Many Americans support President Donald Trump's anti-China policies. Photo: AFP / Saul Loeb

President Trump has more common sense than the people who work for him. After nearly two years of failed efforts to shut down China’s Huawei by hectoring allies, banning sales of US components, and imposing US content restrictions on foreign sales to the Chinese company, the US President apparently has had enough of it. Yesterday he slapped down the US national security establishment in a set of blistering tweets.

Who are the Real Turn-Coates?

News media yesterday reported rumors that US Deputy National Security Adviser Victoria Coates might be reassigned from the White House to the Department of Energy, in response to accusations that she authored the infamous Sept. 5, 2018, New York Times “Anonymous” op-ed as “part of the resistance against the Trump Administration.”

Last year National Security Adviser Robert O’Brien, who replaced John Bolton in September, made Coates one of his principal deputies. I would bet my reputation that the accusation is false. I worked for Victoria Coates on the foreign policy advisory team for Ted Cruz’s 2016 presidential campaign. Trump’s enemies want to strip the White House of highly-qualified people loyal to his agenda, and I would look for the culprit in L’Affaire Coates among opponents of the president’s Middle East policy in the intelligence establishment. Angelo Codevilla is right: the best thing the president can do is to abolish the Central Intelligence Agency.

CIA plot victim?

Speaking of the CIA, it hasn’t been audited since it was created more than 70 years ago. Lt. Gen. Michael Flynn, Trump’s first National Security Adviser, proposed an audit and promptly got sandbagged by an FBI trap to elicit supposedly false statements that would make him a criminal. Now Attorney General Bill Barr has appointed a special prosecutor to re-open the Flynn case. I’ve believed from the beginning that Gen. Flynn was the victim of a CIA plot to eliminate the only top intelligence official who knew where bodies were buried and money was stashed. President Trump may have had enough of CIA “whistleblowers” who constitute a de facto mutiny against the Commander in Chief. Watch the Flynn case to see how far Trump will go to clean house.

Own Goal

Germany’s Die Welt reports that Economics Minister Peter Altmaier wants to “strengthen economic cooperation with Russa.” That’s a response to US sanctions on Western companies who help to build the Russian-German Nord Stream II gas pipeline across the Baltic Sea. With only 170 kilometers left to finish, US sanctions forced a Swiss company to abandon the project. Trump wants Germany to buy American liquified natural gas at a 30% markup over the Russian product, to reduce Germany’s economic dependency on Russia (and maybe benefit US gas producers). This probably will push Russia and Germany closer together. Neither the Germans or Russians will say much about it, but a Russian pipe-laying ship is en route to the Baltic from its home base in the Far East. That’s another own-goal for Washington.

It’s all about ROE

A senior Huawei executive told me last year, “We don’t understand why the US didn’t have Cisco buy Ericsson and create a US national champion to compete with us.” Good question, with a simple answer. Last year Cisco’s return on equity was 35% and Ericsson’s was minus 4%. Sometimes long-range strategy needs to come before ROE, though. Huawei has an 8% return on equity because it plows money into R&D, spending more than its rivals combined, and keeps prices low to build market share.

US Attorney General Bill Barr mooted the idea of the US taking an equity stake in Ericsson, and a senior European anti-trust official today indicated that the EU wouldn’t oppose it. Industry experts tell me that’s America’s best option to forestall Chinese dominance in 5G broadband, a key strategic technology. Ericsson is a well-run company, and government support could give it an edge against Huawei. Proposals to build competitive companies from scratch on the platform of software companies are less credible. An established organization that can make, market and test complex systems is a better option.