President Donald Trump has been a vocal critic of China's trade practices, accusing the country of engaging in unfair and predatory behaviors that harm American businesses and workers. This critique has been a central theme in his economic policy, particularly during his presidency. However, recent revelations about the printing of his 'God Bless the USA' Bibles in China have raised questions about the consistency of his stance on trade practices.
1. Unfair Trade Practices by China
China has been accused of numerous unfair trade practices, including dumping, discriminatory non-tariff barriers, forced technology transfer, overcapacity, and industrial subsidies. These practices have made it difficult for many U.S. firms to compete on a level playing field. For instance, China's 'Made in China 2025' plan aims to dominate key industries such as robotics, aerospace, and new energy vehicles, which could potentially harm U.S. companies in these sectors.
China also imposes significantly higher tariffs on U.S. exports compared to U.S. tariffs on Chinese goods. For example, while the U.S. charges a 2.5% tariff on Chinese cars, China maintains a 25% tariff on U.S.-made cars. Additionally, China has banned imports of U.S. agricultural products like poultry, cutting off American ranchers and farmers from a major market for their goods.
In 2018 alone, the Trump Administration identified dumping or unfair subsidies on 13 different products, including steel wheels, cold-drawn mechanical tubing, tool chests and cabinets, forged steel fittings, aluminum foil, rubber bands, cast iron soil pipe and fittings, and large diameter welded pipe. The U.S. has also accused China of overproducing steel and aluminum, which threatens America's national security.
The U.S.-China trade deficit has been a significant issue, with the U.S. running a $375 billion deficit in 2017 alone. This imbalance has led to widespread criticism of China's economic policies and has been a major point of contention in trade negotiations between the two countries.
2. Intellectual Property Theft and Technology Transfer
China has been accused of aggressively seeking to obtain technology from American companies through various means, including forced technology transfer. The U.S. Trade Representatives (USTR) Section 301 investigation identified four aggressive technology policies by China that put 44 million American technology jobs at risk: forced technology transfer, requiring licensing at less than economic value, Chinese state-directed acquisition of sensitive U.S. technology for strategic purposes, and outright cyber theft.
China uses foreign ownership restrictions, administrative review, and licensing processes to force or pressure technology transfers from American companies. For instance, China requires foreign companies that access their New Energy Vehicles market to transfer core technologies and disclose development and manufacturing technology.
The cost of Chinas intellectual property theft costs U.S. innovators billions of dollars annually. China accounts for 87% of counterfeit goods seized coming into the United States.
3. The Trump Administration's Response
In response to these unfair trade practices, President Trump has taken several actions aimed at addressing the issue. In January 2018, he announced safeguard relief for U.S. manufacturers injured by surging imports of washing machines and solar products. This was the first use of Section 201 of the Trade Act of 1974 in 16 years.
The Trump Administration also initiated a Section 301 investigation into Chinas practices related to forced technology transfer, unfair licensing, and intellectual property policies in August 2017. Following this investigation, President Trump directed agencies to explore actions to protect domestic technology and intellectual property.
Under President Trumps leadership, the U.S. imposed a 25% tariff on $50 billion worth of goods imported from China containing industrially significant technology. The USTR continued WTO dispute settlement against China to address discriminatory technology licensing requirements.
4. Critique of WTO's Effectiveness
The Trump administration has argued that the World Trade Organization (WTO) has failed to effectively address Chinas unfair trade practices. However, some argue that the WTO remains a crucial tool for disciplining Chinas errant trade practices.
Despite skepticism about WTOs effectiveness, filing more complaints against China could be a more effective long-term strategy than relying solely on unilateral tariffs. China has generally complied with WTO complaints brought against it, and previous WTO complaints have led to market opening by China.
The Trump administrations preference for unilateral tariffs has led to retaliatory measures from China, which have targeted sectors and electoral districts that have supported Trump. This approach has raised concerns about its impact on American jobs and consumers.
5. The 'God Bless the USA' Bible Controversy
A recent revelation has highlighted the contradiction between President Trumps harsh anti-China rhetoric and his commercial dealings with Chinese companies. Thousands of his 'God Bless the USA' Bibles were printed in China, a country he has frequently accused of unfair trade practices and stealing American jobs.
The estimated value of these shipments was $342,000, with the potential sales revenue being about $7 million based on the retail price of $59.99 per Bible. This controversy has sparked debate about conflict-of-interest concerns and the mixing of religion and state in political campaigns.
If applied to his 'God Bless the USA' Bible, a proposed 60% tariff on Chinese imports would boost its price to $95.98, further highlighting the complexities of trade policies and their impact on everyday products.
In conclusion, President Trumps critique of Chinas trade practices is multifaceted and complex. While there are valid concerns about unfair trade practices, the effectiveness of his approach remains a subject of debate. The issue underscores the need for a balanced strategy that addresses structural issues in trade relations while minimizing harm to American businesses and consumers.
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