THE TRADE TRAP

When high-minded rhetoric about trade meets dictators, the dictators always win.

The idea that trading with a country ruled by a dictator will lead toward democracy has always been flawed. Döpfner, CEO of the Berlin-based Axel Springer SE, a global media and tech company, notes that there is even a common German phrase for it: “wandel durch handel,” meaning “change through trade.” The main problem with this concept is that it does nothing but embolden the dictator. In this book, the author focuses mostly on China, but he also offers plenty of insight on Russia and how the invasion of Ukraine altered the geopolitical landscape. In fact, it was the willingness of Western companies and governments to continue trading with Russia after the takeover of Crimea that made Putin think that there would be no consequences for further aggression. Döpfner notes that the situation with China was even worse, with American and European companies rushing in when China joined the World Trade Organization, willfully ignoring the long catalog of human rights abuses and Xi Jinping’s authoritarian rule. By the time the real costs were realized, there was a high degree of enmeshment—although in the past few years, some companies have started to withdraw. Dictatorships often use the language of free trade while manipulating the rules for their own benefit, and for this reason, Döpfner argues strongly against the WTO, suggesting a new alliance based on the rule of law, human rights, and sustainability measures. Tariffs would be applied to countries that reject these principles. It’s an intriguing idea, but the details would be tricky. The author punctuates the book with accounts of his meetings with leaders such as Putin, Helmut Kohl, and German foreign minister Annalena Baerbock. He presents a clear-minded, thought-provoking book, and he pulls no punches.

Döpfner issues a sharp warning about the danger of appeasement and charts an alternative path forward.