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Being an U.S. “ally” means silently watching your own destruction

Being an “ally” with the USA does not guarantee immunity against economic interference, subversion and sabotage, quite the opposite.

The Chinese foreign minister, Wang Yi, once said that the formula used by the European Union to manage its relations with China is “impractical”, “it’s like driving a car to an intersection and looking at the traffic light and seeing the yellow, green and red lights on at the same time”. I would say more… In addition to the confusion with the traffic light indications, the driver — for the Chinese only — still has to watch out for nails, oil and potholes in the road, which can lead to a crash or damage to the vehicle.

And who would cause such dangers along the way? Given the desperation of the actors involved and the unidirectional nature of the actions… Consequently, the exasperated and catastrophic tone that we find in the Western press, as opposed to a more triumphalist tone that was still in force six months ago (maybe even less than that), tells us everything we need to know. It’s incredible how Western emotions run riot, going from one extreme to the other in very short periods of time. From certain victory in Ukraine against Russia, we move on to widespread panic, in which Sullivan, Biden, Borrell or Macron, who as recently as September were already bathing in the good waters of Crimea, have now moved on to the certainty that Russian troops will not stop at the Dnepr and perhaps not even at the Danube, Rhine or Elbe.

During 2023 we all watched the unstoppable succession of predictions of the fall of the Chinese economy — remember, the Russian one was already “in taters — only now to be panicked by the flood of high-quality, low-cost products that the lazy West can’t even dream of competing with. It’s happening in cars, as well as semiconductors and agricultural machinery, and we’re gradually discovering, from the hysterical tone of Janet Yellen and Blinken, that if anything is falling, it’s American hegemony, whose containment strategies have so far only resulted in even stronger and more capable opponents. After all, it’s hard work that shapes character. The rentier capitalist elite of the West is too used to the easy money of royalties to be able to compete with those who have never abandoned industry, agriculture and truly productive activities.

The fact is that, in the Washington Post, David Ignatius, a researcher linked to the U.S.’s largest think thank, based on work by the Rand Corporation itself, says that analysts say the U.S. is entering a decline from which few powers have recovered; it is also RAND that provides us with an article entitled “U.S.-China rivalry in a new middle age”, pointing to the need for decision-makers to develop a neo-medieval mentality, namely by having to wage war in the knowledge that the “public” doesn’t want it; Borrell says that the U.S. is no longer hegemonic and that China has already become a superpower, something that Brzezinski had promised would never happen again; or the statistics on the U.S. economy, which say that it grew by only 1.6% in the first quarter of 2024, which shows a slowdown compared to the forecast. A big slowdown, considering the 2.7% predicted by U.S. broadcasting networks such as the IMF.

Curiously, it is from RAND itself that the best advice comes. In its study “The Fates of Nations”, two reflections are suggested which, considering their content and topicality, have no other destination than the political power based in Washington: 1. When nations stand between victory in war or national collapse (between the sword and the wall, I say), the punitive and coercive imposition of conditions is not an adequate path to success in rivalries; 2. Excessive ambition and oversized strategic scope contribute to many types of failure.

These reflections are the current portrait of the U.S.: wanting to extend itself everywhere, it is beginning to open cracks in the center, because the larger the surface, the thinner the cover; taking positions of strength in all situations — threatening all contenders with sanctions — causes those involved and those who might be the target of these actions to flee and become averse. If we add to this the fact that, according to various sources, Trump’s team of advisors has proposed that he impose penalties on countries that want to reduce their dependence on the dollar, we can already see that 2024 is going to be a terrible year for the world’s largest reserve currency. For now, gold has never been higher and almost 1/3 of the oil traded in 2023 was in currencies other than the dollar. If I were president of any country, I would do everything I could to reduce dependency until Trump takes office, considering that the prospects for Biden re-election are not the most enthusiastic.

Confronted with this reality, what is Washington doing? Failing to situate itself in this multipolar world in the making and failing to adopt a cooperative and respectful approach towards other states, preferring to focus on “a competition of great superpowers”, contrary to what, e.g., the Carnegie Endowment for International Peace proposes, in its report “The United States Policy Challenge”, the administration headed by Biden operates as if it still had all the power on its side and, lacking the strength it normally relied on, adopts the stance of sabotage, disruption and causing instability in the “business environment” of its own “allies”, when they are in the way between China and U.S.’s “national security” needs.

In Mexico, threats have been made — no one has confirmed them — against the López Obrador government if it persists in its intention to allow BYD factories to be set up so that they can make use of the exemption from customs duties applicable to the USMCA free trade agreement. The U.S. itself is unilaterally saying that the rules agreed between the three countries no longer apply to Mexico, without Mexico, supposedly a party to the agreement, having any say in the matter. If this situation isn’t proof of who’s really in charge when a country signs an “agreement” with the U.S…

This process of disruption, which aims to make it impossible for Chinese companies to set up shop, is taken so seriously that even a country like Portugal could be caught in the net and see its economy profoundly affected by U.S. intervention and interference.

Take the case of the oil company GALP, a privatized company with 51% of its capital held by U.S. “institutional investors”. First, we saw the news that the 8th largest oil well in the world, located in East Africa, more specifically off the coast of Namibia, had been awarded “to Portugal”. Specifically, the oil well had been awarded, not “to Portugal”, but to GALP, it would have been “to Portugal”, if the company were still public (only 8% are). The company is run by a Portuguese oligarch family, whose holding company “Amorim Energia”, which holds 35.8% of the capital, is based in the Netherlands.

It should be said that it would be more accurate to say that, 80% of the exploration, of the 8th largest oil well in the world, was awarded, not “to Portugal”, but “to the Netherlands”. And although the Amorim family manages the company, the capital is held by an overwhelming majority of North American, English and Canadian capital (75.2% in all). You can see who’s really in charge.

This same GALP, whose transition program towards sustainable energies and sectors envisaged a gradual move away from fossil fuels, has now announced that it has abandoned the proposal to set up a lithium refinery in southern Portugal. GALP, a profit-driven private company, is abandoning a lithium refining business, largely financed by European and Portuguese funds and with a guaranteed market?

Let’s not forget that the ultimate aim would be, with taxpayers’ money, to guarantee GALP entry into a strategic sector from the point of view of “sustainable” industries, and with guaranteed profitability, since the lithium would be explored also in Portugal, refined in Portugal and installed in batteries in Portugal. An extremely lucrative business guaranteed and with the development of important know-how. This explains why GALP accessed the 8th largest well in the world and why it has now come to say that, after all, the decarbonization objectives will have to be postponed. What do these people care about “climate change”?

For Portugal, this project was fundamental, as it would close the cycle of production and electric vehicles within its borders. From lithium mining to the production of electric cars, everything would be done in Portugal. However, there was a catch to this ambitious project. This project, which is one of the most important to be financed under the European Union’s Recovery and Resilience Plan in the country, was based on the production of batteries through the installation of a Chinese enterprise factory named CALB, which has already been approved by the previous government, which curiously suffered a judicial coup of “lawfare”, after which another government was elected, supposedly with different ideas on this matter. Let’s see how the differ.

Once again, we will have to listen to what the U.S. ambassador to Portugal said about the businesses in which Washington would not welcome China’s entry. Wouldn’t welcome is an understatement, as we know. Lithium, personal data, ports and 5G.

This is how a small country like Portugal was caught in the middle of a tectonic dispute between superpowers, in which the still hegemonic power developed a process of destroying the “business environment” applicable to its competitor. As we know, history doesn’t say much about those who are always on the defense, and so they have become increasingly closed. But that’s another story.

This example contains all the complexity, fallacy and aggressiveness of the “decoupling” strategy, which, when translated by Ursula von der Leyen into the “language of the EU”, became “derisking”. It also shows how, in the EU, it is the U.S. that calls the shots and how being anchored to the European Union, and everything it stands for, is in fact a serious brake on development. Portugal, like Mexico, like Germany, Spain, France and the whole of Europe, is seeing investment projects that could keep Europe industrialized closed down, boycotted and destroyed. Just because they are projected with Chinese companies.

Perhaps even then the Chinese company CALB won’t give up on its factory in Portugal. However, this foreseeable foreign interference will not fail to diminish the company’s expectations of future profitability and, above all, create a brake on its competitiveness for better prices. Symptomatically, this continued sabotage of the European economy and that of the “allied countries” is based above all on technologies that the U.S. wants to dominate. In this context, we should also have conscience that Volkswagen has signed an agreement with China’s Xpeng, and that a factory for the German brand is also located in Portugal. We can’t help but get a whiff of the traditional U.S. persecution of the German economy, which suffered a severe setback with the destruction and closure of Nord Stream and what was left of it. It all ties together again.

What this case proves is that today, in the West, and especially in territories that are in some way controlled by the tentacles of U.S. monopoly power (the Portuguese case proves the importance of the public nature of companies like GALP), they are limited to businesses that they are unable or unwilling to sabotage or destroy.

If the Think Thank and research institutes themselves suggest to the U.S. political elite that the best approach would be cooperation, respect for the sovereignty of others and, above all, not trying to get everywhere, it is not for lack of informed knowledge that these elites behave so savagely. Their objective is very clear, and consists of creating such an insecure, unpredictable and erratic environment for Chinese companies that they should abandon their desire to set up and trade with Europe and Latin America, without it being possible to say that it was the U.S. itself that sabotaged the economic development of countries that claim to be “allies”.

The means used range from unilaterally changing the rules, their own rules, promoting agendas such as “decoupling” or “derisking”, or, if necessary, and as Nord Stream proves, directly destroying supporting infrastructures, subverting democracies by organizing judicial coups and color revolutions, threatening sanctions and other penalties. In the last resort, war is even promoted, as was done in Ukraine and is now being attempted in Taiwan.

And this is how everything that has been said before, about open markets that close when at a disadvantage or open when there is a guarantee that only the hegemonic power wins; climate agendas that are a priority but are soon abandoned when the defined accumulation cycles are at stake; respect for the sovereignties of other countries that are protected when it comes to getting closer to rivals and are unprotected when it comes to defending U.S. dominance.

The terms under which the “national security” of the USA is defined, its protection grows at the pace of the destruction of the sovereignty, economy and freedom of its “allies”. Being an “ally” with the USA does not guarantee immunity against economic interference, subversion and sabotage, quite the opposite. It guarantees that this interference is carried out more easily, as the traditional defenses that result from national sovereignty do not exist. To be a friend of the USA today is to watch its own destruction and remain silent.

With friends like these… Who needs enemies?

BY: Hugo Dionisio

 

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