China’s trade attack ‘a case study in economic coercion’

China’s recent trade actions against Australia offer a case study in economic coercion for geopolitical purposes. Its aim is twofold: to bend Canberra to Beijing’s will and to decouple it from the US alliance system. Australia has withstood such pressure to date, but needs American support. 

In the Centre for Independent Studies paper, Resisting China’s Economic Coercion: Why America should support Australia, I warn that capitulation to this coercion would embed its malign use in a new China-dominated authoritarian world order, in which smaller states risk being reduced to vassals.  

Countering China’s trade coercion is a necessary defensive measure to protect the prosperity and security of every nation that values its sovereignty and an open trading system. Capitulation would embed the use of coercion in a new, China-dominated authoritarian world order in which smaller states risk being reduced to vassals. 

President Joe Biden has made it abundantly clear that the cornerstone of his foreign and trade policies will be working with friends and allies to restore American leadership and advance the cause of democracy in a more contested world. But in the face of China’s epochal challenge, neither goal will be achieved unless the Biden administration demonstrates tangible support for hard-pressed democratic allies like Australia.  

The ‘Land Down Under’ has been on the receiving end of an unprecedented campaign of intimidation and coercion from Beijing, clearly designed to bend Australia to China’s will and decouple it from an alliance system that has underpinned and sustained American power for 75 years. 

Senior administration figures have publicly declared their support for Australia, telling their Chinese counterparts that relations won’t improve until they cease their “blatant economic coercion of Australia” and “a more normal interplay between Canberra and Beijing is established.” But they have yet to spell out how they intend to address the issue. 

Unless Washington imposes costs on nations that use coercion, China has little incentive to stop using a tactic that has been successful in forcing smaller countries to submit to its demands. 

Conversely, US support for Australia would send a powerful signal to friends and competitors alike that Washington is prepared to resume a global leadership role after the chauvinism of Donald Trump’s America First approach.  

It could also stimulate the emergence of a more formal alignment of democracies, strengthening their collective ability to stand against China’s coercive practices and by extension the authoritarian, state dominated model that China promotes. 

Countering China’s coercive diplomacy and power trading is a necessary defensive measure to protect the prosperity and security of every nation that values its sovereignty and an open trading system.  

This paper argues that the Biden Administration should lead in helping Australia and other targeted countries to defend themselves against China’s coercive practices. The aim should be to build the broadest possible coalition of the willing through a multi-pronged strategy that plays to America’s strengths by building a united front of democracies; recalibrating US diplomacy with like-minded countries; supporting agile multilateralism; and prioritising neglected ties with Southeast Asia. 

Canberra has shown the way forward, but needs Washington’s support. If Australia fails to maintain its independence in the face of China’s mounting pressure, other countries may well conclude that appeasement is the only feasible alternative.  

That would signal the end of American pre-eminence and the rules-based global order the US created and led for more than seven decades. 

Dr. Alan Dupont AO is author of the Centre for Independent Studies paper, Resisting China’s Economic Coercion: Why America should support Australia. He is CEO of geopolitical risk consultancy the Cognoscenti Group, and has an international reputation for his expertise on defence, foreign policy and national security and has worked extensively at the interface of security, politics, business and technology.