US, Japan alliance is in ‘mountainous situation’: Jonathan DT Ward

All right President Biden meanwhile meeting with the Philippines president and the Japanese prime minister at the White House yesterday to talk about China's increasing aggression in the indopacific region here's what he said about the US's support for the two countries watch United States defense commitments.

To Japan and to the Philippines are Ironclad they're Ironclad as I've said before any attack on Philippine aircraft vessels or armed forces in the South China Sea would invoke our mutual defense treaty the US Japan and the Philippines also announcing joint Patrols in the Indo Pacific later this year Jord now is.

Hudson Institute senior fellow Atlas organization founder and the author of the decisive decade Jonathan DT Ward back with us Jonathan good to see you your reaction to the meeting with the heads of Japan and Philippines at the White House this week hi Maria look I think it's a highly productive meeting I mean it's very important for the US and.

Japan to show solidarity with the Philippines that's right on the front lines of China's aggression I mean in addition to Taiwan itself um probably the most important flash point in the Pacific at the moment is on second Thomas Shaw um in the South China Sea and of course China claims the entirety of the South China Sea it claims this.

Sha uh which is in the Philippines um exclusive economic zone and they've used all kinds of aggressive tactics water cannons lasers you name it just the the usual brunt of of their um aggression in the Pacific and this uh meeting follows on I think a very uh superb meeting um to sort of emphasize the importance of the US Japan Alliance and the readout.

From that one where there's going to be deeper uh defense industrial cooperation co-production and co-development of missiles um integration and alignment of Defense industrial policy co- sustainment of forward deployed US Navy ships and US Air Force uh aircraft in addition to space cooperation and cooperation on AI Quantum semiconductors.

Biotech I mean this is really what a fully formed um optim us Alliance looks like so the US Japan Alliance I think is in great condition it's a model for um the alliance system as a whole and our Pacific Alliance system is starting to become more integrated which is very important so we have Japan principally you know South.

Korea Australia the Philippines I mean this is quite an important Coalition you know as if you add things like Aus which brings Britain into the Pacific um to connect with Australia and sort of provide uh the most advanced submarines um that we will we will need in that region talking about a real uh defense posture that that we can build into and.

Start to um combine our industrial bases our Innovation capabilities and our military uh capacity and that's what it's going to take um to hold back China cuz meanwhile um guess who was in Beijing this week the Russian for administer I mean they're deepening their AIS their comprehensive strategic partnership for a new era so we're.

Really headed into access and allies again um it's getting dark um but there are some bright spots between the US Japan and and our other Pacific allies well the US is also apparently reportedly asking China and other countries to urge Iran not to launch a retaliatory attack on Israel after that deadly air strike on an Iranian.

Diplomatic building in Syria last week the top story in the journal this morning the Wall Street Journal reporting that the uh quote Iranian attack is expected on Israel in the next 48 hours Jonathan we're all waiting to see if Iran uh makes an attack on Israel uh within Israel's border right and asking the Chinese for.

Restraint um right after yellen's visit where she's telling them that you know we don't want them to to export so much to us and there may be uh you know retaliatory uh sanctions on that ultimately I mean it's just I think they've got us in a diplomatic bind here I mean we know that I mean China is bankrolling Russia's invasion of Ukraine.

They've reconstituted um the defense industrial base in Russia and then of course when it comes to Iran they've pledged $400 billion over a 25-year period that will go into a bunch of sectors you know banking telecommunications ports Railways Healthcare it um so China is bankrolling this entire axis as you have Iranian.

Drones going into Russia's war effort as you have um North Korean shells going into Russia's war effort and then China bankrolling the entire axis um you know I think it's time again as as you know my view I mean time for us to defund um and start to put China in in a tougher position really play hard ball with them economically it's disappointing to see.

The treasury secretary sort of doing the opposite saying it's important to keep the uh us China economic relationship going and you know I think we're we're seeing the Diplomatic consequences of the economic engagement years I mean you now have a Chinese superpower that can bankroll aggressive action in Russia uh you know in Europe and in the Middle.

East and of course the Pacific itself so that's where we're going Maria we've basically built this we've funded it and it's it's um you know starting to roll forward yeah I mean you know I don't know why they had uh cameras shoot them having beers in China Janet Yellen and and the Ambassador I mean what you know all of this in the midst of all of this.

Aggression from communist China and Jonathan you've spoken so much about the CEOs of America going wanting the business in China you're out with a new oped on foxnews.com uh it's titled American CEOs Overlook China risk at their own Peril you right American Investment will likely quote continue to play into China's larger strategic.

Programs contributing not only to the erosion of our military advantages but also to the growing risks for your own companies both in the China market and Beyond I'll reiterate what rock Cliffe has told me time and time again China's strategy is simple Rob replicate replace do the CEOs not get that well look I think there's enough Revenue now in the.

China Market I mean the Wall Street Journal just released an excellent um article a couple weeks ago showing about 75 us companies that earn more than $2 billion uh in the China Market which on one hand isn't that many companies but for for some of these sectors there's a lot going going on there and I think the problem now is you know Equity markets.

Have caught on to the problems with Chinese corporations I think the next thing is to start to understand the problems of us and multinational corporations that are too tied uh to the China market and uh you know are unable essentially to find their way out I mean I think you take things like apple or Qualcomm I mean you look at the 10ks you.

Look at their own risk assessments I mean qualcomm's talking about customer concentration selling n or excuse me 60% of its customers are in China I mean all these things are tied in to a geostrategic adversary and if government isn't going to take decisive action on um you know getting our companies out of there getting them to start you know.

Making sort of clearer indicators that they need to move out um then I think it's just shareholders that are at risk and it's the equity markets in general I mean any sort of geopolitical uh conflict in the Pacific would destroy the business models of many of these companies um you know so I I think we need to have much better reporting on.

That and I think shareholders need to start to give management room to make better decisions and start to get them out of there um because at the end of the day I mean right they're all um tied to exactly what you see on the screen I mean there's no escaping this you really want to get your company out of this situation I mean the tone is set from.

The top you've got so many companies right now trading on the New York Stock Exchange from China and they do not follow the same accounting rules the standard accounting rules that every other public company uh follows so I mean the tone is set from the top these companies are going to continue going into China as long as it's legal as long.

As they can make that2 billion that you're talking about Maria they're not making $2 billion that's just the revenue I mean if you actually look at corporate corporate profitability in China it's pretty low in 2019 Commerce dep well look at this I mean 2019 Commerce Department statistics um the revenues of us multinationals in China.

Are about 573 billion um which is about 2% of US GDP so not a big thing when you're talking about strategic competition we could afford to to pull out of there but then the earnings were 38 billion which is just I mean not a meaningful number in a macroeconomic picture so I think you're going to have a lot of individual.

Companies that are deeply tied into this it shouldn't show uh slow down US policy when it takes when you know the time comes to get serious here but I think in the again in the absence of government doing anything all of this risk is on the corporates on the shareholders so I think people have to start making their own decisions if they're not going to.

Get it from the top let's say um you know as you put it I mean this is this is really about corporate decision- making now yes Jonathan thank you very much

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