If we are to have a « trade war » with China, it would be best to win it. We should be better off after the fighting. Unfortunately, the chances of this happening seem slim to none, because President Trump’s plan of attack suggests that everyone — us and them —
If we are to have a « trade war » with China, it would be best to win it. We should be better off after the fighting. Unfortunately, the chances of this happening seem slim to none, because President Trump’s plan of attack suggests that everyone — us and them — will lose.
Interestingly, there’s broad agreement over some of our war goals. Here’s economist Peter Navarro, director of the White House Trade Council, writing in The Wall Street Journal:
« The Chinese government… [has] audacious plans to dominate emerging technology industries. Many of these targeted sectors, such as artificial intelligence and robotics, have clear implications for defense. China seeks to achieve its goal of economic and military domination in part by acquiring the best American technology and intellectual property. »
Hardly anyone doubts that China is on the hunt for advanced technologies by « legal means if possible, and illegal means, if necessary, » as Michael Wessel of the U. S.-China Economic and Security Review Commission, a congressional watchdog agency, recently said.
In his Wall Street Journal piece, Navarro argued that « Trump’s new tariffs will provide a critical shield against this aggression. »
He’s wrong. Indeed, focusing on reducing the U. S. trade deficit — more than $500 billion in 2017 — will make it much harder to impede China’s ability to acquire advanced technologies on favorable terms.
As Brookings Institution economist David Dollar points out, the United States cannot accomplish this policing alone. Frustrated by U. S. technological restrictions, China could turn to other advanced countries — Japan, Germany, Canada, South Korea, France — for similar technologies. We do not hold a monopoly on advanced technologies. To be effective, we need a global coalition that will cooperate in curbing abuses.
