Along with businesses and consumers across this country, were breathing a sigh of relief that the United States and China have declared a 90-day cease-fire in an ongoing trade war.
Its no secret we havent been happy with President Donald Trumps tariff-happy trade policies since he took office. Whether its adding levies to imported goods, threats to bolt NAFTA or insulting our allies, we still cant say whether Trump is engaging in some grand strategy or just throwing stuff at the wall, hoping something sticks. We are increasingly inclined to think its the throw-and-stick plan.
But we are still praying it could be the former or at the very least that we will get lucky and it will look like the former when all is said and done. In any event, its not as if Trump is the first president to bang his head against the great wall of Chinese trade policy and come away with nothing but a headache to show for it.
Indeed, give the president some share of credit for making the gross behavior of our Chinese trade partner serious consideration for Americans.
The problems are more than serious. China has long imported our goods, then watched as American intellectual property was, shall we say, appropriated through a process that requires foreign firms to hand over intellectual property in order to do business in the country. Additionally, China is still considered a developing nation by the World Trade Organization a status it received nearly two decades ago when it joined the WTO, and China was nothing like the economic power it has become. As a result, China can take on fewer commitments than developed nations despite the fact that Chinas economy has ballooned to one of the largest in the world.
Trump is right to raise these legitimate issues. Hes right to get Americans worked up over them. Unfortunately, hes wrong on the solutions, with policies that wont get us anywhere closer to solving these troubles. The presidents economically facile obsession with trade balances continues to lead him to think imposing tariffs is the magic elixir that will ultimately get China to fold or, at the least, offer concessions.
Instead, China continues to sign trade agreements with other nations while American companies, farmers and consumers feel the brunt of the tariff pain. Should the stalemate not last, the 25 percent tariff will kick in on $200 billion of goods, and consumers will find themselves paying higher prices across a wide spectrum of products. American businesses and consumers will suffer.
It didnt have to be this way.
Trump had the opportunity to us his self-celebrated business acumen and the strength of a GOP majority in Congress to leverage his influence with China. Instead, he chose to hastily withdraw from the Trans-Pacific Partnership, a 12-nation trade agreement that would have allowed the United States to work with Japan and Singapore in negotiations with China.
We could have also used the power of the WTO against China despite its developing nation status. Finally, aggressive multilateralism with other trading partners, focusing on targeted sanctions against companies and individuals doing business in China, would also have been a way to get the Chinese government to take notice.
Instead, its a stalemate with no indication of how talks will progress. If cooler heads within the Trump administration dont prevail, the sting of the tariffs will take a bigger toll on consumers and business, risking damage to the economy as the real issues with China remain unresolved.
The Dallas Morning News
