The Double Standard of America’s China Trade Policy
Many liberal commentators in the US think that Donald Trump is right to confront China over its trade tactics, and object only to his methods. Yet Trump’s trade agenda is driven by a narrow mercantilism that privileges the interests of US corporations above those of all others.
CAMBRIDGE – A high-profile United States trade delegation appears to have returned empty-handed from its mission in China. The result is hardly a surprise, given the scale and one-sided nature of the US demands. The Americans pushed for a wholesale remaking of China’s industrial policies and intellectual property rules, while asking China’s government to refrain from any action against Trump’s proposed unilateral tariffs against Chinese exports.
This is not the first trade spat with China, and it will not be the last. The global trading order of the last generation – since the creation of the World Trade Organization in 1995 – has been predicated on the assumption that regulatory regimes around the world would converge. China, in particular, would become more “Western” in the way that it manages its economy. Instead, the continued divergence of economic systems has been a fertile source of trade friction.
There are good reasons for China – and other economies – to resist the pressure to conform to a mold imposed on them by US export lobbies. After all, China’s phenomenal globalization success is due as much to the regime’s unorthodox and creative industrial policies as it is to economic liberalization. Selective protection, credit subsidies, state-owned enterprises, domestic-content rules, and technology-transfer requirements have all played a role in making China the manufacturing powerhouse that it is. China’s current strategy, the “Made in China 2025” initiative, aims to build on these achievements to catapult the country to advanced-economy status.