There’s abundant evidence that China is a trade cheater that needs to be disciplined, but a unilateral set of trade sanctions isn’t likely to work.
President Trump was evidently just warming up when he ordered global tariffs on steel, aluminum, solar panels and washing machines in recent weeks. The main event came Thursday, when the president announced plans to impose up to $60 billion in tariffs on China. This time, the president is focused on the right problems: China’s abuse of U. S. companies that do business there, its pursuit of technology developed here, and its support for hackers who steal trade secrets online.
Unfortunately, Trump is once again offering the wrong solution. The tariffs aren’t likely to inflict as much pain on China as they will on U. S. consumers and exporters.
For Trump, China has long represented the worst of the worst among trade cheats. The tariffs announced in previous weeks applied to metals and products from a vast array of countries, but their primary target was Chinese exporters that allegedly sell their goods below cost in defiance of global trade agreements. In the view of top administration officials, those unfair practices have been enormously costly to U. S. companies, causing factories to shut down and thousands of workers to lose their jobs.
It’s hard to see how slapping tariffs on as-yet-identified products will induce China to honor intellectual property rights.
But that’s only part of the story. Even if you accept the administration’s analysis, it is also true that cheap Chinese materials and assembly factories have helped U. S. companies compete and expand globally (see, e.g., Apple). In fact, one study estimates that the tariffs on steel and aluminum would create about 33,000 jobs at metals factories while costing nearly 180,000 in other industries.
Trump’s latest initiative focuses not on Chinese products, but on Chinese behavior — its cavalier attitude toward intellectual property rights and the hostile environment it has created for U. S. companies seeking to operate or invest in China.
