Michael Swartz / January 3, 2020

Considering Trump on Trade

His strategy with tariffs has and will cause pain at home, but the end goal is worth the price.

If a bully took your lunch money day after day for weeks on end, one of two things would likely happen: You’d continue to acquiesce and keep the peace while hoping that the bully will one day grow tired of victimizing you, or you’d take a stand and say “no more!” while hoping that the prospect of a fight might cause the bully to change his ways. While presidents before him have taken the former approach with China, President Donald Trump is in the arena, fighting to make the communist nation a trustworthy trade partner. Round one of their bout is slated to come to an end later this month.

The punches being thrown in this instance are tariffs, and we’re told that these are crippling blows to American manufacturing. Still, it’s Trump’s willingness to fight that we’ve been interested in. For example, last spring our Mark Alexander made the case that this president has finally addressed three decades’ worth of piracy, noting about our reticence to act, “In exchange for a market that has for years been flooded with cheap Chinese goods, American politicians have empowered Communist China to become the greatest existential threat to our national security.”

As these predicaments often do, this one began with noble intentions: a belief that engaging China and its underdeveloped market would bring it into the modern world, and the exposure to capitalism would encourage the Chinese people to demand reforms or even regime change. Unfortunately, the way it’s worked out is the opposite of those good intentions.

As the Washington Examiner’s Nathaniel Black asserts, “Going into business with murderous, quasi-communist bastards gives them leverage, and they use it. Our trade relations with China have not liberalized that country; they have given the thugs who rule it more tools of repression at home and the means to buy favor and bully critics abroad. After adding up the expensive externalities and the social cost, cheap stuff from China does not look as affordable as it does on the store shelf or the online cart.”

There is also an electoral factor to consider. A best-case scenario for the ChiComs would be a trade war resulting in a weakened American economy that allows one of the Democrats to beat Trump in November. Yet even if Trump wins, the Chinese can just wait him out. At worst, they know he’ll only be in office until 2025, and that his successor is unlikely to adopt the same tough approach.

The unknown factor in all this, however, is just how badly the trade war is affecting China. We know its economy has slowed considerably in recent years, and to an extent the Chinese are victims of their own success, as some industries have left China for even cheaper destinations in southeast Asia. And inasmuch as those nations aren’t pointing missiles at us and would be amenable to bilateral trade deals of their own, this is good news for the U.S.

But it’s going to take more than a few manufacturers leaving China to rectify nearly a half-century of misguided policy. It will hurt in the short run, but the Trump way of drawing a little blood himself from the Chinese bully is arguably the best — and most peaceful — way forward. It’s better to be bloodied in a trade war than a shooting war, and we’ve become dangerously indebted to the Chinese in more ways than one.

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