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AEI's weekly digest of top commentary and scholarship on the issues that matter most

Alienating Allies

The US Is Losing the New Cold War to China

May 3, 2025

For nearly a decade, US-China competition has been intensifying, but so far the Trump administration’s approach threatens to hand China the advantage. Drawing from a recent conference of experts at Johns Hopkins University, Hal Brands elucidates seven sobering lessons on the state of this rivalry

 

 

One of the United States’ severe weaknesses is that its military is simply not large enough for the global challenges we face. In a new piece for The New York Times, Mackenzie Eaglen and Brady Africk document the scale of the investment necessary to rebuild our armed forces.

 

The American economy’s dynamism, openness, and highly skilled workforce provide some of our most significant advantages over authoritarian rivals, but President Donald Trump’s tariff strategy could undermine all of these. In a new interview with Financial Times, AEI Economic Policy Studies Director Michael R. Strain assesses the US economy’s new outlook.

 

One motivation for the especially high tariffs on China is the belief that normalizing trade relations with it in 2000 and 2001 seriously damaged American manufacturing. However, AEI Center on Opportunity and Social Mobility Director Scott Winship shows that the evidence for a negative “China Shock” on US manufacturing employment is thin.

 

In general over its first 100 days, the Trump administration has too often failed to back up its confrontational and ambitious rhetoric with effective execution and follow-through. In an analysis of this dynamic on education policy, Frederick M. Hess warns that the administration will quickly undermine its ability to achieve its best intentions if it does not rethink its strategy.

The Role of Long Histories of "Lived Experience" in the COVID-Era Inflationary Surge

A rough consensus has evolved around the causes of the COVID-era inflationary spike: the disruption in supply chains, the shift in demand from services to goods, the surge in commodity prices that followed Russia’s invasion of Ukraine, and the pandemic fiscal stimulus programs. In a new paper for the Peterson Institute, Steven B. Kamin and Joseph E. Gagnon reveal an additional factor: countries’ past experience with inflation. The authors show that more than half of the variation in inflation across countries during the 2020–23 period can be explained by their earlier levels of inflation, even going back to 2000. These long histories of lived experience dominated other policy measures to control inflation, including inflation targets and central bank independence, suggesting an additional constraint on effective monetary policy.

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