NEW YORK – The strategic rivalry between China and the United States has incited an outbreak of historical analogies — Athens versus Sparta, the United Kingdom versus Wilhelmine Germany, or the U.S. versus the Soviet Union. But the fracas over the U.S. actions against the telecommunications giant Huawei recalls another antecedent: the pre-World War II U.S. pressure campaign against Japan, culminating in President Franklin Roosevelt’s momentous decision in July 1941 to freeze Japan’s assets in the U.S.
Once again, the U.S. faces an aggrieved Asian power seeking to claim its place in the geopolitical sun, displace the U.S. from Asia, transcend its economic dependency on the West and rewrite international rules to advance its interests. That Asian power is stoking nationalist fervor and repressing dissent at home. And the U.S. is attempting to use economic leverage to change its behavior while increasing military deployments to shore up alliances and assert its presence.
Of course, the 2010s are not the 1930s. China has not invaded any neighbors, as Japan did to China. China and the U.S. are far more economically entwined than were prewar Japan and the U.S. Their joint status as nuclear superpowers immeasurably raises the stakes of armed conflict. And so on.
I’m not arguing that sanctions on Huawei — a private company, not a country — will light the fuse for a 21st century Pearl Harbor, or that Roosevelt intentionally goaded Japan into its day of infamy. Yet the dynamic of the U.S. pushback against China is reminiscent of its earlier effort against imperial Japan, with many of the same pitfalls.
The decision to put Huawei and its affiliates on an entity list requiring U.S. suppliers to obtain licenses to do business with them is an existential threat to a high-profile Chinese firm that relies on U.S. components. It is also an upward ratcheting in the treatment of China as a “whole-of-society threat.”
The Trump administration has intensified maritime operations to counter China’s territorial encroachments in the South China Sea, blasted Beijing for its exploitative behavior in advancing its “Belt and Road” initiative, imposed tariffs to force it to reverse unfair trade practices, blocked Chinese investments in the U.S. and increased support for Taiwan.
Trump naturally sees political benefit in firing up his base by bellowing that “we can’t continue to allow China to rape our country.” But as fair-minded Chinese observers have also pointed out, “U.S. policy has changed because China changed,” with Xi Jinping charting a more aggressive course for his country since taking power in 2012.
The U.S. decision in the summer of 1941 to freeze Japanese assets and impose an effective embargo on the oil that its economy and military needed to survive was likewise a drastic step.
Tightening the screws
Following Japan’s savage invasion of China in July 1937, its threats to U.S., British and other foreign interests grew, as did its increasing cooperation with Germany (solidified by the Tripartite Pact three years later). In October 1937, Roosevelt gave a speech likening the outbreak of war to a sickness that had to be stopped: “When an epidemic of physical disease starts to spread, the community … joins in a quarantine of the patient.”
A fitful U.S. response followed. Reacting to Japan’s bombing of Chinese cities, the State Department counseled aircraft manufacturers in June 1938 not to sell planes to countries that bombed civilian populations — a so-called moral embargo. In July 1939, the U.S. notified Japan that it would abrogate their bilateral treaty of commerce. In 1940, the U.S. restricted the sale of aviation fuel and scrap iron (Japan’s steel industry relied on the U.S. for three-quarters of its scrap imports), and embargoed machine tools that could help Japan’s war effort.
Yet Roosevelt and Secretary of State Cordell Hull left these restrictions riddled with loopholes. As historian Jonathan Utley told me, “Hull’s strategy was not to cripple Japan but to keep it economically dependent on the Western powers and deter it from expanding further south.” Roosevelt’s administration was focused more on the growing threat posed by Adolf Hitler’s Germany. And many of the commercial restrictions against Japan were essential to building up the U.S. defense-industrial base in the event of a war in Europe. Japan was still permitted to buy some types of scrap; moreover, U.S. restrictions on aviation gasoline deliberately left it able to buy lower-octane fuel that its planes could use.
As Hull and many U.S. flag officers saw it, the U.S. military wasn’t ready to fight a two-front war. A sudden shutoff of U.S. raw materials might spur a Japanese attack on resource-rich Southeast Asia, something Roosevelt warned his Cabinet about in the fall of 1940. But Roosevelt’s team was also divided, with hawks such as Treasury Secretary Henry Morgenthau and Secretary of War Henry Stimson holding that Japan would fold under pressure.
Those differences played out fatefully in Roosevelt’s decision to freeze Japan’s assets the following summer. Via decrypted Japanese signals, the U.S. learned of Japan’s plans to occupy southern Indochina, a jumping-off point to take over British and Dutch possessions that were rich in oil, rubber and other resources. To deter that — as well as any Japanese attack on the Soviet Union in the north — he bolstered the U.S. military presence in the Philippines, bringing back Douglas MacArthur as commander. The British and Dutch likewise put a lock on Japanese assets.
All this potentially cut off Japan’s access to oil, 75 percent of which was imported from the U.S. (In 1940, the U.S. accounted for more than 60 percent of global oil output.) “Potentially,” however, because Roosevelt didn’t want a full cutoff. At a Cabinet meeting before the decision was announced, he explained that Japan would still be able to apply for licenses, which the U.S. would approve on a case-by-case basis. As Utley put it in his book, Roosevelt wanted “to bring Japan to its senses, not its knees.”
The fuse is lit
Then Dean Acheson, who would later rise to secretary of state, got involved. A hard-liner in Morgenthau’s camp, Acheson was an assistant secretary in the State Department and heading up the joint Treasury-State committee that controlled foreign funds. His bosses had rebuffed his earlier efforts to draft a strict embargo. But after Roosevelt’s announcement, his committee found reason after reason to deny all Japanese requests for licenses, stiff-arming complaints from other departmental divisions about the dangers of doing so. Why Roosevelt and Hull didn’t then step in is a matter of historical conjecture. But the result was clear: a de facto total embargo on commerce with Japan.
Japan had an oil stockpile of some 18 to 24 months of normal consumption, and far less if it were to fuel more military expansion. Its foreign minister cabled its embassy in Washington that “our Empire must immediately take steps to break asunder this ever-strengthening chain of encirclement which is being woven under the guidance and with the participation of England and the U.S., acting like a cunning dragon seemingly asleep.” The momentum within Japan’s government for an invasion of Southeast Asia and accompanying attack on Pearl Harbor accelerated apace.
The idea that Roosevelt tightened the screws on Japan to provoke an attack on the U.S. has been dismissed by most historians, according to Robert Dallek, as “reductionist and unconvincing.” With some flexibility on both sides, peace was still possible. But the sanctions as transmogrified by Acheson put huge pressure on Japanese policymakers, shortening their time horizons and empowering anti-U.S. hard-liners. As Utley wrote, “If a confrontation with Japan could have been put off to the spring of 1942 it might have been avoided indefinitely, because by then American military power would have been much greater and German victory in Europe less certain.” Instead, the sweeping embargo, as a Japanese cable to its Washington embassy in August 1941 noted, gave “antagonists a strong talking point,” which they used to press ahead with their plans.
The U.S. insistence on stiff terms for a resumption of normal trade — resignation from the Tripartite Pact and a military withdrawal from Indochina and China, for starters — didn’t help. Moreover, most U.S. and Japanese policymakers had a remarkably blinkered view of one another and their respective countries. Ironically, one of the few who didn’t was Adm. Isoroku Yamamoto — future planner of the Pearl Harbor attack — whose time in the U.S. (including two years at Harvard) led him to warn against a war that Japan was highly unlikely to win: “Tokyo will be burnt to the ground three times.”
Far more than trade at stake
In confronting latter-day China, Trump isn’t knowingly playing for such world-shattering stakes. He would likely be content with a big trade win, however loosely defined, to tout on the campaign trail. His administration may have cited Huawei’s connections to the Chinese government security apparatus as a severe national security threat, but in Trump’s transactional mindset, it’s likely just another bargaining chip in his unending quest to burnish his reputation and political fortunes.
Yet in a contest for global power and influence, such disputes can take a dangerous turn. Trump’s nationalist rhetoric, zero-sum thinking and willingness to entertain a ban on all Chinese student visas — a toxic reminder of earlier limits on Chinese immigration — empower hard-liners on both sides. Xi is calling for a new “Long March.” Moreover, with hard-line Trump advisers like John Bolton — like Acheson, a mustachioed Yale-educated lawyer with a history of going rogue — the possibility of fatal policy misadventure is all too real.
In his memoirs, Acheson justified his tough stand on sanctions by saying that “no rational Japanese could believe that an attack on us could result in anything but disaster for his country.” Yet that attack happened just months later. As the U.S. and China struggle to find peaceful coexistence, that history is worth remembering.
James Gibney is a Bloomberg writer.