November 15, 2018

What is the end game with China?

By Peter Harrell

As President Trump prepares to meet with Chinese President Xi Jinping later this month, there is intense speculation about whether the two leaders will strike a deal over the tariffs imposed on $250 billion of Chinese goods. The internal divisions on the issue within the White House spilled into public this week, with trade adviser Peter Navarro publicly attacking American financiers for lobbying on trade and economic adviser Larry Kudlow calling those remarks “way off” base.

But the focus on the tariffs ignores emerging key parts of the White House strategy to pressure Beijing. These are the targeted tools that are quietly ratcheting up pressure against the efforts by China to acquire cutting edge American technology. Even if Trump and Xi strike a deal on the tariffs, Trump can deploy these new tools to keep up pressure on intellectual property theft and other illicit efforts to acquire American technology. More importantly, the internal dispute highlights the need for Trump to finally articulate the goals of his trade war, which remain strikingly unclear a year into the most significant United States trade dispute in three decades.

The first new tool in the arsenal has been a drastic increase in prosecutions of Chinese spies and hackers. Since the beginning of October, the Justice Department has brought at least three sets of charges against Chinese intellectual property theft and extradited one of the spies from Belgium to face trial in Ohio. This represents a major new law enforcement focus on Chinese economic espionage.

Read the full article in The Hill.

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