A new report from the administration is a laundry list of complaints about Chinese efforts to support favored industries — but not a strategy for America to foster its own, economists say.
WASHINGTON — Behind the White House’s plan to punish China with tariffs and other restrictions is a growing concern that Beijing is using industrial policy to dominate industries of the future, at the expense of the United States and other nations.
On Thursday, the Trump administration laid out its case in a 35-page report entitled “How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World.” It exhaustively details the steps Chinese officials take to protect and promote their domestic industries and disadvantage foreign competitors, including the use of government subsidies, cyberespionage and forced intellectual property transfers to Chinese companies from American and other foreign firms.
The United States is trying to derail China’s dominance by punishing Beijing. But it has yet to detail how it plans to build America’s dominance in industries that will power economic and job growth in the future, or cultivate what the administration officials call the “crown jewels of American technology and intellectual property.”
Speaking with reporters on Tuesday, a senior administration official said Mr. Trump’s tariffs are designed to benefit American high-tech industries from the sort of “predation” China has used in the past.
Many economists say those steps are insufficient — and possibly counterproductive — to position American companies to compete in emerging, high-tech, globalized industries. They say the administration needs a proactive strategy to bolster American innovation and technology. That includes investing in federal research and development spending, worker skills and attracting more high-caliber foreign students to American graduate programs and fostering advanced industries such as biodefense and artificial intelligence.
Whether industries such as semiconductors thrive going forward in the United States “will depend not on America’s success in curbing China’s progress, but rather on its ability to sustain and support innovation by U. S. companies,” Laura D’Andrea Tyson, a former top economic adviser to President Bill Clinton, wrote this week.
Instead of targeting innovation, the administration’s policy efforts to date have focused largely on supporting legacy industries such as coal mining and steel production, which have shed hundreds of thousands of jobs in recent decades, and which few economists expect to generate significant job growth in the years to come.
China, meanwhile, targets support to companies that demonstrate a winning strategy for growth. The government forces subsidized and protected firms to compete on the global marketplace, shutting down those that are unable to perform, said Ann Harrison, an economist who specializes in industrial policy at the University of Pennsylvania’s Wharton School.
