President Trump, let's make a deal with China already

Now that trade tariffs have Xi Jinping's attention, make clear that Washington expects Beijing to change how it does business: Our view

The Editorial Board
View Comments

Donald Trump has long seen his role as a maker of deals. This was true when he was a real estate developer. And it has been true during his presidency, as evidenced by his renegotiated trade pact with Mexico and Canada.

Now would be a fine time for Trump to strike a deal with Chinese President Xi Jinping over the increasingly fraught trade relationship between their two nations. The leaders are set to meet Saturday on the sidelines of a multilateral summit in Argentina.

In September, Trump imposed tariffs of 10 percent on about $200 billion of Chinese-made goods entering the United States. As the summit approaches, Trump has threatened to raise the tariff to 25 percent and apply it to more goods.

The Chinese have responded with their own retaliatory tariffs on U.S. goods rather than accede to Trump's unspecified demands.   

OPPOSING VIEW:China pledges usually ring hollow

While it is widely believed that a full-blown trade war would harm China more than the United States, Trump’s tariffs are already having a negative impact on this side of the Pacific. They drive up the price of goods, such as Christmas gifts at Walmart, to American consumers. They are part of the reason that U.S. automakers have been slashing jobs, as the cost of steel and aluminum increases. And they are often cited as a reason the economy might be heading for a soft patch.

What's more, the taxes on imports are creating a kind of ad hoc, arbitrary form of bureaucracy, where tariffs are imposed and then waivers are granted to thousands of companies that use imported raw materials and can make an economic or political argument for why they should be exempted. 

That's why a deal avoiding a full-blown trade war would be beneficial for both countries in the near term. But there is more than short-term thinking at work here.

For all of Trump’s bluster, he is right that China has been a less-than-trustworthy economic partner.

Companies that want to do business there are often forced to partner with Chinese firms, which means sharing valuable intellectual property. These foreign companies are also subject to outright theft of intellectual property from hackers. And, if the companies make products that can be easily pirated, they might find cheap knockoffs of their trademarked products sold in black markets.

Many Chinese companies are owned in full or in part by the government, which means they get preferential treatment. And if competitors want to complain, they can only turn to courts and regulatory boards controlled by the self-interested Communist Party.

This unfortunate situation, and not the mere fact that China runs a large trade surplus with the United States, should be Trump's focus. Now that the president has China’s attention, he could make clear that Washington expects changes in the way Beijing does business.

The proper way to do this would be to work with other countries to pressure China to adopt open markets and policies that reflect the rule of law. A deal that averted a tariff trade war but took China in this direction would be the best possible outcome this weekend in Buenos Aires.



View Comments