The concern around intellectual property, industrial subsidies, currency manipulation, and forced technology transfers from U.S. companies to Chinese counterparts is real, but America needs to look to the future, not the past. Thinking about what the global economy will look like in the next century is the main reason America should still want healthy trade with China. Our economies have been symbiotic for many decades, and both countries have benefitted greatly.
America has lost its technology edge and most manufacturing has long been sent offshore. It’s time for some tough love here; Silicone Valley is not the center of technological innovation it used to be. Take one trip to Hong Kong, or South Korea, and you’ll see that the rest of the world has moved past the US at lightning speeds with regards to high speed data, financial technology, and more. In China, they skipped the ATM entirely and went straight to mobile payments. Meanwhile in America we over-regulate our own banking system in the name of consumer protection. However, ironically, it was the consumers who suffered the most during the last financial banking crisis. The main point we are trying to make here is, America was once the teacher, now we are the student, and best we study up.
In the heat of the ongoing trade war between the two nations, President Trump has persistently used tactics aimed at convincing China to adjust their practices through tariffs – and a series of increases – throughout the last year in spite of the volatile impact they have had on the stock market, and the pressure on American farmers and business owners that trade with China.
There are talks of face-to-face negotiations between President Trump and Chinese President Xi Jinping in the coming week. We are hopeful that these talks lead to a renewed long-term trade deal with China, as it will benefit both countries before the next recession settles in.
“I’d rather get the whole deal done,” Trump told reporters at the White House. “I see a lot of analysts are saying an interim deal, meaning we’ll do pieces of it, the easy ones first. But there’s no easy or hard. There’s a deal or there’s not a deal. But it’s something we would consider, I guess.”
We agree with Trump that it’s deal or no deal. Interim isn’t going to cut it.
While America still has one of the strongest consumer economies in the world, if we want to have another lever to pull when the recession kicks in, ending the trade war and cutting a deal now is the right decision for Trump to make. And the editors of this site know better than most, that peace is best kept when two countries have strong trade in place.