International Economics

  • Russia
    Estimating Future Interest Income From Russia’s Frozen Reserves
    Outright seizure of the Russian Central Bank’s hundreds of billions in frozen assets is currently off the table, but it is still possible to obtain large sums for Ukraine from the interest income on these assets.
  • Trade
    The Man Who Would Help Trump Upend the Global Economy
    As a potential U.S. Treasury secretary, Robert Lighthizer has more than trade policy to revolutionize.
  • Economics
    RealEcon: Reimagining American Economic Leadership
    Matthew Goodman, distinguished fellow and director of the Greenberg Center for Geoeconomic Studies at CFR, discusses CFR’s new RealEcon initiative and the role of state and local officials in contributing to a consensus on U.S. leadership in the international economy. A listening session follows his opening remarks, during which Matt poses a series of questions on American economic leadership and solicit feedback from participants. TRANSCRIPT FASKIANOS: I’m Irina Faskianos, vice president for the National Program and Outreach here at CFR.  CFR is an independent and nonpartisan membership organization, think tank, and publisher focused on U.S. foreign policy. CFR is also the publisher of Foreign Affairs magazine. And, as always, CFR takes no institutional position on matters of policy. Through our State and Local Officials Initiative, CFR serves as a resource on international issues affecting the priorities and agendas of state and local governments by providing analysis on a wide range of policy topics. We appreciate you all taking the time to be with us for this very special session of this webinar series. We’re delighted to have over 200 participants confirmed from forty-seven U.S. states and territories. As a reminder, the webinar is on the record. The video and transcript will be posted on our website after the fact at  So we’re pleased to have Matthew Goodman with us today to lead this discussion. Matthew Goodman is a distinguished fellow and the director of the Greenberg Center for Geoeconomic Studies at CFR, where he recently launched CFR’s newest initiative, RealEcon, Reimagining American Economic Leadership. And the purpose of this initiative—I’ll leave it to him to tell you the reason why the Council has mounted this initiative. Prior to joining CFR, he served as senior vice president for economics and the Simon chair in political economy at the Center for Strategic and International Studies. He’s served as director for international economics on the National Security Council staff, undersecretary for economic affairs at the State Department, and as an international economist at the U.S. Treasury Department. So, Matt, thank you very much for being with us.  Just to set the table, the format for today’s webinar is as follows: Matt will introduce the goals of RealEcon, and how officials at the state and local level can contribute to the dialogue on American economic leadership. We’ll run a short poll after his remarks and have a guided discussion on the U.S. and the international economy. So we’re very much looking forward to hearing your views and getting your insights in this conversation. And I’m going to now turn it over to Matt to take it away from here. GOODMAN: Great. Well, thanks, Irina. It’s a pleasure to be here. And welcome, everyone, to the Council on Foreign Relations. I’m in Washington here where we have our satellite—more than a satellite office, I guess, our co-headquarters down here, as well as New York. But delighted to be with you here for this great opportunity for me. I hope you’ll get something out of it too, but it’s really—it’s really important to my work. So, as Irina said, I’ve been here about six, seven months. And I’ve been building this new project, new initiative called RealEcon, which is short for Reimagining American Economic Leadership. And what we’re trying to do is to have a conversation about America’s role in the international economy, why and whether that matters to U.S. interests, and to Americans. And to try to work towards something more like a durable consensus for a kind of American engagement that benefits us and the rest of the world in the best possible way. As you know, just a tiny bit of background, you know, the U.S. really created the international economic system that emerged after World War II, when we were the biggest kid on the block, and we created all these institutions like the World Bank and the IMF. We created kind of the rules of the road. And that was good for everybody. It was good for us—or, most people. Good for us, good for people around the world. But something started to change, you know, as early as the 1970s but certainly in more recent times, that has eroded the support for that American role as a kind of leader and champion of this international economic order. And so we want to understand why that has eroded and what to do about it, and whether, you know, this is something to be spending a lot of policy time here in Washington trying to fix. Which, you know, I’ll be honest, we think it is worth it. But we want to hear from people.  So the first thing we’re doing—and we’re going to dig into different issues of trade and investment. We’re going to get into foreign assistance, which has been a main tool of U.S. policy, foreign aid. We’re going to talk about the new topic of economic security, which is really about how we manage risks—like the rise of China, like climate change, and supply chain disruptions, other risks that have emerged in the international economy that need kind of new policy solutions. We’re going to, in our project, dig into all of those things. And we’ll give you a little pop quiz about some of that stuff later so we can get a sense of what you think.  But the first thing we’re doing in this project really is a listening tour. And we’ve been around now to a couple of states. We were in Florida last month. We were in Wisconsin last week meeting with local officials, businesspeople, students, journalists, dairy farmers, and ginseng farmers in northern Wisconsin—which was fantastic. And we’re asking them about the issues that we’re going to discuss here today, and that are included in this pop quiz. Don’t worry, there’s no—it’s all pass/fail, and you’ll pass. But we are—think this is really important. And this opportunity and meeting with all of you in this format—I hope we can all meet in person too—but this is a convenient way for us to tap into your knowledge, expertise views. And, you know, views not only as officials, but as kind of citizens of the United States. What do you think about things like trade, and so forth?  So with that background, I’m willing—you know, along the way here I think I can see when you raise your hand. If I can’t, I’ll put up a—send up a flare. But, you know, if there are any sort of fundamental questions about the project, I would welcome those. But what we could do here, I think, is jump straight into the—into this quiz. And then we’ll go through some of the answers. So if, Emily, you’re controlling the quiz, maybe you could put that up here. And it’s just five questions. And I’ll give you all kind of a minute or two to go through and answer. It’s multiple-choice. It’s not challenging. And you can just—your answers won’t be personalized. I mean, we won’t know who answered what. But we’ll get some kind of sense of the room from these results.  I am not seeing the poll. I don’t know whether I’m supposed to be or I’m in the wrong place. But, Emily, or—oh, there it is. OK. So I think you can control the scrolling up and down on your screen. That is, you know, the audience in the webinar. So please just—I’ll stop talking and just take a minute to go through and answer these five questions. And then we’ll talk about them. I’m still here, in case anyone’s worried that they’ve lost the connection. I’m going to give you another thirty seconds. Not sure if I’m allowed to answer, it just occurred to me. OK. Folks think they’ve had enough time, I hope? OK. I hope everybody was able to see those and able to answer them. Again, fairly straightforward questions and don’t require a huge amount of thought, I hope. OK. With that, maybe, Emily, if you could share the results. We have this amazing technology to be able to show you—and if you—if everyone watching could just not scroll down and just focus one question at a time, because I really would like to try to get—try to get some feedback on each of these questions.  So what I will first do is this first question: Which of the following captures best what most people in your state think about international trade? And it seems as though we have a close tie between very good thing and somewhat good thing. But most importantly is that a total of 88 percent of you who at least think it’s somewhat of a good thing. And that’s interesting and not totally inconsistent with the polling done by a Pew Research, or by the Chicago Council, and other polling outfits, that show, you know, something between two-thirds and three-quarters of the American people in answer to this kind of question-answer affirmatively that it is least somewhat good.  But I’d like to challenge people, if we can do this in a sort of timely way, if anybody is brave enough to raise their hand who voted for the somewhat bad thing option—if someone’s willing to raise their hand and explain to us all why they voted that way, and why they think, you know, that their state is not so positive. Is anybody brave enough? And I just want to make sure that we’re going to be able to capture this person. I don’t so far see any hands. Could some brave person just put up their hand using the raise-hand button at the bottom and just even—actually, if you could just even—somebody who’s brave, just put that up and say hello, so I can make sure that I can actually see the raise-hand function, which I am still not seeing.  And I just want to give another thirty seconds to make sure it’s not just that you’re—it’s not just a technical problem here that I’m not seeing it, as opposed to people just being shy. Can somebody—there we go. There are raised hands. OK, I can’t—oh, there they are. OK, well, I see the—I see chat. I don’t see the raised-hand function anywhere. So could somebody from our team, Emily or Andrew or somebody, just call on someone and recognize them, and then have them identify themselves, and then go ahead and try to answer my question?  OPERATOR: Sure. We have Sean Smith.  GOODMAN: OK, Sean. Go ahead and identify yourself, if you would, where you are and what you do. Yeah, go ahead. Q: So I was trying to help you overcome your technical challenges. I was more in the somewhat positive realm, although I think it depends on which of my constituents you’re talking about. So I’m— GOODMAN: Where are you? Where are you? Q: Yeah, Jackson County, Missouri, which is Kansas City, and the suburbs of that. And I will say that the biggest thing that seems to be pointing people toward it being less positive recently is when we seen some of the issues with respect to our supply chain—whether that was in pharmaceuticals or semiconductors. We see that this overreliance on foreign trade results in us not being totally able to take care of ourselves, puts us at risk for economic and security disruptions. And I think that’s pointing people towards the less positive feelings on foreign trade. GOODMAN: I see. OK. And, I mean, can you give an example of a business or sort of type of activity that people are— Q: Yeah. So medication, right? Certain medications that help people that have ADD right now are in limited supply. And there’s just this very basic understanding that that comes from challenges that are outside of the United States, getting these ingredients. And the idea that we just outsource so many things that, you know, we can’t necessarily take care of ourselves the way we used to. People don’t like that. GOODMAN: Got it. That’s really interesting and helpful. And I have now discovered in my great technological capability where—I’ve just discovered where the hands are. So now I—now I do see the hands. And I see that Lystra McCoy has raised her hand. Lystra, go ahead. Q: Yes. Hi. This is Lystra McCoy. GOODMAN: Lystra, sorry. Q: And I am a Monroe County legislator in Rochester, New York, Monroe County area.  So I did put somewhat a bad thing. I’m looking at recently, the Biden and Harris administration designated our area as a tech hub for semiconductor and manufacturing supply chain stability. So we’re—in the area, we look at it as, you know, we’re keeping jobs in home, high labor in the area. So we’re keeping jobs in home, or in the country, and not shipping them out. We’re also keeping money within the country by building locally and building within the country. GOODMAN: That’s, you think, a sort of widely held view, or there are a lot of people, or at least some significant portion of your— Q: There’s a significant portion. GOODMAN: Is that based on kind of current reality or sort of historical experience with—you know, I know I happen to have a favorite aunt who lives in Rochester, and I know the city has been through some hard times historically. But is that what kind of some of this is based on? Q: Yes, absolutely. I would say that it’s based on history. And then right now, I think the labor movement is really big here, big on American jobs, big on American manufacturing, and keeping things—especially, you know, we’re old rust belt in this area, looking to revive the area and bring that technology, bring that economy back. You know, Rochester, known for Xerox, Bausch + Lomb, and Kodak. So kind of to bring that essence back to the area.  GOODMAN: Interesting. Yeah. A good point. That’s really interesting. Thank you, Lystra, for that. And I’ll take Eric January. If you’re—go ahead and unmute and go ahead and make your point, if you would. Go ahead, Eric. You have to unmute, I think. Your hand’s down, but you’re still muted. I don’t know whether the— Q: Can you hear me now? GOODMAN: There we go. Go ahead. Q: OK, great. All right. Yeah. Excuse me, one second. All right. Yeah. So my name is Eric January. I’m CPA and also the clerk treasurer for the town of Merrillville, recently elected.  GOODMAN: Town of? Q: Merrillville, Indiana, the largest town— GOODMAN: Oh, Merrillville, Indiana. Got it. Great. Q: Yes. Right. So I’ve been opposed to the type of trade—and, first of all, when I mentioned, I’m in steel capital, the steel capital of the world where people benefited from the Trump tariffs on Chinese steel. But prior to that, I’m from the Chicagoland area, for the most part. I wrote a book way back in 2005 basically explaining what the first gentleman articulated, is that when we are outsourcing the majority of our goods because of, quote/unquote, “cheaper labor,” what it ultimately ended up doing is creating a level of dependency where we lose—we lose not only the jobs that were associated with it, but we ultimately end up losing the skills, and we become dependent on other people to produce things that we’re more than capable of doing. For no other reason, because it’s cheaper.  And I just think that it creates a lot of economic problems down the road, which manifested during the pandemic when we couldn’t even get our—(inaudible, technical difficulties)—because the Chinese were deciding to keep the stuff for themselves and we had to outsource all of the manufacturing. The same thing with Taiwan Semiconductor. We’re at the—at risk of going to war over producing—China invading Taiwan, because we really don’t want to lose Taiwan Semiconductor. But we started the chip industry, and we decided to outsource it to somebody else, and we created a dependency that’s completely unnatural. So there are a number of reasons, but just to be dependent on anybody as an adult is completely unnatural. It is not about the money. That is completely unnatural. And I think that it’s a setup for failure in the American economy.  GOODMAN: OK. That’s a—that’s a really clear and convincing perspective. And I want to take just one more, which I assume is going to be also somebody who voted in that category, Booter. And then I want to maybe invite—while I’m waiting for Booter to unmute and make a comment, just to say to other people who have heard those comments who voted in the more positive category, either very good thing or somewhat good thing, if there’s anything you want to say in response to any of that, feel free to jump in. Although we’ll have other chances as we go through the other questions. Booter, do you want to go ahead?  Q: Well, actually I was just raising my hand for your technical stuff. But I do have a point from—that I agree with, that the gentleman that just spoke about the outsourcing stuff. But also, I’m in Tallahassee, Florida. But I think down here, especially in the agricultural business with a lot of international trade and exports to other countries, it has been a benefit to Florida. So it’s kind of a mixed bag, I think, from our point of view. GOODMAN: Really good point. And, Booter, we were in Tallahassee—I’d mentioned we were in Florida last month. We were in Tallahassee. I’m sorry we didn’t meet. But, yeah, we heard—we heard some of that. Although, we also heard, you know, tomato growers down there who felt a little threatened by the Mexican competition when the NAFTA agreement was renegotiated, and sort of were concerned about that. So you hear—you hear that as well. But you’re making a very good point. Q: It’s really a mixed bag, I think.  GOODMAN: Yeah. But you’re definitely—you hear a lot from the agriculture sector that are looking for—you know, for foreign markets. The trade is important.  Anybody else want to jump in on this question? Otherwise, we can go down. And we’re not going to leave the topic of trade, so you’ll have other chances to jump in. But I just wanted—if anybody wanted to respond to any of the points that were made there.  Oh, Eric, did you have something else to say, or are you still— Q: Oh, I guess I didn’t lower my hand.  GOODMAN: Oh, no problem. No worries. OK. Well, why don’t we—well, let me just say one thing. Those are all really good points. And I think—I guess—actually, maybe I have a question for you, Eric, because you mentioned the point about the steel industry valuing the Trump tariffs. Actually, you know what? Let me—let me make this point when we get to the second question, because it gets right to this question. So why don’t we look at the—scroll down, everybody, to question number two, or answer number two. And the question was about, you know, how people in your state feel about tariffs imposed by the U.S. government on imported goods. And it looks like a pretty strong majority here feel that targeted tariffs are justified to protect some American firms. And it sounds like, Eric, you’re in that category. At least that category, if not the broad¬-based tariffs. Are others who voted that way—oh, go ahead, Eric. Do you want to say something? Q: No, I’m undoubtedly in that category of targeted tariffs, and maybe tariffs just in general, because at the end of the day governments have to result in tariffs because people are going for the lowest priced goods because they’re out to make some money. But that can be short sighted, in a sense, because they understand that people need jobs, but they’re trying to protect their interests and thinking in the short term. In the long term, it ends up costing the economy. And the only solution to that, in many cases, is to implement a tariff, so the price equals one another. And people are just making decision about who they want to employ, an American or a Chinese? GOODMAN: Right. That makes a lot of sense. But let me just give you another story from our road trip. We were in Wisconsin last week. And we went to a canning factory for canned green beans and other vegetables. That is—I guess it’s OK to say—it was Del Monte, was the brand. And they pick the beans locally and Americans are picking them and then putting them into the cans. But the cans are procured—there’s a factory next door that makes the cans using steel that is both imported and domestically sourced from U.S. Steel and other great steel companies.  And they said that when the tariffs—at this factory, they said when the tariffs were imposed on imported steel—not just from China, but remember it was also Korea, and Japanese, European steel that was also hit—that caused a rise in the price of the steel used in those cans, and made those cans of beans that Del Monte produces less competitive than cans of beans coming from China with, you know, China’s steel over there, with beans over there, than coming over here tariff-free and competing with the—with the Chinese—with the Del Monte beans.  And so the people in the Del Monte company were concerned about whether they were going to be able to support their position and job. So, you know, there are these sort of downstream effects are caused if you—if you put tariffs on, you know, inputs like steel, and, you know, I’d welcome response to you—from you, Eric, or others who voted that, you know, tariffs are either not a good thing or are only justified in some cases. Is there anybody who wants to—Tom Smith, you want to say something about that? Please identify yourself first, if you would. And you have to unmute here. Still not—there we go. Q: Can you hear me now?  GOODMAN: Yeah. Q: OK. Tom Smith, mayor pro tem, Weddington, North Carolina, which is a—basically, a suburb of Charlotte, North Carolina.  So we were in the area that was the textile hub of the U.S., which was decimated. And things have transitioned. But I look at—and I’ll say this, I’m a retired banker. And I’ve financed a lot of companies domestically and internationally. And when we first started the international part, I thought this was pretty good. We’d get cheap things for the consumers. And unfortunately, you know, the business gravitated heavily to China. And once we let them in the WTO, everything that—I think the wheels just came off of the fairness factor of competition. It is so difficult to compete with people who do not have the same values.  And back in the textile industry, there was a time they were importing finished apparel into our country lower than the world market price for the cotton. So how can anybody compete against trade tactics like that? So—and that goes on with the steel industry. They’re heavily subsidized. You know, Nucor Steel is headquartered in Charlotte. And I know the CFO real well. And they’re—and they’re the lowest-cost producer in the world, if you take away tariffs—not tariffs, but subsidies. And subsidies are the issues they have to compete against. Not production. The cost of a facility, the machinery and equipment, is a huge part of it. The cost of capital is the same around the world. Labor is an insignificant part of the whole component of making the steel.  It is regulations and subsidies that are the main factors against them. And I’ll just say this, the U.S. did a great job of exporting what were deemed to be polluting companies to Asia. That’s what we effectively did, because they didn’t have the same environmental rules as we do. We cleaned up our water and air to a huge degree at the expense of them. And that’s where we are. But the price was hollowing out our manufacturing base. So I think it is just terribly difficult to work with a country like China, where their idea of the rules and the rest of the world’s is something else. Europe is going through that heavily right now with China. We have a lot of German businesses in our town—not—in our area. And, you know, what goes on with China affects them. And they’re having tremendous issues with competition and— GOODMAN: Especially now, from electric vehicles and— Q: Oh, everything. Everything. And— GOODMAN: No, that’s a really good—sorry. Go ahead. Q: Yeah. But, I mean, I look at the point that they do not play—I mean, the worst thing, in my mind, the Western world ever did was allow China in the WTO. This decimated manufacturing jobs in the U.S. and Europe, and took—and took away the ability to work with the Caribbean and Central American countries for labor, to employ them by doing, you know, the labor-intensive work of, let’s say, a textile industry or your car. It just took it away. You know, everything—you know, it was all taken away and gravitated to one place. So I financed a lot of Chinese businesses over the years as they imported in here, their import operations. And basically regret every minute of it now. But they’re very good—very good businessmen. But when it comes to equity and fairness in trade, that’s not in their vocabulary. GOODMAN: Right. So I really appreciate those comments, Tom. And I—when I—as I—as I—let me say a couple things in response to that. But let me—let me invite others who want to jump in on this question about tariffs if they want to raise their hand and contribute, you’re very welcome.  All good points. And, you know, in theory, the WTO system that we created had rules about things like subsidies, right? And that you can’t subsidize, you know, to create these unfair advantages. And if you do, you can be subject to penalties, you know, the other country can retaliate, and so forth. That was, I think, constructed at a time before China was really such a big part of the WTO. It wasn’t even in the WTO when those rules were created. And I think it envisaged a different kind of scale of subsidization. You know, it was more targeted, specific subsidies. And China, you know, was over time seen to be massively subsidizing a lot of their production. And that—the WTO, at least a lot of people would argue, is not fit for purpose to try to constrain those subsidies. They’re just too massive and too widespread. So that is a big part of the debate now about trade policy.  On the other hand, it raises the point that the purpose, at least in theory, of trade policy is to try to not just open markets in both directions, but also to try to establish those kinds of rules, that then subject countries to, you know, penalties if they don’t, including your environmental point. You know, raising standards there and having penalties of countries don’t live up to those. That’s the theory. Whether it’s actually been done or implementable is another question. But that’s—but if we—if we don’t try to do trade policy rules, then, you know, you could argue that that’s going to create even more of these problems. I think that’s that would be the argument on that. But your points are very well taken, and very well-articulated. Thank you, Tom.  Did Gail want to jump in here? Go ahead, Gail. You need to unmute there. Q: All right. Can you hear me now?  GOODMAN: Yeah.  Q: Yes. Thank you. My name is Gail Patterson-Gladney, I’m a Van Buren County commissioner in Michigan.  And I represent a lot of farmers, blueberry farmers. And I don’t know if that will be classified under what you’re discussing now, but because lot of the farmers are undercut in their prices by Canada and Mexico, they are struggling. And I don’t know if it’s because they don’t have enough tariffs on those crops coming into the country, but I didn’t know if you could clarify that.  GOODMAN: That’s really interesting. And I don’t know the blueberry business. But I—but I understand from, you know, again, having just been in Wisconsin, where there’s a lot of dairy and other—actually ginseng too—where there’s competition with Canada, in particular, that you hear things like what you just said about blueberries. And that is, you know, a part of the story here, that there’s competition from especially these neighboring countries, but also, you know, China and other places, that can make it harder for, you know, American producers to compete.  And, you know, I—again, I don’t know about the blueberry case, and what kinds of tariffs we might impose, or do impose, or might impose on those, and how they’re treated under the U.S.-Canada-Mexico Free Trade Agreement. But the—you know, the—you know, it’s very—just like any other product that we put tariffs on, that can help provide some protection to or level that sort of competitive playing field. On the other hand, you know, as I was mentioning, in the steel can case with Del Monte, you know, it probably ends up raising prices for consumers and for folks, as it were, downstream of that—of that production. So that’s the—that’s the sort of trade-off here, if we were to use tariffs, you know, on a product like blueberries. But interesting point. Thank you. I didn’t—maybe need to get up to Michigan and see the blueberry business up there at some point. Q: Yes. OK. Thank you. GOODMAN: That’s very helpful. Thank you, Gail. Q: You’re welcome. GOODMAN: I mean, unless there are other points on that, and I’d welcome other points on trade, we’ll probably have a chance to circle back on that. But I do want to get through the other questions, and then we can have a period at the end there, of just sort of open comments that anybody wants to make. But, so number three, if we could scroll down to that. We asked you about foreign aid. And the question is, does—you know, do folks in your state think that foreign aid is mostly good for the U.S. or mostly harms the U.S.? And it seems like—unless there were just two people who answered and it was a tie—there seem to be sort of split views here. And I wondered if anybody wanted to take that on. I see Lynette has got her hand up. I don’t know whether it’s this question or the previous one. Either one is fine. Go ahead. Lanette. Q: It’s this one, Can you hear me?  GOODMAN: OK. Yes, ma’am. Go ahead. Q: It’s this one. And let me preface it by saying that my citizens here—I’m from Pine Bluff, Arkansas. I’m a city council member here. And I do know that—let me preface it by saying that there are a lot of— GOODMAN: Oops, we lost you there. At least I can’t hear Lanette anymore. FASKIANOS: I think Lanette, you muted herself. There you go. GOODMAN: There you go. OK, go ahead. Q: Am I there? OK. GOODMAN: Yes, you’re back. Good. Q: Can you hear me? GOODMAN: I can hear you and see your wonderful Zoom picture too, so. Q: OK. I am the city council member here in Pine Bluff, Arkansas.  And let me preface it by saying that the citizens here, there are some citizens here who really do think that the United States need to help more of our Americans before we start giving aid overseas. But overall here, we do believe in aid, foreign aid, because a lot of our citizens here are veterans, and educators, and farmers. And so we do believe in foreign aid, because we do believe that it promotes stability, you know, in regards to addressing poverty and inequality. And that can help us not have a lot of terrorism come our way. You know, it kind of lightens the threat of terrorism. But also economic interest, just being able to foster that economic growth where Americans, we can have our goods also have opportunities to grow into other markets outside the United States. You know, that win-win situation. And then just with the United States being the humanitarian country that we are, you know, being able to help those that are in need gives us a great reputation globally.  And then, in regards to—and I’m trying to go quick because I know everybody else got to speak too, but there’s a lot that I want to say on that. But also, it could build alliances with other nations and countries when we give foreign aid to others. And so just and then—and having that foreign—helping with the foreign aid, and having that camaraderie and that relationship with other countries can also help us nationwide attack a problem that all of us are having, in reference to climate changes, and pandemics, and food insecurities, and anything else that we might be facing that’s not just localized to America, but to everybody globally. So that’s just what I wanted to say.  GOODMAN: OK. So, Lanette, I think that the current administrator—that is, the head of the U.S. Agency for International Development, which is our, you know, government agency that provides bilateral foreign aid, she could not have given a better speech than the one you just gave—about the case for foreign aid, the combination of stability, sort of prosperity, and economic benefit, the humanitarian cause, the diplomatic benefits. I think you’ve perfectly summarized the case for. And you preface it by—you know, by saying that, obviously, people want—you know, want— Q: More aid here. GOODMAN: Well, they want money to be spent at home, too.  Q: Mmm hmm. GOODMAN: So I think that’s understandable. You know, we don’t spend that much on foreign aid. It’s, you know, 1 percent of the national budget. So it’s not nearly as big as people think it is.  Q: It isn’t.  GOODMAN: Right? But it is—but it is a legitimate issue for people to be—to be looking at and questioning. But I think you’ve made a lot of great points there. And that would be exactly what somebody would say about, you know, everything from the Marshall Plan after World War II, when we made that sort of bet that if we reinvested in rebuilding Europe and Japan they would become strong allies, they’d become strong markets, economically they’d be more stable, and so forth. Right up to things like—I often talk about the PEPFAR initiative, the President’s Emergency Plan for AIDS Relief, which President George W. Bush launched twenty years ago in sub-Saharan Africa. And, you know, for a cost of only a few billion, I think, over that twenty years—which, you know, in the scheme of things is not a huge amount of money—we’ve saved something like 25 million lives and created huge, great goodwill in Africa. So, you know, it is a strong thing.  On the other hand, it’s American taxpayer money. And, you know, people are right to question whether this is the best use of that money. So you hear that as well. And I suspect that some of the people who said it harms the U.S.—does anybody else want to jump in on this, especially to make that point about why it’s not a great investment for the U.S.? If not, we can skip on. I know we’re—time is ticking here. So why don’t we go through the next two, and then we’ll—and then we’ll come back and give you a few minutes at the end to intervene on anything you want to talk about.  So, number four: Would you support or oppose the government’s further restricting investment with China? So it looks like a pretty significant majority support that, at least somewhat, if not strongly. For, like, almost 90 percent. So does anybody want to comment on that, either—I was like to take the minority who didn’t make that point. Like, why would you oppose further restricting investment with China? Does anybody want to who—voted that way, that 13 percent, want to raise their hand and explain why they don’t think restricting investment with China is a good thing, or further restricting it? Or on the other side is fine too. Welcome any additional hands. I don’t see any hands yet. There we go. Michael, go ahead. You need to unmute. There we go. Go ahead, Michael. Still can’t hear you. You look like you’re unmuted, but—OK. I’ll tell you what, Michael—are you there? OK. I’m not hearing you. Is anybody else hearing Michael? I think maybe— OPERATOR: I think we’re having problems hearing Michael. But, Michael, I encourage you to use the written Q&A as well if your microphone is not working.  GOODMAN: OK. OK. And I—if anybody else wants to comment on this question about further restricting investment with China? Anybody have any thoughts? Michael, you want to try again? Still not coming through. Anybody else want to jump in on that? OK, Eric. Oh, you got to unmute there. OK.  Q: Can you hear me? GOODMAN: Yes, go ahead.  Q: Sorry. Just in terms of investing in China, it’s already been proven that they’re using the investment to gain intellectual knowledge that they didn’t have before. And I’m all for businesses and countries being able to support themselves, but it shouldn’t be at the detriment of our intellectual property. And so restricting foreign investment in China, it can make some sense. But at the same time it can also do us some harm with the relationship that we have with China as a trading partner. But the trading has been completely in favor of China.  And on that basis, I would probably agree that we should restrict the transfer of intellectual property to China. But at this point, so much of our intellectual property has already been stolen, I don’t know that we could ever recover from it, because they dominate the solar industry, and so many other different industries, and they’re determined to dominate the electric industry as well by flooding our country with so many cheap goods with intellectual property that they may have gained unlawfully, that I just don’t know that we can recover from it. And just in terms of that. So restricting it, yes, I think we should restrict it. GOODMAN: OK. So that’s investment to China. And there is both a concern, you know, here in Washington about investment going in for that reason, intellectual property also, because of the point about concentrating our risks, or, you know, our dependencies. I think you made this point earlier about dependencies in China. And so trying to get countries—companies to pull out. Of course, companies have their own reasons why they’re pulling out of China, because it’s not growing as fast, because it’s a difficult market to be in, in addition to U.S. government policy measures that may be incentivizing that move out of China.  And then there’s also a new set of guidelines on outbound sort of financial investment, like Tom who’s a finance guy would probably know about this. That there’s an effort to restrict financial investment into certain technologies in China, like, you know, advanced AI-related and other high-tech production in China. So there’s a lot of conversation about investment that direction. There’s also investment this direction. And the question about whether there—we ought to be restricting Chinese investment into the United States from China. And I don’t know if anybody has a view on that. I see Alderman Lanette has got her hand up again. Do you want to offer any thoughts on this topic, Lanette? Go ahead. Q: OK. Can you hear me?  GOODMAN: Yes, ma’am.  Q: And, again, I agree with the gentleman that just spoke about the intellectual property. We have to protect it. You know, so limiting Chinese investments can definitely help us in that regard. And then also just thinking about national security on the whole. When it comes to Chinese investments and stuff. We already have seen issues as far as technology and espionage and things like that. So we want to definitely have some kind of control, and some kind of mechanism in place to guarantee—we can’t always 100 percent guarantee national security. But we should come doggone close to it. So we want to be careful of what we do in regards to—in regards to that.  So I just wanted to tap in on the gentleman’s question. I definitely agree with him. And then, just being able to level the playing field. I mean, the Chinese, like we know they have different values and different kinds of thoughts sometimes when it comes to trade and business and things like that that we do. So just being able to level the playing field and stuff. So I think the restrictions definitely need to be in place. I think that we got to be careful when we’re dealing with Chinese—well, anybody, really, outside of the United States. But we definitely know that they are—they can be a potential threat if we don’t be careful. GOODMAN: Great. Well said. OK, great, great points, all of those. Again, thanks, Lanette.  And let me take John Kurtz and then Stephanie Agee. And then we’ll come back to you, Tom, again. But I wanted to get new voices in here. So, John, go ahead and unmute yourself, and then feel free to make your point.  Q: Hi, this is John Kurtz from Buchanan County, Iowa. I’m a county supervisor.  We’re very heavily in the agricultural industry, but we’re also adjacent to two John Deere factories here. And Chinese investment is a frightening thing in our farm economy. They’re buying up land. It’s not just Iowa, it’s South Dakota. There’s a lot of areas that are being invested by China. They’ve also taken over one of the biggest pork producers in the United States, Smithfield Foods. And I’m afraid that if we let China have too much power over there, if we were to get into an armed conflict with them, they could shut us down. And we would really stifle our production at factories and everything else with all the product that is being imported to support those factories. GOODMAN: Right. Good. And that national security point is a particularly important one, and one that obviously gets a lot of conversation here in Washington these days.  Q: Well, remember what happened during COVID when the ports were all backed up and we couldn’t get any product in the United States. And that could very easily happen again.  GOODMAN: Yeah. Yeah. And that’s another problem in the world, another disruptive factor right here around Washington. Here we have this terrible thing with the bridge in Baltimore that’s having a visible effect here on supplies of a lot of things. So good points. Thank you, John. Appreciate that.  Stephanie, do you want to jump in here? Q: Yes. Hi. Can you hear me?  GOODMAN: Hi. Q: Great. Matt, good to see you. Stephanie Agree from the state of Virginia, vice president for— GOODMAN: I remember you. How are you?  Q: Doing great. Doing great. Thank you so much for—to you and CFR for organizing this session. I really appreciate it.  So as my title would suggest, I’m focused on international trade. I’m here for it. I absolutely understand many of the—the impacts that it has had negatively in parts of the country, but I don’t want to ignore the tremendous positive impact it’s had on our country as well, and the world for that matter. Which is also important. Impacting the world and having positive impacts for the world is important. And I think that’s been noted in several different comments here, where people have talked about the importance of U.S. aid and how it’s important for us to have these positive impacts so that we have less unrest in other parts of the world, that the U.S. then has to end up responding to.  But specifically, back to the comments about restrictions on China investment. I answered this—I said, you know, somewhat oppose them. And the way that I was thinking about it was more about restrictions by the United States on companies’ ability to invest in or trade with China. So I probably—I might have answered it slightly differently than others. But I think my point here is my reservations about the government, the U.S. government, limiting the private sector’s ability to make investments and to make decisions. Also noting that there are lots of rules around the exports of products and services that have any impact on national security. The U.S. government is doing a very good job, I feel, at that, and being very protective of those things.  So I just want to note that those restrictions are in place. They certainly impact a lot of my Virginia companies that are trying to export their products, not necessarily to China but to other parts of the world. So if we—if we—if we paint it with a broad brush and say that, you know, limitations on the private sector’s ability to make government—to make their own decisions about where they—who they do business with and how they do business, that’s really where my—kind of where my opposition lies.  GOODMAN: Right. Got it. Those are really good points, Stephanie. And, you know, traditionally in the investment policy world there’s been a concept of the negative list approach, which means things that you feel for national security reasons or other reasons you don’t want, you know, foreign investment into your country. And that’s a legitimate issue for every country. That you put them on a negative list, and you say: You cannot do these things. But if it isn’t on that list, then it—you know, it’s open and it’s possible to do investment and have the benefits of that cross-border flow, and the private sector dynamic that you discussed. That’s been the traditional approach to investment policy. We tried to get China to move to that approach too, by the way, a more negative list approach. But these days, there’s more talk about broader sets of restrictions and arguments in favor of a new approach here. But there is a cost.  By the way, I didn’t say at the beginning, we have a—sort of a branded platform as part of RealEcon called Trade-Offs. And we’re writing essays. And we might also do debates or other things over time to talk about the trade-offs. Any one of these policies that we’ve been talking about, there’s some good things, some bad things. So it’s, like, there’s no—very few things in life, probably, but also in this area of international economics, are absolute. It’s sort of there’s some positive, some negative. And either choice might be legitimate, but there’s usually a cost of some kind. And so the question is, you have to decide which—you know, how much cost are you willing to pay for some other benefit? You know, that’s part of—it is intrinsic to—it's really at the heart of a lot of the stuff we’re looking at here. So stay tuned for more trade-offs conversations.  OK, Tom, you’ve been patient. And then I’m going to just give you—if you can be as concise as you can. And then I’d want to just get to this last question, then give anybody any further chances to jump in on any of this. Go ahead, Tom. You’ll need to unmute there. There you go. Q: There it went. It finally went. I was clicking on it several times and it finally took. On the foreign aid issue, I am for targeted foreign aid. I believe most people here are. You do have to screen it carefully to make sure you are getting value for what you’re doing and it’s not just indiscriminate, giving the taxpayers’ money away to—because people are very sensitive to that. Like, there’s a lot of places with needs. And a lot of it’s because of upheavals or refugee status, or whatever in the world that we really need to help them. I was just reading the Financial Times today about the Solomon Islands just electing a prime minister who is pro-China friendly. And the U.S. evidently over the past number of years has not been, let’s say, trying to give them the warm and fuzzy. And the Chinese have made great inroads there.  And so that’s—you know, you have to pay attention to that and that take your eye off the ball. But, again, when it comes to trade, my real beef is with China. And it’s because its authoritarian regime, all the businesses, basically, are—even the private business, technically, have to kowtow to whatever the regime says. And once the current leader came in place a number of years ago, they took a real hard tack in a different direction from where they’d been going for twenty-odd years. You know, they’ve gone back to really centralizing everything and to trying to be extremely outwardly aggressive. And it is unfortunate. GOODMAN: Yeah. Yeah, no, under this president— Q: And the initial intent of going—working with China was to improve them and improve the world and make them a better place and more agreeable and/or a country that could easily assimilate into the world, if you know what I’m saying. And it’s having a total turn. And it’s become very, very authoritarian. And when you combine authoritarianism with the power they had developed under the more liberal policies, and convert that one way, it is very dangerous for the world and extremely impossible to compete with. And given they’ve turned so authoritarian—I mean, they’re a virtual police state over there. And nothing gets done unless the government wants it done. And this may sound hard and crass, but they have almost become what I would call the new Nazi, Germany, when it comes to a business model. And they’re a police state. And it’s very difficult to deal with something like that. And feeding that monster isn’t going to help us. It’ll never, never help us. So it sounds hard, but I look at it. It’s a police state. Government control. And they wield a lot of power. But people still say, I can make money—free enterprise. I can make money off of trading with them. So to me, it’s a dangerous game. It’s a dangerous game we’re in right now. And I wish the leadership would change and become more moderate, obviously, but— GOODMAN: Yeah. I think no question under Xi Jinping, the current president who took over in 2012-2013, there has been that shift, as you mentioned, very sharply. And it’s very problematic for us and, I think, actually for them too. I think long term it’s not good for them. And but, yeah, there was, you know, twenty years ago a sort of different leadership that had, I think, a different approach to reform. And that I think was genuine. I think they were trying to move in a different direction. But that’s the China we’re dealing with today. So those are good points.  Let me—let me just ask—I see that—I see that we’ve got a comment in the—in the chat from Greg. I don’t know if you want to make that point to the group by raising your hand or just speaking. That’d be great. And meanwhile—OK, you got your hand up. Go ahead, Greg. If you can introduce yourself. You’ll need to unmute there. Yeah. Can’t hear you yet, Greg. But if you could try to unmute one more time. And then if not, I can read your question, and your point quickly here. OK. Don’t think we’re getting you here. So yeah.  No, the point you’re making is about electric vehicles. And China’s advancing and making actually, frankly, quite good electric vehicles now. Whatever you think of how they got the technology or whatever, the reality is they are producing electric cars that are pretty good and are cheaper than Teslas and things. And I drove one of these in Europe last summer when we just happened to rent a car and it was one of these BYD Chinese cars. And it’s not bad, actually. So and it helps address climate change, as you make in your point, but it also—because they’re making these things with huge subsidies and undercutting producers here and in Europe and so forth, it’s creating a backlash and a concern about whether we’re going to be able to produce these things ourselves, or sustain it.  So let me just quickly for—great point. And just before, John, you get on there, just thirty seconds. Does anybody have anything to say about the climate change point? I guess, in a way, Greg was just getting to that by talking about electric vehicles. Anybody want to say—is that the point you wanted to address, John, or was it something else? John Kurtz. Go ahead. Q: Yes. I wanted to comment on the climate change issue. No matter what we do in the United States, until India and China do something it—we’ve already made huge strides in the United States. And right now, in Iowa, South Dakota, North Dakota, we’re being pressured put in this CO2 sequestration plan to capture CO2 from our ethanol plants. And it’s crazy. I mean, CO2 is what fuels plants to live. And here, we’re making this big push to capture all the CO2. What’s that going to do to our farming economy? Trees, everything—we all learned it in school. That’s the only way they survive, they produce oxygen from CO2. And our farm community is very, very concerned about it. GOODMAN: Good. And that is a strong argument on the side of, you know, of concern about some of these efforts to address climate change. On the other hand, you know, there’s an argument that’s pretty powerful that this is a—you know, becoming a planetary problem that is going to cause all kinds of other, you know, disruptions to our economic capabilities. And certainly, the Biden administration feels pretty strongly about that, and has invested $370 billion or something through the Inflation Reduction Act in climate and clean energy solutions.  And some of that’s providing economic benefit in your states, I can imagine. I wish I could explore this really important topic more thoroughly, but we’re already past time and there’s a hard rule at CFR not to go over time, which I apologize for having done. Let me just thank everybody for great comments and input. Not enough time. It’d be great to do this again. And I hope to do it in person. Certainly, if you come to Washington please swing by CFR. We’d love to hear more, have more conversation with you. In the meantime, thanks a lot, everybody. And back to you, Irina. FASKIANOS: Thank you so much, Matt. Really appreciate you doing this, and to all of you for your comments. We will send out a link to the webinar recording and transcript, along with contact information for Matt if you want to follow up with him, and if you want to invite him to your state for—to show him what’s happening in your communities. I’m just offering you up there, Matt.  And to learn more about CFR’s RealEcon Initiative, you should go to, which we put in the chat window and we will also include in our follow-up note to all of you. And, as always, we encourage you to go to, and for the latest developments and analysis on international trends and how they are affecting the United States. Of course, please do share your thoughts for speakers and topics for future webinars. You can email [email protected]. Again, thank you for all that you do in your communities. And we look forward to continuing the dialogue. Enjoy the rest of your day. END

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