Trump’s Trade And Tariff Tactics - Coronado Eagle & Journal | Coronado News | Coronado Island News: Opinion

Trump’s Trade And Tariff Tactics

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Posted: Thursday, May 23, 2019 9:57 am

China and Russia are often referred to as our principal rivals and potential adversaries. That may be true for China, but Russia today isn’t even in the same league. China, the world’s most populous nation and second largest economy, is still a growing economy and military power. Russia, by comparison, is no longer a great power. Its economy is moribund and its population is aging. We are rivals only in terms of the size of our nuclear arsenals.

While liberal critics of the Trump Administration and their friends in the mainstream media imagine that Trump’s expressed admiration of Vladimir Putin’s domestic support and raw political power is proof of a cozy relationship, Donald Trump has been more like Putin’s worse nightmare. He surely must regret having supported his election over the more predictable and docile Hillary Clinton. As the U.S. has become, under Trump, the world’s largest producer and exporter of clean liquid natural gas, it is threatening to end Russia’s lucrative monopoly on supplying energy to energy-starved Western Europe. Energy is about all that Russia has left to sell other than weapons and vodka. It has become merely a regional power and a declining one at that.

China, on the other hand, will continue to develop as a growing rival and economic and military powerhouse which has the potential to displace us as the world’s largest economy. It has already displaced Russia as our primary geo-political rival. Economic competition and its associated tensions have, historically, often led to military conflict. Trade imbalances and competition for markets have provided the economic flashpoints along with those growing out of territorial and sovereignty issues like Taiwan and territorial claims to the South China Sea, the latter posing a threat to freedom of navigation. Freedom of navigation is a fundamental U.S. issue which to us is, like Taiwan is to the Chinese, non-negotiable.

In a perfect world, the two economic giants should prosper together in peace and tranquility through win/win trade agreements but this world is far from perfect and there are usually losers as well as winners. The Trump Administration’s trade policies with China need to be viewed from this perspective. Trump was elected as, among other things, a dealmaker. His negotiators will invariably put America’s interests first. That may not always please the globalists, but it should please American workers and those who are tired of seeing America’s interests subordinated by lopsided trade imbalances, foreign governments subsidizing their industries and the theft of our technology. China has a right to grow and compete with us at every level but we are under no obligation to help them to our disadvantage. China is stealing technology from us that they could use to harm us. The Trump Administration has decided to draw the line and attempt to level the playing field by imposing tariffs on goods imported from China.

Economists are divided over who pays the costs of those tariffs, but economists seldom agree on anything. Perhaps that’s why economics is called the dismal science. Most agree, however, that most of the cost is passed on to customers through higher prices, but that’s not necessarily so if exporters want to retain market share and America is the biggest and most robust market in the game.

China has far more to lose in the trade wars than the U.S. does. It exports over three times more to us than we export to them. It needs the U.S. market. The U.S. accounts for about a quarter of the world’s gross domestic product and our economy is more resilient than theirs or any other by far. The U.S. is now energy independent. China, by comparison, is not and has relied heavily on cheap, dirty coal for its industrial growth and eventually must address its serious pollution problem which renders some of its cities almost uninhabitable.

The U.S. clearly has the upper hand in the trade wars and if tariffs force China to open more of its markets and stop stealing our technology or at least stop demanding that our companies share technology with them as a condition of doing business, it may be worth some price pain to customers buying Chinese goods. We can also turn to sources other than China for some imports and, of course, it would help to buy more American-made goods.

It would also be helpful if the loyal opposition and their scribes in the liberal media held off on their reflexive condemnation of every administration policy long enough to see whether or not it just might have a chance of working.

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