March 31, 2018
This Is How Trump Can Successfully Navigate the China Trade Trap
Foreign-policy experts and America’s allies have roundly criticized President Trump’s new tariffs and investment restrictions as a potential opening salvo in a global trade war. But at least rhetorically, the Trump administration argues that its goal is not simply to protect American industries from foreign competition. Rather, the Trump administration argues that it wants to use the tariffs and investment restrictions as part of a strategy to finally pry open China to U.S. business.
The Trump administration is correct about the need for a tougher approach to China’s unfair trade practices. Despite a handful of positive macroeconomic reforms, under President Xi Jinping the general trend has been to increase the Chinese state’s role business. For example, over the past year China has pressed U.S. and European businesses operating joint ventures in China to give the Chinese Communist Party cells a formal role in corporate decisionmaking, which could turn companies into agents of Chinese policy. China’s “Made in China 2025” national development strategy, meanwhile, is combining billions of dollars in subsidies, favorable regulations, restrictions on foreign access to the Chinese market, and other policies to promote the explicit goal of Chinese companies dominating ten global industries, including information technology, energy-efficient vehicles, and aviation, by 2025. U.S. Trade Representative Robert Lighthizer last week issued a report finding that Chinese requirements forcing U.S. firms to transfer technology to China and outright theft cost the United States billions of dollars a year.
Read the full op-ed on National Interest.
More from CNAS
-
Red Lines and Supply Chains: Trump’s Approach to Trade and Security
The Trump administration is increasingly linking trade policy to national security. Join Emily Kilcrease, senior fellow and director of the Energy, Economics, and Security Pro...
By Emily Kilcrease
-
Ziemba: Struck By Energy Deal Between India & Saudi Arabia
Saudi Arabia and India have agreed to deepen energy ties and cooperate more closely on tourism and technology as the countries seek to strengthen relations at a time of turbul...
By Rachel Ziemba
-
What is President Trump’s Economic Plan?
Global financial markets plunged as investors braced themselves for a shock to the flow of international trade. Faced with prolonged market turmoil, within days the US Preside...
By Emily Kilcrease
-
Bloomberg Businessweek: Age of Economic Warfare
Columbia University Senior Research Scholar and adjunct senior fellow at the Center for a New American Security, Edward Fishman on US credibility and how that is affecting its...
By Edward Fishman