China’s Communist rulers have no one to blame but themselves for the reported breakdown in trade talks with the Trump administration.
Remember last December, when President Trump met with Chinese leader Xi Jinping in Buenos Aires to talk trade? Xi looked Trump in the eye and promised to stop cheating. Not once, but 140 times.
That was the number of items on the long list of trade complaints that US Trade Representative Robert Lighthizer had submitted to Beijing months before. High on the list was the theft of intellectual property, accomplished through relentless cyber attacks against military and civilian targets and the theft of intellectual property by visiting Chinese scholars.
The tariff and non-tariff barriers that kept American products and services out of the Middle Kingdom took up another whole section, while the endless demands made upon the American companies that were allowed in to China yet another: China had a great game going. It forced US companies to partner with a Chinese-owned company, which then, after squeezing the Americans dry of their technology, squeezed them right back out of China.
Then there is the Chinese court system, in which foreigners almost always lose. Why? Because the Communist Party-appointed judges have been ordered to discriminate in favor of their own citizens.
We didn’t have just one beef with China. We had a whole herd.
Taking Xi’s promises in Buenos Aires at face value, Trump’s advisers urged the president to push back his plan to raise tariffs.
So the president held off raising tariffs on Chinese-made goods to 25 percent on March 1, as he had promised. The hope was that China, after decades of cheating on trade in every way imaginable, would finally agree to play by the rules.
Months of negotiations followed. The list of 140 items grew shorter as issue after issue was successfully negotiated. According to White House economic adviser Larry Kudlow, the draft agreement grew to a respectable 150 pages.
Still, critical issues were missing. How soon would China be required to fulfill its promise to import more US goods? How would the agreement be evaluated and enforced? And most critically, what sort of recourse would Washington have if it turned out that Beijing was still cheating?
And then, on Friday, China attempted to rewrite a whole host of provisions it had previously agreed to. Trump’s team, seeing the hard-won gains of five months of nonstop negotiations slipping away, had had enough. White House advisers went to Trump and told him the bad news.
That’s why Trump on Sunday morning tweeted out a warning: “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!”
If Xi thought he could keep Trump happy with an occasional photo op, buy time with empty promises of better behavior or negotiate until a more pliable president took office, he woke up this past Sunday to a different reality.
Beijing’s backpedaling proved too much even for Sen. Chuck Schumer who in a rare show of bipartisan unity urged the president to “hang tough on trade. Don’t back down. Strength is the only way to win with China.”
Most people in Washington now understand that there are bigger issues at play here than simply tariffs. The US and China are locked in a competition to decide which country will dominate the 21st century.
What will happen if we actually increase the tariffs on all $575 billion of Chinese imports to the US to 25 percent? The American economy, followed by much of the rest of the world, will begin to disengage from China’s economy.
Companies will flee China for other countries — including our own — where it is cheaper to conduct business. Not only will American manufacturing continue its renaissance, our allies in the Asia-Pacific region, such as the Philippines, South Korea, Taiwan and India, will also benefit.
Yes, the American consumer will bear some of the cost of tariffs on Chinese goods. But China’s pain will be far more acute. What better way to confront what Vice President Mike Pence recently called China’s “empire and aggression” than by weakening its economy? Conversely, how long should Washington be expected to tolerate Chinese trade cheating and misconduct?
Unless China stops cheating, no deal may be the best deal of all. Trump understands this.
Steven Mosher is president of the Population Research Institute and the author of “Bully of Asia: Why China’s Dream Is the New Threat to World Order.”