2017 and got just absolutely pantsed. And, you know, interestingly, Elon is now a much more of a China hawk as a result. But you just don't see, you know, U.S. companies, again, with the exception of Nvidia, actually thinking this is where their future is, this is where they should be building, you know, where can they find a JV to transfer technology? too. That's pretty much over. To the contrary, you see companies, you know, trying to move activity out, trying to move supply chains out, certainly not building corporate strategy around access to Chinese consumers. And conversely, I think you see the U.S. starting to get a lot more serious about

preventing Chinese investment directly into the U.S. economy, right? I think the days of Chinese companies showing up and buying up this and that strategically valuable companies. or technology are over as well. So, you know, to the extent that those things all proceed, to the extent that, you know, I think the really important thing about the so-called, you know, truce coming out of last meeting, you know, last week's meeting was Xi, is it keeps the tariffs in place. I mean, 40, 50 percent tariffs on China, go back a couple of years and imagine anybody saying, we're just going to have, you know, cross the floor with 40, 50 percent tariffs on China. You're right. People were talking about decoupling, but that was sort of

is seen as the extreme outer edge of what you might get to, we're already there. We've been there for six months. Companies are adapting. If you look at, you know, how much is coming in from China, it continues to decline sharply. And so I think we're actually on the trajectory. And I think if we continue to appear to and pursue more policies in this direction, over the next five years, we will get to a place where, yeah, there's some trade going on, but those critical dependencies are gone. U.S. companies are not coutowing to what the CCP wants them to say, and the CCP has very little influence over what's going on in the U.S. economy. Let's talk about what our relationship is going to be like with other countries in the, I'm going to call it the

Cassian block. We can just call it the American block. I think it was probably better. So if we had, let's say, you know, it's Japan, et cetera, in the Western Pacific. I'm curious to know your views on how European countries fit into this scheme, if at all, and again, how we're kind of conceptualizing the shape of the sphere. In the piece, you talk about the need for fair trade and the need for these countries to take on more responsibility for their own defense. In a lot of ways, or it sort of reminds me of the Nixon doctrine and the sort of recalibration of American policy towards its allies right smack in the middle of the Cold War, as does, by the way, your conception of what the long-run goal of the competition is, where early in the

Cold War, of course, the goal for the most part of the early Cold Warriors is the dissolution of communist control over the Soviet Union or over Russia, which switches in the Nixon period to a desire to achieve some kind of deitante. It also seems to me there's sort of an echo there in what you're saying. How do we relate to our allies and partners in this new scheme of things? And why do you think they'll buy it? Well, so this is where the concept of reciprocity comes in, in my mind. Because I think, you know, the fundamental thing that the U.S. has to shift here, China has this kind of special case because there's obviously no prospect of reciprocity.

And, you know, they are therefore, by definition, not going to be on the outside. What I think needs to shift within U.S. alliances, both, you know, in terms of economic relationships, in terms of security commitments, is to go from a model where, you know, as I was describing in this post-Cold War era, the U.S. willingly accepted these very imbalanced relationships, the acceptance of a lot of economic and security costs in return for getting to preside over what was supposed to become a liberal world order. And we need to go back to a model. And when I say go back to, I mean, I'm in a sense, now really I'm talking about a 19th century model. where, you know, the U.S. is going to be probably the single strongest country in whatever alliance it's part of because it is by far the largest and dominant economy and military once you put China to the side. But the nature of the relationship should not be a sort of client state relationship. The nation should be one of the relationship should be one of general, genuine partnership where the countries that are in an alliance together are all behaving

in a reciprocal way, are all treating each other on equal footing. And I think that's sort of a way I find that's very useful to kind of think about is, you know, I love Emmanuel Kant and the categorical imperative. There's sort of a helpful standard of, okay, well, if everyone were behaving the way you are, would this alliance work or would this fall apart? And so, you know, when it comes to economic and trade relationships, we've had these countries that run these massive trade surpluses, try to develop their economies by building up their manufacturing sectors at the U.S. expense. And the U.S. was the country that just absorbed all the excess production. Well, you can't have a trading block where everybody gets to be the export-led trade surplus

country, which means that if you're going to have a reciprocal block, nobody gets to be that. In fact, everybody has to have a commitment to maintaining balance trade over. You might have imbalances in various directions between particular countries, but if you're Germany, you can't be exporting a ton more than you're importing. If you're Japan, you can't be exporting a ton more than you're importing because the U.S. isn't going to be here to be the one that absorbs all the imports. And the same goes when it comes to security, right? If we've had a system where every country kind of, I liken it to, you know, kind of have I done enough of my homework to go outside and play? or have I eaten enough of my dinner to get dessert, right? It's like, okay, well, like, have I spent enough?

Have I done enough that now the U.S. will take care of the rest? And that can't be the question. The question is to be, have I done enough to actually secure myself and to, you know, maintain deterrence and security in my region? And that means that Japan needs to do a lot more. That means that Germany needs to do a lot more. And again, from a reciprocal perspective, This doesn't mean the U.S. is going to sort of close down its own activity and expect everybody

else to protect it, right? This doesn't mean the U.S. is going to be the exporter and dominate everybody else's markets. The U.S. has to play its part too, but it should be on the same level with the same expectations as everybody else. And I think that's a much more stable and secure relationship for everybody involved and certainly one that would have much greater best. benefits for the U.S. So let me ask you this. The strategy that you propose involves reciprocity between us and our partners and allies. It's not a situation where we're retrenching completely from the world, but nor is it one where we are engaged in pure coercion, sort of Athenian, you know, Deleon League, you pay us, the deals are all heavily slanted in our favor. It's a sort of

middle ground, as you put it, but it is a tougher ground. It is a tougher approach, both than the demands you propose we make for people in terms of their defense spending. And of course, as you know, I mean, this is a longstanding element of American foreign policy. And people have been complaining about NATO, for example, NATO members not paying what they need to pay since there was a NATO. And to his credit, I actually think President Trump has made more progress on that front than virtually any other American president. That all said, here's my question. Here we are recalibrating our relationship with partners and allies in this scheme of things. We're saying you need to do more for yourself.

Also, we need to rejigger these trade arrangements because they're not fair. We need to make them actually fair. We need to make it a two-way street. Fair as that may be and good as that may be for Americans if it's achieved, it's a tougher, it's objectively a tougher deal for them, especially if they're used to being treated in your phrase as clients. What do we do if that's the deal on the table from us for any given country? And the deal on the table from China, well, not great.

in the long run involves probably a lot of sweetheart deals and bribery that are good for whatever the current elite in power in country X is, because that's, as you know, how they, how they tend to operate. And what if, you know, the countries and questions aren't sort of African nations of dubious strategic significance one way or the other, but major security partners of the United States and faced with the deal from China, which involves treating the elites pretty well, even if in the long run things aren't great for the rest of the country. And the deal from America, which involves all kinds of uncomfortable concessions that need to be made and then domestic constituencies, they're going to need to be managed in the face of those concessions, what do we

do if it just gets really hard to build the block on these new terms? And do we care? At some point, is the logical consequence of this not working out actually retrenchment? And do you care? Well, I guess I'd say a few things about that. One is, I would separate out probably Mexico and Canada from everybody else. I think both the United States needs to be in sort of economic and security partnership with Mexico and Canada. And if we have to do some strong arming to get there, we can and will. But that that's also the place where it is most obvious for Canada and Mexico that this makes sense for and is inevitable for that. I mean, I think it's actually very interesting to contrast to two.

Mexico probably has responded better than almost anybody else to what the Trump administration has been doing. Mexico's attitude has sort of been like, yeah, we get it. That's fair. That makes sense. Let's figure out a way to make it work. Whereas the Canadians have like run to their fainting couches. But at some point, they'll get up off their fainting couches. And then, you know, it's not clear to me what the alternative for them actually is. And so I think the kind of retrenched baseline that the U.S. should be working from is. is what is colloquially now being called, you know, Fortress North America. If we actually have, you know, a renegotiated USMCA, the open combined market of Mexico, the U.S. and Canada with, you know, Mexico obviously has a very large developing labor pool. Canada obviously has enormous natural resources. That's not an ideal world, but I think that's a perfectly plausible and

palatable world for the U.S. to be starting from. And then the question is, okay, who else wants to kind of get in on this kind of deal? And that's where, you know, I think you're right that countries are going to be put to a choice. I think it's really important for U.S. policymakers to say, we don't have that much control over the choice that they're going to make, right? If a country would look at what the U.S. is offering and what China might offer and say, we're going to go with China, then so be it. That's not what I want them to do, but that is a country that is essentially a lost cause from the perspective of an actually workable, productive, valuable partnership with the United States.

And so, you know, I'm fairly comfortable using a tough but fair offer from the the U.S. as a litmus test or a filter for who is going to be a valuable partner that the U.S. can plausibly be working with. And then the last thing to say is that I think the reality is that the U.S. offer is going to be dramatically superior for the set of developed market democracies that, you know, as you said, are kind of the priority here. Because I think it's really important to think about, okay, well, what would China actually offer? I mean, like, yes, they can outright, you know, bribe in essence, the elites in other countries. But one thing that we're already seeing, which is so interesting, is that in broader economic terms, they can't offer

anything. I mean, they can offer to a developing country, all sorts of infrastructure, investment, and so forth. But China's fundamental economic model that they are showing no willingness to move away from is to absolutely dominate in the industrial economy and through exports. And as the U.S. has started to close some of that off, we're seeing the exports flood into these other markets. I mean, the EU in particular is now dealing with this. The offer from China to the EU is essentially you let us wipe out your auto industry, for starters, and replace it with ours.

The U.S. offer is like, hey, let's actually have open markets and balance trade in autos. Like, these aren't sort of comparable offers at all. And I think you see that even more so than when it comes to the defense context. I was on a panel discussion that the Financial Times was hosting. So it was me and a bunch of Europeans. And, you know, they were doing this kind of thing like, oh, I don't know. Like if the U.S. pushes us away, maybe China will have a better offer. But then the actual set of things that they were upset about the U.S. on was like, well, the U.S. isn't doing enough to lead in Ukraine. And it's like, well, China is actively funding and equipping the other side in Ukraine. Or like, the U.S. isn't doing enough to commit to the

defense of Taiwan. It's like, well, China is literally the country threatening to invade Taiwan. So like, if you're concerned with the U.S. is that like, well, we're not doing enough in these spheres, the idea that your response would be like, well, we're just go for the country, you know, that is literally the cause of these problems, it just doesn't make sense. And so I, you know, I think, as you said, this is a tougher offer. They're right to be bummed out and upset about it.

It's fine if they want to sulk about it. I think it's very important that we treat them well and respectfully and that we do make fair and reciprocal offers and not ones that are extractive and exploitative. But if we do that, then it's hard for me to see, losing any relationships with partners where there actually is any long-term prospect for that partnership. I certainly agree with you that Chinese myopia or what Edward Lookback once sort of controversially described as Chinese strategic autism, that is to say, their inability to read across the table

from themselves, continues to be sort of America's best partner in this competition. The Chinese have a habit of alienating countries that with a slightly softer approach, they might be able to co-opt. What would the rational Chinese response be to what you're proposing? That is to say, we take this harder line with allies and partners, but objectively, in your account, it's still a better deal. It's just still a better deal. So rationally, they're going to go with the American deal over the Chinese deal.

What are the Chinese doing to upend or destabilize or otherwise make trouble in this process as it proceed? I guess it gets to the more fundamental question of what do the Chinese actually want? And I think this is one of the ways, again, where the Cold War analogy probably falls a little bit short because, you know, it's not clear to me that this isn't, in a sense, also the direction that China is headed. You know, one thing that the G has made very clear is that they are focused on essentially entire self-sufficiency. self-reliance from a kind of economic supply chain perspective, which is part of what's accelerating the decoupling from their side. They don't want to be at all dependent on the U.S. either. You know, they obviously wanted to rapidly industrialize and grow their economy and reach

technological leadership. And they are essentially there. And so, you know, I think it's, it is an open question somewhat. Okay. if the U.S. actually gets its act together and isn't going to allow itself to sort of slowly fall under Chinese influence, if we take that as a given, then what does China actually want? I mean, we know China wants Taiwan. Does China actually want to or aspire to dominate Japan in a meaningful way, to dominate the EU? I'm not really sure. So, you know, that's a place where I would say, I don't think anyone frankly knows because I think this is a situation where we are somewhat putting them to a choice as well. One possible outcome would be that they could start to shift their economic strategy.

But as you say, thus far, you know, the strategic autism is partly true, but it also seems to me that they quite rationally within their own frame have decided that they don't want to shift this. This is still the model they're going to pursue. And if it ends up focusing more on the developing world, that might be where they focus. Yeah. The Europeans has ever disagreed amongst themselves on this question. The Japanese, in my conversations over the years, seem increasingly pretty clear amongst themselves that China does want to dominate them. And I guess my biggest concern or where if there's, if there's. If there's distance between us, it's probably on this point, that to me, a world in which this

all goes awry, and we actually lose a lot of relationships. And we do have a kind of, say, fortress America as the unfortunate outcome of the process. And I'm worried about a Chinese-dominated Eurasia with Russia as sort of its junior partner. And so I'm just, you seem to me to be more comfortable with risk, I guess, than I am. Well, it's a good point. I guess I would try to distinguish the sort of normative from the descriptive assessment here because I think certainly as a normative matter, it makes complete sense to say, you know, that the U.S. needs to have this strong presence at both ends of the Eurasian continent. The thing about the post-45 through, you know, early post-Cold War period is that the U.S.

had the capacity to do that. That is, the U.S. could credibly maintain that posture affordably, given its domestic political context, given its economic interests, and just given how much more powerful it was than everybody else in the picture. I think a lot of what's changed is just that the actual world has changed. I don't think it's actually plausible in a world where the EU is not willing, to defend itself and would just assume fall under Chinese power, where Japan is not willing to defend itself, would just assume fall under Chinese power. To think that the U.S. for the next

25, 50 years can single-handedly push back against that, I don't think is realistic. I think in a since that debate is already over. We are not, and I don't think are in a position to actually play a lead role in Ukraine. Frankly, I would say the same thing about Taiwan. And so what concerns me, you know, from a risk perspective, it seems to me actually a lot riskier to maintain what feels to me like something of a paper tiger posture that that does promote the continued self-enfeblement of these allies that actually do need to stand up if the system is going to work. And I would rather put them to the choice now

and find out where we stand and hopefully come to a much better outcome or else prepared to think about a world where we've come to a worse outcome, then proceed on the fiction that it's still the 1990s and the U.S. has the capacity to adopt that kind of posture when I just think it's already over. I don't think we have that posture or could credibly maintain it if push came to shove.

And I think our adversaries know that as well. It's over because the Chinese economy is so big. Well, it's over because the combination of the Chinese economy is so big and its industrial and technological power is increasingly on par with ours. And because our own position has weakened. I mean, our own position, whether you're thinking, socially and politically about whether we could even plausibly raise an army or or maintain a political commitment to fighting, you know, a land war on one of these places. I just don't think

that exists. I mean, we spent, you know, the last 80 years maintaining, what, 40 bases and 80,000 troops in Europe specifically for, you know, the fear of Russian tanks rolling west. And then Russian tanks rolled west. And it was entirely. implausible from day one that we would ever commit a single troop to actually engaging in that conflict. I think, frankly, the same is true of Taiwan. When I see these sort of war games that say, good news, the U.S. can prevail in Taiwan. And it's like, you know, at the cost of four aircraft carriers and, you know, 10,000 plus U.S. service members, I just look at that and I said, I'm sorry, we're not in a world where the U.S. is going to sacrifice.

twice 10,000 service members to defend Taiwan. And there are a host of political and social reasons for that. But I think those days are already over. And I'm hard pressed to think of a single military conflict that the U.S. has committed hard power to since the year 2000, where we actually accomplished our objective or actually, we would say, succeeded. And so I get very worried when when people continue to sort of advance visions of U.S. power in the world that imagine it still is 1991 or that it still is 1949. Well, it's obviously not. It's something much more like the Cold War, as I think you correctly point out in the piece. You know, the situation in the 1990s is one of unipolarity. We have here a situation of bipolarity, at least, if not something substantially more complex than that. I'm curious where you think that Trump administration comes down in all of this.

It's a great question. I think, you know, one really interesting dynamic we're seeing play out is that when it comes to China in particular, you know, Trump in a sense has been extraordinarily consistent for, you know, go all the way back to when he was, you know, writing his books and running for president in the reform party. You know, Trump's view has always been, you know, we're getting screwed by China and we need to get a better deal. And that's obviously what he focused on in his first administration.

That was the phase one agreement. Ever since now coming back into office, you've seen that sort of push in how he has related to China and his pursuit of President G. The rest of the world has moved dramatically, to your point about all the talk of decoupling in recent years. You know, Trump's position was a sort of almost out of the Overton window hawkish position in 2015. mean, today he's a barely still in the Overton window dove, I think, to some extent, in his desire to still get a deal with China and find a constructive basis to move forward. I think certainly relative to a lot of others in his own administration, he is far to the dovish side. And so I think you see a real conflict or tension within the China policy the administration has pursued that

can be, you know, very hawkish one day, very conciliatory the next day. You know, you hear it even in, in Trump's own rhetoric that, you know, he's still very interested in the idea of direct Chinese investment into the United States. And so, you know, I think that has had a sort of Jekyll and Hyde dynamic to it. I think the relation, the moves toward other countries have been a lot clearer in a lot of I think what the administration undertook from day one was to try to reset this set of relationships, make clear that the U.S. was willing to walk away from the table under the old arrangement to start insisting, you know, certainly balanced trade has been a very clear demand from the

beginning, certainly the higher spending, you know, defense spending has been a very clear demand. Pushing China out of other countries' supply chains has been a very consistent part of these bilateral negotiations. And so, you know, I think that piece of it has actually been generally quite constructive. I think the pieces that we still need, if we're going to move forward, one is just a clearer clarity and communication of vision. If these are the U.S. demands, we should be articulating that very clearly and explaining why. Second, I do think we need to have in a sense a little bit more sympathy for the position these other countries find themselves in after however many years of us saying we did want them to behave the way they were behaving

and we need to sort of provide a transition path to a new world. And then thirdly, we do have to get clear on China because the whole thing only works if the U.S. does have a clear committed approach to China. I get very frustrating. It's like, well, we don't want to be too clear. The opacity is important for our negotiating position. It's just not true. There are situations where that could be true, but that's not true here.

We would be much better served if we did have a very clear position, if we could articulate it clearly to China, more importantly to our allies, and then could move forward on that basis. And I think the USMCA negotiation, which is essentially already underway, is going to be a really important linchpin. If we can make that a model agreement for what we want, we will be moving in a very good direction. If it comes out as a conflicted set of hodgepages, then I don't know how far forward we will be from where we were. Orrin Cass, the piece is called a grand strategy of reciprocity. It's in foreign affairs. And I really appreciated the conversation. Thank you so much for coming on the show.

This was so much fun. Thanks for having me. This is a nebulous media production. find us wherever you get your podcasts.