Guess the Trade War is Back On?

Elizabeth Brotherton-Bunch

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

Hey, remember this from like a week ago?

Way back on May 20, Treasury Secretary Steven Mnuchin went on Fox News Sunday and said that talks between the United States and China led the two countries to put “the trade war on hold.” Although Mnuchin’s rhetoric got a lot of attention, the actual policy behind it was pretty big — Mnuchin had announced that the United States would not issue tariffs on Chinese products.

This, of course, was a huge reversal in everything we’ve heard from Team Trump for well, years. And quite a lot of people called shenanigans, including yours truly.

AAM President Scott Paul even penned an op-ed for a slightly more prestigious venue, making the case that by giving up the tariffs so quickly — and doing so when the Chinese had offered no enforceable commitments in return — Trump squandered “the best chance the United States has had in years to remake the bilateral trade relationship with China.”

Flash forward this morning, when President Trump made an announcement that provides the perfect opportunity to embed this clip.

O.K., let’s get serious. No more jokes. Back to business.

On Tuesday, Trump announced that the United States will, in fact, impose a 25 percent tariff on $50 billion worth of goods from China that contain “industrially significant technology, including those related to the ‘Made in China 2025’ program.”

The Trump administration also will “implement specific investment restrictions and enhanced export controls” on Chinese investment in U.S. high-tech industries, along with continuing to pursue litigation at the World Trade Organization on China’s “discriminatory practices” when it comes to intellectual property.

The news came as a bit of a surprise, considering the big deal that Mnuchin made about not implementing tariffs just nine days ago. But it’s actually fairly in line with what U.S. Trade Representative Robert Lighthizer unveiled in March in response to China’s rampant, unchecked intellectual property theft.

And look, that’s what is at the heart of this whole debate. For years, China has stolen trade secrets and intellectual property from U.S. companies and gotten away with it. As a result, many American companies now find themselves competing against a cheaper version of the products that they spent years developing and perfecting.

This not only costs millions of American jobs, but hundreds of billions of dollars for American businesses every single year.

The trade war was never going to be “on hold” — the United States had just appeared to give up the fight. And while tariffs should always be used as a last resort, Beijing’s unwillingness to act to stop IP theft — and its history of broken promises in other key trade areas — mean that tariffs are the best leverage we have in making actual progress in this battle. It's good news that Trump has decided to stick to the original plan after all.

Now, about Trump's bizarre decision to rescue ZTE...


Reposted from AAM

Posted In: Allied Approaches, From Alliance for American Manufacturing

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Sam Pizzigati Editor, Too Much online magazine

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