Everybody wonders what President Trump is doing with these trade tariffs.
The tariffs are hurting workers. The tariffs accelerate inflation.
Well, the tariffs are working.
But here’s what the tariffs and other negotiating tactics with China aren’t doing – getting to the heart of the bigger problem, which is the continued Chinese theft of American intellectual property.
Specifically, the U.S. wants China to stop requiring American firms looking to do business in China to have a Chinese partner and to share our technology with that partner. The policy is forbidden by World Trade Organization rules, which China routinely ignores.
It would also be nice if China would stop using cyber-espionage, which the FBI calls the biggest technological threat to national security, to steal technology and American trade secrets. Estimates say the activity costs us $225-260 billion per year.
China actually agreed to stop stealing our industrial technology in 2015, a deal crafted by then President Obama. But it was a narrow agreement – it referred only to theft by both countries!
The U.S. government has no desire to stop China’s growth, except that stealing technology is wrong. It’s gone on too long. The stolen information is being used against us globally and President Trump wants it stopped. And to their credit, U.S. negotiators are demanding stiff penalties for this Chinese theft.
This trade deal is taking on heightened importance since President Trump didn’t get border wall money.
If he can’t get a China deal done, it could sour the economy.
But if he can, the deal could be the lynchpin of his 2020 re-election campaign.