Alfonse D'Amato

U.S.-China relationship is reaching a critical point

Posted

A lot of attention is being paid these days to America’s relationship with China. And for good reason, because China must decide whether it will be a partner to the U.S. or an adversary. The next few years will determine whether that relationship morphs into something similar to U.S.-Japanese relations — which have been built on mutual respect and cooperation, even as we have competed with Japan — or takes a darker turn, toward distrust and dangerous military and economic conflict.

Right now, China is at the center of two key, interrelated conflicts, both of which could ease or strain its standing with the U.S. The near-term conflict is the powder keg on the Korean peninsula. China has enormous economic and political leverage over North Korea, which it has propped up for decades. It can either lean on North Korean dictator Kim Jong-un to give up his nuclear brinkmanship and make peace with the U.S. and its neighbors, or it can continue to pump aid into the North and undermine efforts directed toward its denuclearization.

A war among the U.S., South Korea and North Korea would not only devastate those countries, but could trigger economic turmoil all across Asia, and so poison U.S.-Chinese relations that it exacerbates the other, longer-term conflict between the two countries: the ongoing U.S.-China trade dispute.

For years now, China has taken advantage of U.S. ineptitude in dealing with predatory Chinese trade policies. The list of offenses is long. At the top are ridiculously high Chinese tariffs against U.S. products. A case in point is the 25 percent tariffs against exported American cars, compared with U.S. auto tariffs as low as 2.5 percent. China’s goal was to force U.S. automakers into lopsided deals with Chinese government-supported companies to build cars in China. Only after the Trump administration signaled that it was serious about a fairer U.S.-China trade relationship did China relent and offer to lower its auto import tariffs to 15 percent.

The same goes for below-cost Chinese steel dumped on the U.S. market, which has devastated steel manufacturing in this country and the jobs that go with it. President Trump has been right to confront China with higher U.S. tariffs on Chinese steel. It may be the only way to compel China to back off its predatory trade practices.

Ditto with Chinese-made solar panels, which have also been dumped on the U.S. market and cost thousands of jobs here.

Added to these unfair trade practices has been China’s blatant theft of U.S. intellectual property, from pilfered patents to stolen software. The losses from these thefts from American companies have totaled hundreds of billions of dollars.

Trump has offered carrots along with the stick of stronger U.S. defense of American companies. Chinese information technology companies have been in the forefront of unprecedented undermining of cyber security. That’s how the Chinese IT giant ZTE got crosswise with the U.S. But Trump has wisely indicated to China that he will give ZTE a second chance in the American market if China cleans up its act in our trading relationship. The president deserves the flexibility to offer this concession to China, and any congressional efforts to undermine it would take a powerful trade-negotiating tool out of his hands.

Trump’s insistence on “reciprocity” in our trade relations with other countries has been spot-on. His experience in negotiating business deals in which both sides need to come out winning something is being put to good use in our trade strategy. Let’s not forget that one of the major reasons Trump was elected president was that he understood the economic anxiety American workers and their families faced as millions of jobs poured out of our country to faraway places like China. Now that our manufacturing economy is finally showing signs of resurgence, it’s the right time to let the rest of the world know that in the future, America will fight for every one of those American jobs.

The next few weeks will be critical in this ongoing trade struggle. The Trump administration has just announced that it is prepared to move forward on 25 percent tariffs on up to $50 billion in Chinese imports to the U.S., along with tight new restrictions on Chinese acquisition of American technology. This should be a powerful incentive to China to give the U.S. the fair trade deal it seeks. The days of American inaction are over.

Al D’Amato, a former U.S. senator from New York, is the founder of Park Strategies LLC, a public policy and business development firm. Comments about this column? ADAmato@liherald.com.