Is the United States About to Engage in Official State Piracy Against China? Strong Precedent Points to Worrying Trend

April 18, 2020

by A. B. Abrams for The Saker Blog

The Coronavirus crisis appears set to herald a new era of much poorer relations between China and the Western world, with Western countries having borne the brunt of the fallout from the pandemic and, particularly in the United States, increasingly blaming China at an official level for the effects.^[1] Looking at the U.S. case in particular, at first responses to the virus were if anything optimistic – the fallout in China was seen as a ‘correction’ which would shift the balance of global economic power back into Western hands. Indeed, U.S. Commerce Secretary Wilbur Ross stated on January 30^th that the fallout from the virus in China “will help to accelerate the return of jobs to North America” with millions at the time placed under lockdown in Wuhan and elsewhere.^[2] Western publications from the New York Times to the Guardian widely hailed the virus as potentially bringing an end to China’s decades of rapid economic growth – with a ‘rebalancing’ of the global economy towards Western power strongly implied.^[3],[4] Against North Korea, the New York Times described the virus as potentially functioning as America’s “most effective ally” in achieving the outcome Washington had long sought – “choking the North’s economy.” ^[5]

The result, however, has if anything been strong resilience to the virus across much of East Asia, with Vietnam and South Korea being prime examples of successful handling alongside Macao, Hong Kong, Taiwan and the Chinese mainland – in contrast to a very sluggish and often ineffective response in the West.^[6] From rot filled and broken emergency supplies in the U.S. national reserve^[7] to nurses wearing bin bags due a lack of protective equipment,^[8] the commandeering of supplies heading to other countries, ^[9] and the enlistment of prison labour to build mass graves in New York City^[10] – signs have unanimously pointed to chaos. It should be pointed out that the U.S. reported its first case on the same day as South Korea – which had the virus fully under control several weeks earlier due to more effective handling and a lack of complacency.^[11] The U.S. and wider Western world had a major advantage in its warning time over China in particular, but effectively squandered it.^[12]

The results of the fallout from the Coronavirus in the Western world, and in the U.S. in particular, could be extremely serious given the context of escalating American pressure on China in the leadup to the outbreak. Blaming China for the virus across American press and in the White House itself – despite it having reached America primarily from Europe rather than Asia^[13] – has heralded mass hate crimes against the Asian American community of unprecedented seriousness and scale since the targeting of Japanese-Americans in the 1940s.^[14] Perhaps even more seriously, however, the official American response as public opinion is directed against China appears set to place the world’s two largest economies on a potentially catastrophic collision course. On April 14th U.S. Senator Josh Hawley unveiled highly provocative legislation which would strip China of its sovereign immunity in American courts and allow Americans to sue China’s ruling Communist Party directly for the damages caused by the coronavirus crisis.^[15] Such legislation relies heavily on growing anti-Chinese sentiments and depictions of China as directly responsible – and contradicts evidence from the World Health Organisation among others that China’s response effectively stalled the global spread of the virus at its own expense with its lockdown.^[16]

An unbiased analysts shows that the disproportionate fallout in the Western world relative to East Asia is overwhelmingly due to poor preparation – and had effective South Korean style measures been implemented from the outset America would have seen only a small fraction of the cases it currently suffers from.^[17] Nevertheless, calls from the U.S. and to a lesser extent from within other Western states^[18] to make China foot the bill are manifold. Scholars from the American Enterprise Institute and Stanford University’s Hoover Institution among others have made direct calls for Western states to unilaterally “seize the assets of Chinese state-owned companies,” cancel debts to China and expropriate Chinese overseas assets “in compensation for coronavirus losses.”^[19] The Florida based firm the Berman Law Group has already filed two major lawsuits suing China calling for compensation for the outbreak – and the situation looks set to worsen considerably with many more suits to follow. Regarding how the crisis could play out, and how the U.S. could act on its massive claims against China over the virus which are expected to be in the hundreds of billions at least, there is an important precedent for American courts providing similar compensation to alleged victims of an East Asian government and the American state taking action accordingly – that of the Otto Warmbier case in 2018. Assessment of the Warmbier case sets a very important precedent with very considerable implications for the outcome of a Sino-American dispute.

Otto Warmbier was an American student arrested in North Korea in 2016 for stealing a poster and violating a restricted high security area in Pyongyang. The student was returned to the U.S. the following year in a comatose state, with his parents alleging that his teeth had been artificially rearranged and his body showed signs of torture. This was strongly contradicted by medical analyses, with the Hamilton County Coroner’s Office carrying out an external examination of Warmbier’s body and dismissing the claim by his father that his teeth had been pulled out and rearranged by the North Koreans. “The teeth are natural and in good repair,” the office concluded, after Warmbier’s father had sensationally claimed that “his bottom teeth look like they [the Koreans] had taken a pair of pliers and rearranged them.” Coroner Dr. Lakshmi Kode Sammarco stated addressing the claim of forced rearranging of Otto’s teeth: ”I felt very comfortable that there wasn’t any evidence of trauma. We were surprised at the [parents’] statement.” She said her team, which included a forensic dentist, thoroughly evaluated the body and assessed various scans of his body.^[20] Medical assessments showed no signs of mistreatment or any trauma to the student’s head or skull, with a blood clot, pneumonia, sepsis, kidney failure, and sleeping pills were also cited as potential causes of death.^[21] Nevertheless, Warmbier’s parents would continue to claim against all available evidence that their son had been tortured to death – filing a lawsuit against the North Korean government. Where a full autopsy could have provided data to more completely undermine their claims, and was strongly recommended by doctors, they were adamant in their refusal and no autopsy was carried out. Forensic scientists were highly critical of this unusual and unexpected decision in this critical case.^[22]

In response to the Warmbers’ claim against the North Korean state, which amounted to a staggering $1.05 billion in punitive damages and around $46 million for the family’s suffering in a motion filed in U.S. District Court in Washington in October 2018, Pyongyang was asked to pay the couple $500 million.^[23] This was despite no evidence for the couple’s claims of Korean culpability, but at a time when public opinion was strongly against North Korea and would have supported the motion. To seize the Warmbiers’ compensation, the United States Navy would later that year commandeer a North Korean cargo ship, the Wise Honest, and escort it to American territory where it was subsequently sold at auction. The couple was provided with a part of the ship’s value, and future seizures of Korean merchant shipping to meet the remainder of the American family’s claim remain possible under U.S. law.^[24] The seizure of the ship, one of North Korea’s largest, represented a considerable loss to its fleet and complemented the effects of ongoing Western sanctions to undermine the country’s economy.

The significance of the Warmbier case is that it provides a strong precedent for the U.S. Military, should China inevitably refuse to pay the hundreds billions expected to be demanded in compensation, to engage in effective state level piracy against Chinese merchant shipping to provide funds for its increasingly struggling economy.^[25] With trade war having failed to significantly slow Chinese economic growth and foreign trade, which had been its primary goal,^[26] more drastic means may be adopted for the same end using the Coronavirus crisis as a pretext. Other similar recent cases of do exist, including unilateral seizure and sale of Iranian government owned properties by the Canadian government in 2019 to compensate alleged victims of terror of conflicts with Hezbollah and Hamas. This was despite neither of these being UN recognised terrorist organisations and Iran’s support for these non-state actors being entirely legal under international law.^[27] The fact that these properties were on Canadian soil and governed under Canadian law however, rather than in international waters, makes this a considerably less provocative case than the Warmbier case one or than what is being proposed against China.

Further evidence that the U.S. would consider unilateral commandeering of shipping against China was provided by the U.S. Naval Institute, which in April published an important paper titled ‘Unleash the Privateers’ highlighting that it remained legal under American law for U.S. security firms to be tasked with commandeering and either sinking or capturing and selling Chinese merchant ships in the event of conflict. It highlighted that China was the largest trading nation in the world with a merchant fleet several times the size of its American counterpart – and that this provided a vulnerability the U.S. should be willing to exploit.^[28] Taken together, the circumstances surrounding claims against China and moves to strip it of its sovereign immunity, the Warmbier precedent, the well timed and extremely radical naval institute paper and above all America’s need to reverse its losses and undermine China’s growing trade and economic prosperity to perpetuate its own hegemony, between them point to a high possibility of the U.S. adopting state level piracy against Chinese shipping as a future policy. While evidence strongly contradicts claims that China is responsible for the Coronavirus and the massive fallout the U.S. is now experiencing – much as evidence from American coroners and forensic scientists contradicted the claims of the Warmbier family – these inconvenient facts are highly unlikely to prevent the U.S. from taking action to secure its perceived rightful place as the leader of the global economy by seizing what it sees as its rightful property through attacks on Chinese trading vessels.

It is by no means a certainty that the United States will engage in such an escalatory course of action, and the nature of the overall Western response beyond the current harsh rhetoric and unfounded accusations is yet to be seen. It is important at this stage, however, to highlight the not insignificant possibility such a course will be taken by the U.S. and other Western parties to reverse the trend towards a decline in their economic positions relative to China. Repercussions from such seizures will almost certainly be far more severe than the relatively muted global response to the seizure and sale of a commandeered North Korean ship two years prior. While China’s Navy is concentrated in the Western Pacific and is poorly placed to defend its trade routes from the global reach of Western warships, Beijing and its allies have a wide range of means to retaliate which could deter the Western powers from taking such a course of action.

1. ‘Coronavirus Map: Tracking the Global Outbreak,’ New York Times (accessed April 16, 2020). ↑
2. Staracqualursi, Veronica and Davis, Richard, ‘Commerce secretary says coronavirus will help bring jobs to North America,’ CNN, January 30, 2020. ↑
3. Bradsher, Keith, ‘Coronavirus Could End China’s Decades-Long Economic Growth Streak,’ New York Times, March 16, 2020. ↑
4. Davidson, Helen, ‘Coronavirus deals China’s economy a “bigger blow than global financial crisis,”’ The Guardian, March 16, 2020. ↑
5. Koettl, Christoph, ‘Coronavirus Is Idling North Korea’s Ships Achieving What Sanctions Did Not,’ New York Times, March 26, 2020. ↑
6. Graham-Harrison, Emma, ‘Coronavirus: how Asian countries acted while the west dithered,’ The Guardian, March 21, 2020.Inkster, Ian, ‘In the battle against the coronavirus, East Asian societies and cultures have the edge,’ South China Morning Post, April 10, 2020. ↑
7. Chandler, Kim, ‘Some states receive masks with dry rot, broken ventilators,’ Associated Press, April 4, 2020. ↑
8. Glasser, Susan B., ‘How Did the U.S. End Up with Nurses Wearing Garbage Bags?,’ The New Yorker, April 9, 2020. ↑
9. ‘US Seizes Ventilators Destined for Barbados,’ Telesur, April 5, 2020.Willsher, Kim and Holmes, Oliver and. McKernan, Bethan and Tondo, Lorenzo, ‘US hijacking mask shipments in rush for coronavirus protection,’ The Guardian, April 3, 2020.Lister, Tim and Shukla, Sebastian and Bobille, Fanny, ‘Coronavirus sparks a ‘war for masks’ as accusations fly,’ CNN, April 3, 2020. ↑
10. Crane, Emily, ‘Workers in full Hazmat suits bury rows of coffins in Hart Island mass grave as NYC officials confirm coronavirus victims WILL be buried there if their bodies aren’t claimed within two weeks after death toll rises to 4,778,’ Daily Mail, April 9, 2020. ↑
11. ‘Special Report: How Korea trounced U.S. in race to test people for coronavirus,’ Reuters, March 18, 2020.‘Once the biggest outbreak outside of China, South Korean city reports zero new coronavirus cases,’ Reuters, April 10, 2020. ↑
12. Johnson, Ian, ‘China Bought the West Time. The West Squandered It,’ New York Times, March 13, 2020. ↑
13. ‘New York coronavirus outbreak originated in Europe, studies show,’ The Hill, April 9, 2020. ↑
14. De Souza, Alison, ‘Asian Americans tell harrowing stories of abuse amid coronavirus outbreak in the US,’ Straits Times, April 1, 2020.Chapman, Ben, ‘New York City Sees Rise in Coronavirus Hate Crimes Against Asians,’ Wall Street Journal, April 2, 2020. ↑
15. Schultz, Maarisa, ‘Sen Hawley: Let coronavirus victims sue Chinese Communist Party,’ Fox News, April 14, 2020. ↑
16. Wang, Yanan, ‘New virus cases fall; WHO says China bought the world time,’ Associated Press, February 15, 2020.Johnson, Ian, ‘China Bought the West Time. The West Squandered It,’ New York Times, March 13, 2020. ↑
17. ‘Special Report: How Korea trounced U.S. in race to test people for coronavirus,’ Reuters, March 18, 2020.‘Once the biggest outbreak outside of China, South Korean city reports zero new coronavirus cases,’ Reuters, April 10, 2020. ↑
18. Cole, Harry, ‘China owes us £351 billion: Britain should pursue Beijing through international courts for coronavirus compensation, major study claims as 15 top top Tories urge “reset” in UK relations with country,’ Daily Mail, April 5, 2020. ↑
19. Stradner, Ivana and Yoo, John, ‘How to Make China Pay,’ American Enterprise Institute, April 6, 2020. ↑
20. Nedelman, Michael, ‘Coroner found no obvious signs of torture on Otto Warmbier,’ CNN, September 29, 2017. ↑
21. Lockett, Jon, ‘Tragic student Otto Warmbier ‘may have attempted suicide’ in North Korean prison after being sentenced to 15 years for stealing poster,’ The Sun, July 28, 2018.Basu, Zachary, ‘What we’re reading: What happened to Otto Warmbier in North Korea,’ Axios, July 25, 2018.Tingle, Rory, ‘Otto Warmbier’s brain damage that led to his death was caused by a SUICIDE ATTEMPT rather than torture by North Korean prison guards, report claims,’ Daily Mail, July 25, 2018.Fox, Maggie, ’What killed Otto Warmbier?’ NBC News, June 20, 2017.Tinker, Ben, ‘What an autopsy may (or may not) have revealed about Otto Warmbier’s death,’ CNN, June 22, 2017.Nedelman, Michael, ‘Coroner found no obvious signs of torture on Otto Warmbier,’ CNN, September 29, 2017. ↑
22. Tinker, Ben, ‘What an autopsy may (or may not) have revealed about Otto Warmbier’s death,’ CNN, June 22, 2017.Nedelman, Michael, ‘Coroner found no obvious signs of torture on Otto Warmbier,’ CNN, September 29, 2017. ↑
23. Brookbank, Sarah, ‘Family of Otto Warmbier awarded $500 million in lawsuit against North Korea,’ USA Today, December 24, 2018. ↑
24. Lee, Christy, ‘U.S. Marshals to Sell Seized North Korean Cargo Ship,’ VOA, July 27, 2019.‘Seized North Korean cargo ship sold to compensate parents of Otto Warmbier, others,’ Navy Times, October 9, 2019. ↑
25. Blyth, Mark, ‘The U.S. Economy Is Uniquely Vulnerable to the Coronavirus,’ Foreign Affairs, March 30, 2020.Schulze, Elizabeth, ‘The coronavirus recession is unlike any economic downturn in US history,’ CNBC, April 8, 2020.Schwartz, Nelson D., ‘Coronavirus Recession Looms, Its Course “Unrecognizable,”’ New York Times, April 1, 2020.Davies, Rob, ‘Coronavirus means a bad recession – at least – says JP Morgan boss,’ The Guardian, April 6, 2020.Lowrey, Annie, ‘Millennials Don’t Stand a Chance,’ The Atlantic, April 13, 2020. ↑
26. Wei, Liu, ‘Trump’s Trade War on China Is About More Than Trade,’ The Diplomat, July 20, 2018. ↑
27. Bell, Stewart, ‘Iran’s properties in Canada sold, proceeds handed to terror victims,’ Global News, September 12, 2019. ↑
28. Cancian, Mark and Schwartz, Brandon, ‘Unleash the Privateers!,’ U.S. Naval Institute, vol. 146, no. 2, issue 1406, April 2020. ↑

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