New Focus on Trade Agreements with China
President Donald Trump has made it clear that his administration’s trade policies will reflect his “America First” campaign.
Last week, it was revealed that China had the largest-ever annual trade surplus with the U.S. in 2017.
So why is the U.S. importing more from China than exporting? Well, for years Chinese companies have been accused of stealing trade secrets from U.S. companies and then making a similar product for much less money.
The U.S. Commerce Department is expected to reveal its findings this week from the probe the department did into China’s intellectual property theft and cyber espionage.
This evidently has influenced the Trump administration to take a stricter stance on the trade agreements with China.
“There’s a lot of consensus around the viewpoint that China does need to be the focal point, because China’s behaviors are causing significant problems for the U.S. economy and for the global trading system,” said a White House economic official to Wall Street Journal.
Trump has threatened to end or at least renegotiate multiple trade agreements, including the North American Free Trade Agreement with Canada and Mexico and the U.S.-South Korea free-trade agreement.
“I’m not going to minimize Nafta and Korus. I do think everyone realizes that even if Nafta and Korus aren’t working as well as they could, they are only part of the broader concerns we have,” said the official to WSJ.
“He (Trump) has also continued to grumble about the trade deficit with China, telling President Xi Jinping recently that “the situation is not sustainable”, according to the White House,” writes Today. “But Mr. Trump has yet to deliver on the tariffs he threatened to introduce during the 2016 campaign, or the unapologetic protectionism outlined in an inaugural address in which he pledged to “protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs.”
Although Trump expressed some harsh criticisms of China in his first year, he also had some productive meetings with the Chinese President Xi Jinping.
“When Mr Trump was in Beijing, he touted his “great chemistry” with Mr. Xi, and told the media that instead of blaming China for the imbalanced bilateral trade relationship, he gave China “great credit” for effectively taking advantage of another country for the benefit of its citizens. Mr. Trump has also tweeted that their conversations on both trade and North Korea were “very productive”. Chinese media reported that both leaders hailed the great progress achieved in the bilateral relationship and agreed to further enhance cooperation,” writes The Straits Times.
Trump has played nice in hopes that China would assist with the North Korea nuclear missile problem.
“I have been soft on China because the only thing more important to me than trade is war,” said Trump to The New York Times last month. “If they’re helping me with North Korea, I can look at trade a little bit differently, at least for a period of time.”
China hasn’t applied enough pressure according to Trump, meaning it’s time for the U.S. to reevaluate its trade policies with the Communist country.
The Trump Administration has said that it’s making trade policy a priority this year, especially pertaining to China.
“You do see a theme in some of the upcoming decisions the president has to make,” said the official to WSJ. “You have Chinese industrial policy at its core.”
The administration has discussed introducing harsher penalties on Chinese imports, like aluminum, steel, and solar equipment. But, this could ignite a trade war. China imports a large supply of U.S. soybeans, which could change in response to penalties.
However, China does seem fairly open to renegotiating trade policies.
Hua Chunying, the Chinese Foreign Ministry spokeswoman, said that “a large number of facts prove that the economic relations and trade between China and the United States are mutually beneficial…. We are willing to make concerted efforts with the United States to stay committed to building the robust, steady and sound economic relations.”
It also looks like lawmakers are more on board with trade renegotiations with Beijing versus Canada.
“At Senate hearings this week, senior Republican lawmakers who have urged the president to be more cautious on shaking up Nafta said they would heartily endorse a harder line against Beijing. “President Trump’s priority of confronting the challenges posed by China is a goal that I support,” said Utah’s Orrin Hatch, chairman of the Senate Finance Committee, which oversees trade legislation,” writes WSJ.
Author’s note: It’s about time we’ve had a president that takes trade negotiations seriously. China has been stealing our technology all along. Then they sell it back to us for a cheaper price. Not to mention, the country manipulates their currency and have been playing us in regards to North Korea too. It’s time to hold them accountable.