
Economists See Merit in Trump’s Trade Case Against China - meri_dian
https://www.wsj.com/articles/china-started-the-trade-war-not-trump-1521797401
======
ethbro
Fwiw, the IP trade case seems absolutely valid.

Either China can abide by international laws and actually enforce IP
prosecution on _strategic domestic_ companies, or they don't deserve to play
at the free trade table.

The "Well, we know the Chinese government is unfairly tilting the domestic
economic market in favor of local companies, but if we give them a seat at the
table then eventually they'll change" is never going to be realized when
they're treated with kid gloves by everyone who wants access to their market.

And now that China has a number of internationally competive industries, it
seems like as good of a time as any to press harder.

For all the bullshit that made it's way into the TPP, it was strategically a
good idea. Multilateral tariffs are the only real pressure that an economy as
big as China's will feel.

~~~
paulie_a
I am less concerned about them enforcing IP and more concerned about the
blatant hacking and industrial espionage.

Maybe they should stop that first, then we can worry about pirated DVDs

~~~
smallbigfish
> industrial espionage

Are the Chinese the only ones doing it or are they better at it?

~~~
paulie_a
They might be so good they should launch it as a subscription
platform...stealing other countries stuff as a service

~~~
seanp2k2
I get that you’re being fascetious, but there are many Chinese manufacturers
who will copy a product for you if you ask nicely (i.e. want a large enough
volume to make it worth their time). The other common way this happens is ODMs
there simply produce more of an order for a customer and sell it unbranded or
under some made-up brand name. This is partially why you see so many products
on Amazon with names like WinBuyer, iEnjoyWare, GooBang, Anewish, Globmall,
GooDee, APEMAN, etc etc (those are all real examples). Amazon does sometimes
step in and eat their lunch with AmazonBasics versions of common products (car
top carry bags, camera cases, many home goods, etc). I personally do go for
the AmazonBasics brands in these cases, since while they might be from the
exact same factories as the GooBuy3000 version, I have higher confidence that
I’ll be able to reasonably return it if it’s terrible, and moderate confidence
that it’s at least a passable version of whatever it is (e.g. I own an AB
umbrella and many batteries, all of which are decent).

Amazon also has their own group of “house” brands that they go through some
effort to obscure: [https://www.l2inc.com/daily-insights/amazon-has-more-
private...](https://www.l2inc.com/daily-insights/amazon-has-more-private-
label-brands-than-you-think)

~~~
paulie_a
I actually was not being facetious, I was flat out accusing the Chinese
government of industrial espionage. There is a difference between a company
copying ideas and implementing them independently vs straight up hacking and
stealing secrets. Everyone does the first, China does the latter on a massive
scale.

------
asfasgasg
At least, you can cherry-pick two who think so (that is how many economists
are quoted in the article). On the other hand, you can probably find two
economists who will say almost anything. I'm more interested in surveys like
the ones the IGM Forum conducts. Here is what they think about the aluminum
and steel tariffs:

[http://www.igmchicago.org/surveys/steel-and-aluminum-
tariffs](http://www.igmchicago.org/surveys/steel-and-aluminum-tariffs)

I don't really expect the China tariffs to get much better results, but I
guess we will see!

~~~
melling
Yeah, you’re telling us the tariffs won’t work and people don’t agree with
them. How about we back up and discuss the degree to which China is or is not
being fair in trade.

Elon Musk, for example, wants certain tariffs because China has a 25% tariff:

[https://www.cnbc.com/2018/03/08/elon-musk-sides-with-
trump-o...](https://www.cnbc.com/2018/03/08/elon-musk-sides-with-trump-on-
trade-with-china-citing-25-percent-import-duty-on-american-cars.html)

~~~
ajsharp
Sure, they're good for his business. Tariffs are generally good for the
industries they protect, at the expense of consumers, because prices will rise
in that industry. So one industry and it's employees receive protection from
foreign competition, but consumers "pay for it" on the backend with higher
prices.

~~~
programmarchy
That's a one-dimensional view. We are not only consumers. We're also laborers,
and citizens of a nation. If every other nation has tariffs, and the U.S.
doesn't, then it's not a level playing field and industry and capital will
leave, as we have seen. It's important to national security that the U.S.
maintains its manufacturing base, and personally, I'd rather pay a little more
for American goods if that means the working class doesn't descend into
poverty, which is costly in other ways.

------
fwdpropaganda
"Fair" is a bullshit notion when it comes to trade. What Americans say is that
China can produce <insert commodity> cheaper than the USA only because "it's
subsidized", and that's unfair.

What exactly does it mean to say that is "unfair"? The USA for example
subsidizes their soybean exports, is that "unfair" to the rest of the world?

Their society spotted a strategic opportunity in collectively working together
to lower the prices of some exports. Now, it might make sense for the USA to
apply strategic tariffs. But calling their decision "unfair" is just filler
word nonsense, as we're all playing by the same rules.

~~~
djrogers
You seem to be focusing on one rallying point of the protectionist agenda
(subsidized production), and not the underlying predatory trade practices.

See, there are unfair trade practices, even if you think your example isn’t -
practices such as dumping, or outrageously high unilateral tariffs. These
destabilize global economies, and are used specifically to damage foreign
industry. These are not simply a matter of ‘strategic opportunity’, which is
why they are generally forbidden by international trade groups.

Of course they don’t actually get to do much to enforce international law at
the WTO, but that’s a different story.

~~~
digitaltrees
You make some good points. I agree. There are differences in subsidies. For
example. It may be ok to subsidize food production so that a country can
ensure continued ability to maintain production capacity domestically, even
where it’s not economically viable. But that is very different from a country
strategically subsidizing an industry with the objective of marking the
products so low priced that they drive all the domestic producers out of
business and then, when they are left standing, jacking up the prices. That’s
called dumping. There is a reason we have the WTO and a dispute resolution
process, it’s be cause some things are ok and some are not.

~~~
fwdpropaganda
> It may be ok to subsidize food production so that a country can ensure
> continued ability to maintain production capacity domestically

Isn't that how the Chinese justify what they do?

------
pasbesoin
It would have been better 20+ years ago, before wholesale IP flow there and
some other places.

There was theft. There was also taking advantage of that theft by "Western",
"IP friendly" businesses. Hardly the only, but one of the reasons that
"outsourcing" had such "cost savings". Because the suppliers outsourced to
weren't actually paying for the tools and technology they were using (versus
e.g. a domestic U.S. producer).

It would have been better 20+ years ago, before wholesale IP flow there and
some other places.

There was theft. There was also taking advantage of that theft by "Western",
"IP friendly" businesses. Hardly the only, but one of the reasons that
"outsourcing" had such "cost savings". Because the suppliers outsourced to
weren't actually paying for the tools and technology they were using (versus
e.g. a domestic U.S. producer).

P.S. I'm all for the "third world" \-- or "second", or whatever -- advancing.
I don't think nor respect the idea that the "first world" had to hollow itself
out to accomplish this. Nor so distort other societies and governments into
such abusive forms, e.g. by using our technology to empower an abusive but
cooperative faction over the others.

But then I've been an optimist. The last some years of U.S. politics have
really put that to the test for me, personally.

------
sidibe
People might be more understanding if he wasn't at the same time threatening
tariffs on everyone else too.

------
burfog
Suppose that we decided that we shouldn't have abnormal tariffs. We decide to
do what is typical for large and/or advanced economies.

We'd have to raise tariffs.

------
graycat
IMHO, Trump's idea on tariffs and China is not really about trade, free trade,
or economics. Instead, Trump's ideas go back to some simpler stuff --
predatory marketing to achieve and then exploit a monopoly. So, run losses,
drive competitors out of business, then take all the market, have a monopoly,
and raise prices. Also for China, much of the goal is international power.

China is like the guy who promised to catch the wild pig. So each day he took
a walk in the woods and left a trail of corn. Soon the pig found the corn and
started following the corn trail. Slowly the corn trail led to a corral with
an open gate. So, sure, as soon as the pig was inside the corral, the guy
closed the gate. Done. One pig captured.

China doesn't want trade or free trade; instead, China wants to use "the old
take over the world ploy". So, China will try to reduce everyone else to
colonies supplying goods, especially from agriculture, at low prices while
they import products from China at high prices. That idea used to be called
_mercantilism_ , e.g., what England did to India.

The Chinese Communist party is willing to have their citizens work however
long at whatever work to support their "old take over the world ploy".

For the US, the situation is easy: Slap on tariffs.

The US tariffs will also be good for the Chinese people -- have the Communist
party keep the Chinese people busy making consumer products, concentrating on
education, a nicer country, etc.

China is a big country with lots of land area near by -- Mongolia, Russia,
India, SE Asia, Australia, etc., and doesn't much need to import anything and
needs next to nothing from the US.

Similarly the US needs next to nothing from China.

The US tariffs will also be good for the US, e.g., put many millions of US
citizens back to work. In many ways, the US standard of living was much higher
in 1950 when foreign trade was not very important for the US.

Besides, just why should the work output of US workers be shipped out of the
US? Really, only if that output can be swapped for something more valuable to
the US, e.g., products we need and don't have, e.g., tin, natural rubber,
teak, but there isn't a lot of such products the US really needs. Okay, we
could sell the output for gold, sell the gold to the US government, and let
the gold accumulate in Fort Knox. To what end? Fort Knox is awash in gold.

I know; I know; I know: The big plan was that poorly paid US workers would
give their jobs to China, India, Pakistan, etc. and, then, get much better
jobs at Microsoft selling software at high prices to China, India, Pakistan,
etc. Well, mostly it didn't work: Instead the textile workers in the Carolinas
are still out of work; same for the steel workers in the Rust Belt, etc.

Why? Some US foreign policy thinkers thought that such trade would make a more
peaceful world. The people doing the importing liked making the money.
Pakistan liked getting US help setting up a textile industry and selling back
to the US to get cash to buy, say, oil or stuff to make their atomic bombs.
Bummer.

Trump is correct: China has devastated large areas of the US fly-over states.
The whole show, from Nixon's trip to China to China in the WTO to the present
has been a disaster in nearly every sense for the US.

~~~
fwgwgwgch
This is also the reason Trump wants friendship with Russia. China would be
easier to handle if Russia weren't so aligned with them

