Trump needs allies to challenge China on trade - Harry Broadman

Harry Broadman

US president Donald Trump is not necessarily wrong when confronting China on trade, but he has to realize he cannot solve the issue by himself, without allies, writes China veteran Harry Broadman in Forbes. "Mr. Trump’s insistence on handling China in a U.S. ‘go-it-alone’ manner is just plain wrong-headed."

Harry Broadman:

President Donald Trump and his U.S. Trade Representative, Robert Lighthizer, are more than correct that the Chinese do not abide by fair, systematic, transparent and market-based rules for global trade. But the tit-for-tat approach the White House is currently taking to create disincentives to try to alter China’s behavior—centered on applying higher and higher and more expansive tariffs to Chinese exports to the U.S.—is not only self-defeating, it is actually aimed at a largely irrelevant facet of the real and far deeper problem at hand. 

Beijing has not fully effectuated the changes in its domestic governing economic institutions—what we economists call ‘behind-the-border’ reforms—it agreed with the world trading community 17 years ago it would institute. Simply put, Mr. Trump and his economic team are ignoring the proverbial 1.3-billion-ton ‘Gorilla in the Room’:  China has not lived up to some of the most important commitments made in 2001 when the country’s leadership sought, and was granted, accession to the World Trade Organization (WTO). 

At the same time, Mr. Trump’s insistence on handling China in a U.S. ‘go-it-alone’ manner is just plain wrong-headed.  Rather than using the ‘power of collective action’ and building a coalition of other major trading powers—many of whom like the U.S. have been exposed to China conducting trade inconsistent with prevailing norms—Mr. Trump’s efforts will have him falling flat on his face. 

Yes, although so far Mr. Trump is engaging in his classic blustering, bluffing negotiation style—you’d think we’d all catch on by now—the dustup he has generated is causing serious economic dislocation on the ground in China and the U.S.  More pernicious is the extensive rotting out of the credibility of the U.S. on the world economic stage.

More in Forbes (here reprinted with the kind permission of the author)

Harry Broadman is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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