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Tuesday, April 10, 2018

Tooth and Nail



Friends, I'm seeing some signs that President Trump is playing nice with China, and it makes me nervous. I believe that we need a trade war with China, and we need to solve the inequities in our relationship once and for all.  This would ultimately be best for both sides.  A deal that only tweaks our trade deficit in order to create the illusion of progress, however, would be kicking the can down the road...  Here's my latest analysis of where we stand:

President Trump: Give No Quarter to the Chinese

Recently, President Trump tweeted: “President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!” The upbeat, conciliatory tone of the President's message surprised many observers, since the media is trumpeting a looming “trade war” with China, and Trump himself has condemned abusive Chinese trade practices in very strong terms.

I respectfully submit that the President's tweet may be counterproductive to his aims. His goal is to pressure China to make meaningful concessions on trade. That is, China needs to open its market. It needs to stop strong-arming U.S. companies into surrendering their proprietary technology and know-how as a cost of doing business in the world's largest emerging market. It needs to stop using punitive tariffs and other more subtle measures to freeze out American manufactured goods. It needs to stop violating U.S. patents, trademarks, and copyrights with impunity. It needs to stop subsidizing and sheltering many of its industries. It needs, most of all, to stop putting Americans out of work, as a result of all of its other trading shenanigans.

These are not minor adjustments in our relationship with China. They are not concessions that it will be easy to extract. And yet they should be non-negotiable demands for U.S. trade representatives. If they were met, the U.S. trade deficit with China, which currently stands at $375 billion per year, would contract rapidly. It has not contracted in a long time. On the contrary, it has grown inexorably – and previous U.S. presidents have sat idly by as it did so.

Mr. President, it seems as though you are trying to reassure the Chinese, the markets, and the American people that we will not, in fact, have a trade war with China. You have directed your Secretary of Agriculture to make sure that U.S. farmers do not suffer if we do. You have promised President Xi your friendship no matter what. However, you have also threatened to level the biggest set of tariffs in history against the Chinese. These are mixed messages, at best.

As a negotiator, you must know that, to extract maximum concessions from a negotiating partner, you need to apply maximum pressure. In fact, you need to be willing, and you need to be seen to be willing, to walk away from the negotiations entirely. Your adversary, in short, must believe that he needs you more than you need him.

By telegraphing your reasonableness, Mr. President, and by reassuring all parties that real pain and conflict will be avoided, you may make it impossible for the U.S. to “win”. Perhaps your goal in threatening China with tariffs is to obtain incremental changes – to win on a small scale and claim victory. That would be unfortunate, because a $375 billion trade deficit, compounded over years, even decades, equals millions of American jobs. It means that our economy is bleeding freely, and, if any body bleeds long enough, it dies.

I suggest that you take the opposite tack. I suggest that, instead of reassuring the Chinese, the markets, and the American people, you tell them that a trade war is actually coming. I suggest that you give a primetime address to the nation, and that you spell out the seriousness of China's trade violations, and the horrendous human cost in terms of unemployment and economic dislocation in this country. I suggest that you declare that America demands radical, permanent changes in Chinese trade practices. I suggest that you instruct your foreign affairs and national security teams to assemble a coalition of nations around the world to join with us in a broad-based effort to punish China for its trade manipulation. Most of all, I suggest that you ask the American people to ready themselves for sacrifice, which a trade war will surely require.

The Chinese believe that they can win a trade war, for the simple reason that they believe Americans are weak, selfish, decadent, and incapable of sacrifice. They are wrong. The media may be unwilling to contemplate paying a few cents, or a few dollars, more for certain products, to save the American economy and the American worker from a slow but inexorable decline. The American people, however, will gladly take on this burden, if it is explained to them that they do so for a just and honorable cause, and ultimately for each other.

Mr. President, now is the time to right the wrongs of the unfair trade deals that you made a central theme of your campaign. Unfortunately, this can only be done by risking a full-blown trade war, which will inevitably hurt many Americans, at least in the short term. Hopefully, a united front and a strong negotiating position will cause the Chinese to back down quickly. If not, they will soon learn that the “sleeping giant” of America, once roused, can defeat any foe.

Dr. Nicholas L. Waddy is an Associate Professor of History at SUNY Alfred and blogs at: www.waddyisright.com.

You can also find the article here, courtesy of American Greatness:

https://amgreatness.com/2018/04/11/trump-should-give-no-quarter-to-the-chinese/

12 comments:

  1. Dr. Waddy: My response to your essay will be in segments; there is very much substance to your comments and I have not fully thought out my positions on it. One tentative comment I would make is that our President has a sometimes engaging tendency to think out loud. He may be predicting a productive conflict with China. It might be characteristic of a happy warrior like him to see it that way.Constructive tension between nations or doctrines is a sometimes creditable concept but he may be speculating on results in a manner which jeopardizes their realization. This is where the advice of those well aware of Chinese ways is vital. I know and know of, some of them.

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  2. Good point, Jack -- the Chinese may interpret his remarks differently than I do. In addition, they're quite capable of hedging their bets, just like us. They've blustered of late, and they've also pledged to make many of the changes Trump wants. Both sides are keeping their options open.

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  3. Dr. Waddy: I think your overall theme in this post is credible and plausible. Like a judo master, our President may be probing for weaknesses or attempting to move the Chinese to positions from which we may derive further economic advantage. Maybe his mixed signals have that purpose. China is probably entering another of its great eras ( re Han, Tang, maybe Ming dynasties). Americans have never seen this in China in our short time as a country. We have seen either a prostrate land or one oppressed beyond measure by Marxist madness. Though it is statistically untrue, China may now see itself as a nation fully as great as we have proven to be and deserving of appropriate deference. I would have some doubt that they see us as weak or incapable of sacrifice. Our prolonged and domestically agonizing effort in Vietnam may have shown both the Soviets and the Chinese that we are willing and able to pay a hard price. That we are morally decadent and spoiled by overabundance and ease, I'm sure they believe but they must consider that the Germans and Japanese staked all on that notion in WWII. It may be that their weak point could be revealed by shaming them internationally for their intellectual piracy. Pride in the essential greatness of China may prompt them to abandon this tawdry practice. An increasing highly educated class enabled by prosperity may generate pressure to do this so that it may engage in free and honorable scholarly discourse with the rest of the world. But as you've pointed out, incremental wins may be insufficient to protect our interests and that may be all that this would be.

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  4. Well said, Jack. Of course, you're right that neither China nor Russia would enter lightly into a military confrontation with the U.S. I would guess that they see our political system as indecisive and hopelessly divided, though, and our news media is doing its best to prove them right every day. As you say, incremental change in trade may be what we get -- in fact, I would be very impressed if we got anything more!

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  5. Dr. Waddy: Well said too. I didn't think about what our political turmoil might say to other countries. On the part of now probably permanent President Chi there may well be bemusement with the "Leader of the Free World" tolerating the kind of truck he must, of necessity, endure, should it be levied, in our system. It was said, by some old time Bolsheviks, of Khrushchev's 1956 denunciation of Stalin, "why if Stalin were here there wouldn't be even a wet spot left of one who spoke like that!" Mao would have followed suit. I'd guess that Chi is a pragmatist who knows that China's nominal Marxism is a front but is, in a very firm Chinese tradition, an authoritarian. Traditional Chinese government was highly centralized, extending nominally to the Emperor himself but did not reach below the level of (roughly) our county executive(below that, regulation of society was the function of the clan and of dictatorial fathers)but was administered by Mandarins who had obtained their authority through a draconian competitive system of civil service qualification and who enjoyed and defended very much deference, authority and consequent and expected luxury. Woe to the ordinary person who approached the Tamen (the office of the Mandarin).The Mandarin's judgement would consist of whatever he( in a moral wisdom assumed by the exhaustive educational process he had mastered) decreed. His consequent virtue was assumed. Communism and the 20th century extended the reach of government in China but initially preserved that tradition of authority. Mao,out of his belief in "continuing revolution" recklessly challenged it when he fomented the Cultural Revolution ( I remember my freshman year Professor of Soviet and East European Politics in 1966 saying 'something very significant is happening in China now but we cannot yet say what') but Teng Hsiao Ping put the quietus to that in Beijing in 1989. He was a veteran of The Long March (modern China's Valley Forge) and although he delivered China from Marxism there was no way he was going to reendure the savaging he was subjected to by unrestrained youth (anathema to traditional China)in the Cultural Revolution, once again. Western democracy appears to be working in Taiwan but the mainland isn't ready for it yet, I think. UnMarxist, miraculous and unprecedented prosperity is a very great consolation for them, at least for now. Too, I think most importantly, Confucianism weathered the Communist onslaught in very fine fettle and,like the Church in Poland, once the inhuman Marxist knee was removed, sprang back in full bloom. President Chi is likely therefore to have a long tenure as a largely unquestioned ruler and may harbor some relatively mild contempt for President Trump in that he is not.

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  6. A superb and encyclopedic analysis, Jack! I agree that authoritarianism probably suits the Chinese temperament better than (messy) democracy, but the shift from oligarchy to dictatorship is quite interesting. Do you think it's a testament to Xi himself, or is something more fundamental changing in the Chinese system?

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  7. Dr. Waddy: I used an incorrect romanization for Xi's name; also, I misused the word Tamen - it should have been Yamen. I know nothing about Xi's rise to the top and cannot speculate in any credible manner on his strengths except to say this:I would guess, from having attended a Chinese University in Singapore, that it is the product of very, very hard work, self sacrifice, disciplined personal conduct and perseverance in a society where the willingness to endure such in order to gain honor and prosperity is commonplace. My Singaporean ethnic Chinese roommate, who was attending university because his entire extended family had pooled their resources to send him, spoke good but labored English and was taking Intermediate English. Yet, in his economics course he was required to read the Samuelson text which bedeviled so many American students, in English. He studied twelve hours a day every day.He told me "I must succeed". This is in keeping with the terrifically demanding educational process Mandarins endured. Xi is almost certainly a product of such a regimen. As for a fundamental change in the Chinese system I would guess they have had their fill of that after their Communist nightmare.

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  8. Jack, it certainly seems as if the "Puritan work ethic" is alive and well in our Chinese friends, although I imagine the corrosive effects of Western consumerism, egoism, and "entertainment" will take care of that soon enough. What surprises me is that China HASN'T had a dictator since Mao. Since the Chinese system is similar to the Soviet one, you would expect it to yield similar results: a clique at the top that tends to sort itself in such a way that someone always emerges as top dog. Why have the Chinese not had a top dog until now? It's curious.

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  9. Dr. Waddy: Teng Hsiao Ping was top dog but he was quite self effacing. I think he set China on its present course ("what does it matter what color a cat is as long as it catches mice".) His determination to set China free to be China was all the more remarkable when you consider how he suffered for "revisionism" during the Cultural revolution. Maybe Xi is solidifying his power in anticipation of social upheaval (caused by soaring expectations brought on by prosperity and higher levels of education, regionalism and racial minority concerns, environmental perfectionism of the kind seen in the West or the degrading effects of Western popular culture). I think the Chinese Communist system was sustained only by draconian tyranny and as that eased the real China sprang back. In Russia, even when Stalinist terror was mitigated the system still proved untenable and it imploded. What they have now is yet to be worked out. If only Pyotr Stolypin hadn't been assassinated and had nailed Lenin and if WWI hadn't occurred. A stable and orderly, if not maybe not completely free Russia might have evolved, maybe even with a "reign but not rule" Czar or Czarina.

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  10. Quite so, Jack. Russia's descent into Bolshevism was anything but inevitable. Same goes for China. Of course, in practice communism is often just acquisitive autocracy cloaked in egalitarian rhetoric. I've always felt that the only reason communism survived so long was because, most of the time, it wasn't all that communistic.

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  11. Dr. Waddy: I completely agree. Witness: Madame Mao's luxurious excesses; Daniel Ortega's three thousand pairs of designer sun glasses purchased in an accomodating NYC; Breshnev's one hundred cars in a nation where lucky citizens might, after years of sacrifice, gain the purchasing power to buy an almost wood burning mockery of a modern automobile. This isn't 1917; we know now for sure, from the lessons of an appalling 100 years, that Marxism empowers murderous sociopathic humbugs only.

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  12. Watch out, Jack -- you may have just given Marxism a huge shot in the arm. "Murderous sociopathic humbugs" all across America just perked up. You even promised them sunglasses and fleets of cars! I fear they may not comprehend your sarcasm. Ha ha.

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