Why Trump’s tariffs won’t help the U.S. technology industry

President Trump needs to change his strategy if the U.S. tech industry is going to continue its global dominance.

Tariffs — or even threats of tariffs — aren’t the answer.

Protecting patents and intellectual property are important. But by focusing on tariffs, the president continues to demonstrate a lack of understanding of the basic fundamentals that made Silicon Valley the innovation capital of the world. Namely investments in human capital and a culture of innovation.

That means taking steps to open markets abroad, not close them. It means an immigration policy that encourages the brightest minds around the world to view the United States as the place where they and their innovative ideas will be welcomed and supported. It means greater investments in education aimed at producing the entrepreneurs of tomorrow who will build the businesses that employ our workforce.

The president on Tuesday said he would proceed with his plan to impose tariffs on $50 billion in Chinese imports and place limits on Chinese investment in the U.S. tech industry. Trump wants to use the tariffs as leverage to pressure China to halt its unfair trade practices.

It’s a worthy goal, but a reckless approach.

Should China call Trump’s bluff, it risks a trade war that could have devastating impacts on the global economy. Trump continues to ignore the fact that it was U.S. protectionist policies in 1930 that threw the nation into the Great Depression.

It was the fear of an uncontrollable trade war that led to the creation of the World Trade Organization’s process for set- tling these kinds of disputes. This is where Trump should make his case, rather than substantially undermining the WTO’s role in keeping the peace in global commerce.

The fact that China is a bad actor is widely recognized. The independent, bipartisan Commission on the Theft of American Intellectual Property in March called China the “principal IP infringer” in the world. The commission estimates that the annual cost to the U.S. economy fromthe loss of intellectual property ranges from $225 billion to $600 billion.

Our global allies would be happy to help the United States make its case and join in pressuring the WTO to impose appropriate sanctions. But these are the same allies Trump is alienating by imposing tariffs.

Rep. Ro Khanna, D-Fremont, points out another significant problem with Trump’s strategy. Imposing tariffs on China will build a symbolic wall between the two countries. China has a long history as an insular nation. Closing down a major marketplace for U.S. technology companies will ultimately weaken our economy and remove one of the best tools available to export American democratic values.

China is investing billions in its Made in China 2025 strategy to match or surpass a U.S. innovation economy, which in 2018 is expected to generate $350 billion in revenues — roughly 8 percent of the U.S. economy — and employ more than 7 million workers.

The best way for Trump to maintain U.S. leadership in the tech industry over China isn’t by starting a trade war. It’s taking the fundamental steps to ensure the U.S. tech industry’s growth.