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Trump is Right to Confront China

By Phantom On May 22nd, 2019

A U.S. businessman friend of mine who works in China remarked to me recently that Donald Trump is not the American president America deserves, but he sure is the American president China deserves.

Trump’s instinct that America needs to rebalance its trade relationship with Beijing — before China gets too big to compromise — is correct. And it took a human wrecking ball like Trump to get China’s attention. But now that we have it, both countries need to recognize just how pivotal this moment is.

The original U.S.-China opening back in the 1970s defined our restored trade ties, which were limited. When we let China join the World Trade Organization in 2001, it propelled China into a trading powerhouse under rules that still gave China lots of concessions as a developing economy

This new negotiation will define how the U.S. and China relate as economic peers, competing for the same 21st-century industries, at a time when our markets are totally intertwined. So this is no ordinary trade dispute. This is the big one.

Prominent NYT free trade / globalism evangelist Tom Friedman has praised Trump for confronting China for China’s unfair trade practices.

I wonder how Trump will spin a significant endorsement like this. He’s spent the last few years saying that journalists are the ” enemy of the people ” and that the NYT is only in the business of churning out ” fake news ”

Confronting a predatory China on trade (and on Chinese imperialist activity in the South Asian seas ) is good policy. Presidents since Carter have have looked away from what’s been going on, Trump has knocked over the negotiating table.

We’d prosecute this dispute better with the open support of western allies, the same allies that the president has gone well out of his way to alienate.

Still, he is right on this one. Everyone should say so. More power to him in fighting a battle that must be fought.

16 Responses to “Trump is Right to Confront China”

  1. I have a Huawei phone and just heard yesterday that Google and whoever makes the Android operating system won’t be supporting Huawei phones any more, in terms of version updates, patches, new virus scans etc.

  2. Houston, you have a problem. A 90 day reprieve has been granted, but that may be it.

    Google makes Android.

  3. “Confronting a predatory China on trade (and on Chinese imperialist activity in the South Asian seas ) is good policy. Presidents since Carter have have looked away from what’s been going on, Trump has knocked over the negotiating table.”

    As I said the last time this was discussed – confronting China is the right idea. The manner in which Trump is doing so is wrong, and probably counterproductive to the wider goal of confronting China.

    An international coalition, with the WTO, is the way to confront China. A trade war that will a) hurt America more than China and b) hurt America’s needed allies, will prevent that international coalition ever being formed.

    And it is all part of the major problem’s with Trump’s foreign policy. He has no overarching strategy. He flails from issue to issue and governs by tweet. And so his actions need to be judged in their totality. He is picking a fight with China. That isn’t a bad policy in isolation. But he is picking a fight with China, while also economically undermining key allies. He is picking a fight with China, while trying to negotiate with North Korea. He is picking a fight with China, while cutting off aid and support to other countries like Pakistan (effectively pushing them into China’s camp).

  4. Canada / Europe are huge trading partners to the US, and he picked unwise and wrong trade fights with them.

    But I prefer the flawed approach that Trump is taking now to the kicking the can down the road approach that the US and Europe / Japan have been taking over the past 25 years.

    China has been so aggressive economically that there has been some criticism of it in China. China has banned google in China – while google has been effectively been helping Huawei sell its mobile phones. Some Chinese have commented on things like that – that of course the US was going to wake up one day.

    The US / Europe must coexist economically with China, which is now so much apart of world manufacturing. But let’s stop being pushovers.

    Its not 1973 anymore. China isn’t a bullshit developing country. It needs to respect the same rules that we ask the US or Germany to respect.

  5. Hmm. Not sure where I sit. Yes, he is right to address Chinese flouting of trade law. However, he is doing so on the flimsy pretext of “national security”. As this exception to WTO rules is allowed and subjective, he can argue he is right but, in reality, he is fighting breaches of trade law…by breaching trade law.

    The US and the West are better than that.

  6. “But I prefer the flawed approach that Trump is taking now to the kicking the can down the road approach that the US and Europe / Japan have been taking.”

    I’d disagree that is what they were doing. They were building cases in the WTO. China craves WTO membership and has shown a remarkable willingness to implement WTO rulings.

    https://www.cato.org/publications/policy-analysis/disciplining-chinas-trade-practices-wto-how-wto-complaints-can-help

    Of the 27 matters litigated against China, 5 are still pending, 12 were litigated all the way through, and 10 were resolved through some kind of settlement, or not pursued after the measure was modified.

    In all 22 completed cases, with one exception where a complaint was not pursued, China’s response was to take some action to move toward greater market access. This was done either through an autonomous action by China, a settlement agreement, or in response to a panel or appellate ruling.

    The actual extent of Chinese compliance with WTO judgments has been questioned; in some instances it has been seen by some as only “paper compliance.” But there are no cases where China has simply ignored rulings against it, as has happened with some other governments. For example, the United States has not complied with the WTO ruling in the cotton subsidies complaint brought by Brazil, and the European Union (EU) still does not allow hormone-treated beef to be sold there even after losing a complaint brought by Canada and the United States.

    The US took 13 cases against China in the WTO under President Obama. It won (either through judgement or settlement) all 13.

    Potential actions can be taken at the WTO with respects to intellectual property.

    Trump doesn’t want to do this, as it will require negotiation, time, and energy. It will require building international coalitions to either take China through the WTO courts, or to fill in the gaps in WTO rules that China are exploiting.

    Instead Trump is going back to Smoot–Hawley, attacking everyone (not just China). And ultimately if a serious trade war erupts between the US and China it will hurt everyone (not just China, and not just America, but the global economy). And the majority of western nations will, grudgingly, take America’s side on it (because America is more important to their economy than China). But the majority of western nations will resent America for it. America is increasingly internationally isolated under Trump. And that means when America need (and can’t demand) the support of its allies then they may say no.

    And the trade war won’t work. Not least because China will have the ability to absorb the bulk of the damage (due to the more totalitarian nature of their state). And Xi Jinping has built an almost God-like public persona in China. Giving in to an international coalition in the WTO, in a series of arguments and deals that the average person won’t understand, won’t hurt that persona. Giving in to a schoolyard bully will.

  7. Trump attacking everyone including Canada and EU on trade matters was and is clumsy and wrong.

    It can’t be justified.

    And walking out of the Trans Pacific Partnership was stupid. The TPP excludes China and was meant to check them. We should have worked to reform TPP and be part of it.

  8. And I think that is the problem with Trump’s presidency, and certainly his foreign policy. He doesn’t have a larger strategy in mind. It is why evaluating his foreign policy is quite difficult. If he had a larger strategy then we could judge on the impact of that strategy.

    If Chinese containment is the strategy then he is a massive failure. China has continued to flex its new imperialist muscles and has gained footholds in places vacated by the United States under Trump (Pakistan for example).

    In isolation I feel most of Trump’s foreign policy decisions have been mistakes. Collectively they have been worse.

    And for what it is worth I would offer similar criticisms of the Obama foreign policy. It is hard to work out at times what he was doing. Far too often it was reactive (it reacted to this crisis, followed by that crisis) rather than proactive. He did maximise American soft power (diplomacy, international alliances etc…) but that is more a means to an end rather than an end in and of itself. For the most part, and this is also broadly true of his domestic policy, his Presidency was more about trying to fix what he felt were the mistakes of the Bush White House (Iraq, Afghanistan, international reputation etc…). In their place he made a series of other miscalculations that why not as bad as Iraq and Afghanistan had similar, if even greater, impacts on regional stability (Libya, Syria, Yemen being adverts for how not to act).

  9. Trump is confronting China on several issues at once. Perhaps a better approach would be to confront them with one issue at a time and when it is resolved move onto the next issue. The first issue I would suggest is forced tech transfers and intellectual theft. I don’t think any other country thinks such theft is OK. The amount of money China makes and saves by such theft is probably very large. As with the other issues, this should be done by a coalition of countries that do business with China.

  10. As with the other issues, this should be done by a coalition of countries that do business with China.

    If the US, EU and Japan had done that 25 years ago, it would have been a quick discussion.

    Such problems don’t improve with time.

  11. When we let China join the World Trade Organization in 2001, it propelled China into a trading powerhouse under rules that still gave China lots of concessions as a developing economy

    China has ignored WTO rules since the day it was admitted as a member. It is shamelessly mercantilist in that it both controls and subsidises most of its major companies. It provides them with cheap loans and instructs its state-controlled banks to ignore the bad debt provisions which should be made against those loans.

    A few years ago, the Chinese state targeted smartphones as an industry that China should dominate. Since then, it has built up Huawei by every means possible, intellectual theft, subsidies, write-offs and the usual cronyism. It is good to see that state-run “company” gets its comeuppance this week.

    And let’s not get into the question of currency manipulation. The Yuan has increased by 15% against the dollar since (about) 2005, during which time the Chinese economy has grown by over 800%.

  12. I’m sure that Patrick must be a big fan of Congressman Justin Amash. Needless to say, Trump has already lashed back:

    “Here are my principal conclusions,” Amash wrote:

    1. Attorney General Barr has deliberately misrepresented Mueller’s report.
    2. President Trump has engaged in impeachable conduct.
    3. Partisanship has eroded our system of checks and balances.
    4. Few members of Congress have read the report.

    These points – all undeniably true – mark the first time an elected Republican has publicly endorsed impeaching the president for his conduct. Amash wasn’t finished. In a lengthy and damning thread, he detailed his thought process in coming to this bombshell conclusion…”

    https://www.newstatesman.com/world/north-america/2019/05/justin-amash-last-honourable-republican-calls-trump-s-impeachment

  13. If Friedman and the NYTs are complimenting him…… it’s time to worry.

    But those sanctions are working….. gee what a surprise.

  14. Pat, check your inbox pls.

  15. Amash is a RINO from a democrat district

  16. certainly