Trump’s Economic Policies Towards China Are Working

Simone Gao: Regarding the Trump-Xi summit, some analysts say Trump was fooled by Xi Jinping. Xi would not really make substantial concessions. Instead, they would just trick the U.S. in order to buy some time to come up with new ways to maintain the status quo, just like what they did with previous administrations. Do you think Trump will be fooled and manipulated again by Xi Jinping?

Greg Autry: I don’t think that Donald Trump is easily fooled. I do think, however, the expectations of the United States government as a whole and the financial interests that go beyond the government, and particularly, multinational corporations and investors want to see some sort of negotiation and agreement, so there was a great deal of pressure on Trump and the Trump team to at least appear that they were open to doing so. So as long as Xi said some of the right things, I think that they were required to give China, frankly, a little more leash. And we’re just going to have to just wait and find out, of course, that those promises made by Xi are false, which they always are. But, unfortunately, I think the president was in a situation where he couldn’t look like that bad guy. He had to let Xi, one more time, make a false promise. And I think the fact that Trump set a very tight deadline on it of 90 days before he upped the tariffs, and that deadline starts, not on January 1st, but it starts right now, makes it clear to me that they don’t intend to mess around with this for very long.

Simone Gao: In your recent article in Foreign Policy, you wrote, “Over the last two years, establishment pundits shifted from spouting nonsense about China’s inevitable progress toward capitalism and democracy to asking whether tariffs are the right way to confront a dangerous regime we all agree is built upon lies and cheating.” So what about that? Do you think Trump has pinned his success on trade alone, or more specifically, are tariffs the only tool or the best tool at Trump’s disposal?

Greg Autry: I think that of all of Trump’s policies, his trade policy has been the most effective. U.S. unemployment rate is at a record low. GDP growth is exceptionally high. People on the street are happy with economic performance, and just the opposite is happening in China. So he’s achieved what he wanted, which was leverage over the Chinese leadership in an economic realm using the tariffs. That said, that’s not the only tool that would be available to the administration if they wanted to pursue this further. One of the things they could do would be look at visas for Chinese executives and Chinese students. The recent arrest of a Huawei executive says to me that they’re looking very seriously at the actual behavior of individuals involved in the intellectual property theft and transfer and threats to U.S. national security. It’s also quite reasonable to assume that the U.S. will begin looking at reciprocal laws. So if Chinese organizations want to come to the U.S., they’d be forced into joint partnerships very similar to the way that U.S. companies are forced into joint partnerships often with Chinese state-owned enterprises in order to do business in the Chinese market. We could also force Chinese companies to transfer technology in order to have access to our market the same way that the Chinese government has done. And if they don’t have any technology, perhaps we could charge a market access fee where they need to essentially pay for us to develop technology if they’re going to come into our market. The fact that U.S. companies and individuals can’t really own property in China, and yet Chinese companies have been allowed to come into the U.S. and buy up real property and large swaths of land and mineral resources, which are not available to U.S. firms operating in China, we should level those rules out and prevent Chinese access to real estate, to land, and to mineral resources.

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