Opinion

John R. Smith: China cheats, but Trump levels the playing field

OPINION: John R. Smith

(MANDEL NGAN,NICOLAS ASFOURI/AFP/Getty Images)

“This is a deep clash of cultures,” said the TV Talking Head. He’s referring to the U.S./China trade war. He’s right, but too many Americans don’t understand what’s at stake.

This is a deadly serious contest between one nation that acts in good faith and one that doesn’t. This trade war is not new, it’s been waged for 30 years. China has never lived up to its commitments, since at least 2001. The Sleeping Dragon can’t feed all of its people and needs U.S. food, and yet it engages in unfair trade practices, harming the U.S.

Our country needs a major re-set in nearly all global trade agreements, which have turned into a series of chronic disasters for us. Over the decades the trade deficits have eaten away at our GDP and economic growth.  The 2.9% GDP in 2018 would have been 4% if trade had been neutral and not unbalanced. And the U.S.’s biggest bogeyman is China and its communist dictators.

Global politics is full of scoundrels and liars. This includes the “diplomats” as well as the countries they represent. Most of these emissaries are smug, professional liars in expensive suits. Making it worse, international groups of nations, like the U.N., the World Trade Organization, and the International Court are infamous for coddling violent dictators, human rights violators, and banana republics. But not many nations conduct themselves more egregiously than China.

China has been manhandling America for decades on trade, stealing U.S. technology and intellectual property, patent violations, manipulating their own currency while the incompetent Washington establishment lets them do it–people like Chuck Schumer, a guy who’s been in Congress for 39 years and has done bupkis to stop Chinese thievery, whether his party was in power or not. Or Joe Biden’s financial misdealings benefitting his son.

Enter Donald Trump.

Trump quickly saw that China is “dumping”, paying dirt-cheap wages to Chinese workers and shipping their products to other world countries, including America, at prices that are cheaper than the prices in their domestic markets. This wipes out thousands of jobs in other countries and causes negative trade balances. Trump said “No more”, and launched a new ball game that compels China and other countries to re-negotiate trade prices. Trump imposed tariffs, to force countries to the negotiating table to unwind unfair trade deals.

Trump has already re-negotiated trade agreements with several nations. This happened after the other countries tried to test Trump over his tariff sanctions, but they learned quickly that the president negotiates by sticking to his guns, not bluffing. The other nations already had tariffs on us, so Trump insisted on two-way tariffs if tariffs must exist at all. Other countries wanted only one-way tariffs, but Trump stopped those lopsided deals and now collects tariff revenues from countries taxing us. For example, as one pundit explained, “Germany charges us a 10% tariff to sell American cars in Germany but Germany pays only 2.5% to sell cars to us.” Trump ended that kind of unfair imbalance by creating fairer playing fields for America.

China, not Russia, is the most significant longer-term threat to the U.S.  China wants to position itself as the sole dominant superpower, the global hegemon. It seeks to replace America in that role. As such, China is the real long-term enemy of this country.

Our country’s Trump-haters are complaining that the tariffs are only hurting America’s consumers and companies; they say China will increase its prices to us, to pay the tariffs.

Not so fast. That isn’t playing out across the board.

Owners of many American businesses are simply refusing to pay 10% to 25% more for China’s tariffs on its products. Instead, American companies demand that Chinese factories lower their prices, or American businesses will find other factories or another country to buy from. In China, “shipping quotas are more important than profitability” and the factories MUST maintain output levels (remember, it’s a communist country). This threat by American companies to yank their orders heaps huge pressures on Chinese manufacturers, so the Chinese are lowering prices left and right. Our tariffs are working. Meanwhile, the U.S. Treasury has collected $63 billion in tariffs from other countries, during the last year!

Op-ed views and opinions expressed are solely those of the author and do not necessarily represent the views of BizPac Review.

John R. Smith

John R. Smith is chairman of BIZPAC, the Business Political Action Committee of Palm Beach County, and owner of a financial services company. He is a frequent columnist for BizPac Review.
John R. Smith

Comments

Latest Articles