Learning the hard way
China is slow to understand Trump on trade
Sooner or later, China will get it. President Donald Trump last week threatened to impose another round of tariffs on Chinese goods, saying China had not kept promises to buy more U. S. agricultural products or crack down on shipments of illegal opioids. Mr. Trump also accused China of manipulating its currency to gain leverage in the countries’ trade war.
China denied the allegations, of course.
But Beijing’s long record of duplicity created this mess in the first place: It has dumped steel and other subsidized goods in U. S. markets, created unfair barriers for U. S. companies seeking to do business in China and tried to force companies that do operate there to turn over technology and intellectual property. And that’s on top of computer hacking and other types of espionage that the Chinese military and other statesponsored parties regularly employ to gain an unfair advantage over U. S. competitors.
Mr. Trump levied the first tariffs against China last year and since has expanded them three times, according to the U. S. Chamber of Commerce. China imposed retaliatory tariffs on U. S. products, including soybeans, prompting the federal government to provide a subsidy lifeline to affected farmers.
At a meeting in Japan in June, Mr. Trump and Chinese President Xi Jinping discussed ways to defuse the crisis, with the latter promising to buy more farm goods. The U. S. said China also agreed to take action against illegal opioids shipped to the U. S.. Mr. Xi defaulted on those promises so Mr. Trump last week threatened to impose 10 percent tariffs on
another $ 300 billion in Chinese imports effective Sept. 1.
For evidence of China’s bad faith one need look no further than the continued outflow of synthetic opioids. China maintains rigid control over its economy, deploys surveillance technology against its citizens to a degree unsurpassed perhaps anywhere else in the world and operates a ruthless justice system. It can halt the flow of drugs whenever it wants.
When Mr. Trump says China will pay for the tariffs, he is only partially right. American consumers will pay higher prices for Chinese goods and, as is the case with soybean farmers, retaliatory tariffs take another kind of toll on the U. S. economy. There are certainly potential repercussions for the U. S. economy.
However, China needs access to U. S. markets to keep its mammoth economy humming, so the trade- war stakes for China are high. Eventually, it pays a price, too. Why else would the Chinese have reacted so strongly to the threat of another wave of tariffs taking effect next month?
Mr. Trump has been deliberate, not rash, in the imposition of tariffs. He has used them in a targeted manner and even delayed imposing them to give China the opportunity to alter course. To this point, China hasn’t done so.
Previous administrations waffled on how to handle Beijing’s economic chicanery, so China may have lulled itself into believing it can continue to play games with Washington. But Mr. Trump, who campaigned on fair trade and has made it a centerpiece of his administration, isn’t playing games. One day, China will get the message.