We are seeing a lot of harrumphing hullabaloo from the mainstream media about our “trade war” with China. Stock market investors are also dancing the tariff tune, propelling stocks to and fro. China and the U.S. last year launched the opening salvos for a trade battle between the globe’s two largest economies, and the salvos have increased.
What’s it all about? Time to get the pros and cons of this issue slotted into proper perspective.
It’s not news that countries get into tussles all the time over trade. But the “China problem” is special due to its size and importance.
Let’s re-visit recent history: For the last 30 years, China has been manhandling the U.S. on trade, running rampant over the U.S. economy. The imbalance of America pumping trade dollars overseas to countries like China has created huge trade deficits and contributed to the U.S. national debt. It has reached the point where China, not Russia, is the most significant threat to the U.S., long-term. China’s economic espionage activities, intellectual property theft, and currency manipulation are severe, as they try to replace America as the world’s superpower. Also, China cheats. They ignore patents. Their activities employ illegal, illicit efforts to exploit all routes to power. This includes counterfeiting and stealing America’s military and technological secrets; the FBI has “economic espionage investigations in all 50 states that trace back to Chinese activity”. We have been taken advantage of, because China rarely plays by fair trade rules.
Almost all the media reporting to date has focused on the negative aspects of a trade “war” with China, with little or no mention of the potential benefits. Even if benefits don’t exceed the costs, there are times when taking a stand (i.e. fair trade, reciprocity, punishing agreement violators) make the endeavor just and worthwhile. This is especially so because China is trying to muscle the U.S. out of the lead as the dominant world power.
This trade issue has been going on for well over 3 decades and it has been lopsided against America. Previous U.S. administrations and Congresses have “looked the other way” while we were already in a trade war but not defending ourselves. China has been ripping off the U.S. by erecting a big tariff barrier to stop America from trying to sell goods into their country. No matter which route we take, there is danger ahead. Time to try something different, time to draw a line in the sand, and this is what Donald Trump is doing.
It may be daring for Trump to stand up to China, but it would be worse if Trump did nothing. America has the most to gain by taking a firmer stance. China exports $500B/year to the U.S., the US exports $150B to China— who would tariffs hurt more? The answer is obvious. Trump wants trade between the two countries. But the term “free trade” is deceiving when the deal is good for the other country and not good for America. China already reneged on its commitments made in earlier negotiations with Trump, now the president is making them pay a price for defaulting on their promises. Since China’s tariffs are significantly higher than ours right now, time to tax them by the same amount. Further, tariffs placed on China help U.S. GDP, as we saw in the 1st quarter of 2019.
Trump is legitimately leveling the playing field and his America First doctrine is kicking China’s butt. The president knows that if you are going to take on The Sleeping Dragon, you must do it from a position of strength. And we are stronger than the Chinese. The mainstream media says the president is wrong, but the mood of most of America is to support his trade battle. Jim Cramer of CNBC agrees, stating “I think that there are a lot of people (who say), ‘Thank you for standing up for us’ ”. Cramer adds, “Many Americans support President Trump’s trade war with China, but…their voices are being drowned out”.
The time is right for Trump to engage China on trade. When Trump is taking heavy flak, that means he’s over the target!
Op-ed views and opinions expressed are solely those of the author and do not necessarily represent the views of BizPac Review.
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