Trump’s pro-American trade policy is just what he promised
It is hard to understand the public meltdown over Donald Trump’s promised tariffs on nations that cheat on trade agreements. This is exactly what he promised during the campaign.
When Trump accepted the Republican nomination for president in Cleveland on July 21, 2016,he said, “No longer will we enter into these massive deals, with many countries, that are thousands of pages long – and which no one from our country even reads or understands. We are going to enforce all trade violations, including through the use of taxes and tariffs, against any country that cheats.” Tariffs were directly referenced by Republican nominee Trump as a way to punish nations that cheat.
Trump went on to point out that China was one of the chief violators of unfair trade practices. Trumpsaid, “This includes stopping China’s outrageous theft of intellectual property, along with their illegal product dumping, and their devastating currency manipulation. Our horrible trade agreements with China and many others, will be totally renegotiated.” It is not disputed that China is a terrible nation when it comes to trade fairness.
Derek Scissors of the American Enterprise Institute (AEI) has pointed out the structural economic problems in China that have led to cheating on a massive scale. Scissors wrote in a November piece titled, “How China Cheats,” that the communist nation can “grant free land, free energy, and repayment-optional bank loans” that makes China the “undisputed leader in being able to subsidize.”
Senate GOP considers legislation to limit Trump’s ability to impose tariffs https://t.co/IqpDDSAGLbpic.twitter.com/iQwu5qwVbz
— The Hill (@thehill) March 7, 2018
According to Scissors, if the Chinese government overshoots on expected domestic demand for goods, they dump the products on the world market in a way that depresses prices and hurts American producers of the same goods. Subsidizing and dumping are reasons enough to sanction the government-run Chinese companies selling goods in the United States, yet that is only the tip of the iceberg.
There are two more reasons to hit cheating China with some heavy sanctions. Scissorsargues that “China is also the world’s undisputed leader instealing technology, usually through cyber means and often from the US. China overproduces manufactured goods and progressively marches up the technology ladder,speeding up the processby stealing as needed.” Stealing intellectual property is a high crime when it comes to trade policy. How could any member of Congress defend China from tariffs, when it is guilty of stealing intellectual property from American companies?
China is also protectionist and keeps the home markets closed by heavily subsidizing Chinese companies to make sure they never lose to American companies. From top to bottom, China’s economic policies are the textbook definition of cheating. President TrumpDonald John TrumpAccuser says Trump should be afraid of the truthWoman behind pro-Trump Facebook page denies being influenced by RussiansShulkin says he has White House approval to root out ‘subversion’ at VAMORE is being consistent with his promises to the American people during the campaign to punish trade violations by China.
Mnuchin says Trump tariffs won’t apply to Mexico and Canada if NAFTA is successfully updated https://t.co/VPdOV7xi5Wpic.twitter.com/u51MJmzJhB
— The Hill (@thehill) March 6, 2018
Some Republicans are so blinded by the idea of “free trade” that they would do nothing about China’s subsidizing, dumping, stealing and protectionism. They believe that because consumers, and corporate users of Chinese steel, benefit by low prices, this is good economics. The problem is that Chinese economic policy is driving American companies out of business, shifting jobs to Asia and hurting the American economy. In the long run, China will be able to drive out competition, then raise prices on American consumers.
One other important reason for trade sanctions against China on steel policy is national security concerns. Tim Timken, CEO of Timken Steel, was quoted onCNBC as saying, “If the U.S. were to give up on steel, the country would be wholly dependent on foreign sources, which could threaten national security.” China is a strategic threat to the United States and if we rely on them for steel, then we will not be able to produce steel if we are ever in conflict with China. It makes zero strategic sense to let the United States become dependent on a strategic opponent for the steel that makes many of our weapons of war.
While many act as if Trump’s actions will start a massive trade war that will destroy the United States and the world economy, they ignore the fact that doing nothing to punish unfair trade will hurt the world economy. Threatening a trade war will put pressure on China to stop cheating and it will end up leading to free markets and lower trade barriers for American goods.
Promise-keeper President Donald Trump will make the American economy great again by punishing cheating China on trade.
Corey R. Lewandowski served as a campaign manager to Donald J. Trump, the 45th president of the United States. He is chief strategist ofAmerica First Policies and co-author of “Let Trump Be Trump: The Inside Story of his Rise to the Presidency.” Follow him on Twitter@CLewandowski_.
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