Trades and Tweets
It is likely that anyone who has consumed any form of news in the last several months has heard about the U.S.’s trade war with China. It is equally likely that that news contained some mention of how irrational, ineffectual, and harmful this trade policy is. Trump’s tweets on the issue have not exactly inspired confidence that he knows what he’s doing with this policy. But his probable incompetence regarding trade should not be as concerning as many economists, politicians, and media organizations claim it is.
To understand why, it’s important to recognize the differing reasons that Trump and his administration present as to why the trade wars with China are necessary. Trump has focused on the trade deficit—when one country buys more stuff from another country than it sells to it—that the U.S. has with China. Trade deficits are not inherently bad; I have a trade deficit with Chipotle and am much happier for it.
Even if trade deficits were harmful, imposing tariffs—taxes on imports—on Chinese goods in the hopes that Americans will buy less from China is a bad way to close a trade deficit. China has responded to American tariffs by imposing its own tariffs to make its own citizens buy less American stuff. In short, Trump’s tweets outline a policy that makes everything more expensive for everyone in the pursuit of a meaningless goal.
But the people who work for Trump that initiated the policy have a different explanation. Robert Lighthizer, the U.S. Trade Representative, stated that the tariffs’ primary purpose was to pressure the Chinese administration to curb China’s rampant theft of American intellectual property. Intellectual property (IP) is the legal right someone has to something they invent or create; patents, trademarks, and copyrights are all examples of common IP protections. With the meteoric rise of the technology sector, it’s a crucial part of the economy, and its theft directly results in profit losses and layoffs for U.S. firms. Chinese firms and the government that regulates them have been stealing American IP for decades, and the U.S. has mostly let it slide. The rise of the internet has supercharged both the magnitude and frequency of this theft. Chinese firms regularly hack U.S. companies to steal valuable algorithms and even entire product designs, which they then use to produce their own suspiciously similar products for the Chinese market. An extensive study conducted by Lighthizer’s office concluded that Chinese theft of American IP costs America anywhere between $225 and $600 billion per year. The Chinese government has enabled this theft by turning a blind eye, and by actively requiring U.S. companies that do business in China to give up some of their IP.[su_pullquote align=”right”]Chinese theft of American IP costs America anywhere between $225 and $600 billion per year.[/su_pullquote]
In the past eighteen months, China’s government has begun to crack down on IP theft by its companies, but their actions have not been quite enough. The Trump administration’s tariffs are a clear message that the U.S. will no longer tolerate the current magnitude of IP theft that it suffers. Lighthizer and his colleagues recognize that the current trade war is mutually harmful in the short term; that’s the point. But if it were successful, the benefits would outweigh the costs that this relatively brief trade war has imposed on U.S. companies and consumers.
[su_pullquote align=”right”]On many key issues, the administration’s actions have often gone against Trump’s proclamations.[/su_pullquote]These trade wars are an example of a recurring trend during Trump’s presidency: the discrepancy between what he says and what the U.S. government actually does. On many key issues, the administration’s actions have often gone against Trump’s proclamations. Trump makes threats on Twitter what seems like every other day, yet they almost always prove empty. He plays a global version of footsie with Putin, yet the U.S. responded to Russian meddling and crimes by expelling their diplomats and imposing sanctions, often to a more extreme degree than the Obama administration did. As the author of the anonymous NYT op-ed said, there are still “adults in the room.”
We should not want an administration that works actively against the president. That’s treasonous and damaging to the future of our democracy. Instead, we should remember that the overwhelming majority of what the U.S. government does is not executed by President Trump, but rather by people who are generally more rational and competent than he is. Trump is driving a train, not a car. He can do highly unlikely, catastrophic things like crashing into the train stopped in front of his (i.e. using his big nuclear button), but for the most part he is limited by the rails of bureaucracy, checks and balances, and by the fact that he can’t be everywhere at once. There’s a limit to how much he can swerve this country.
Jon Niewijk ‘21 studies in the College of Arts & Sciences. He can be reached at jniewijk@wustl.edu.