China’s trade war

July 28, 2018

Everyone knows China will do everything in its power to give its industries an unfair advantage over the rest of the world. This was the case in 2002 when President Bush levied tariffs ranging from 8-30 percent on steel imported from Chinese suppliers.

In the years leading up to these tariffs, more than 30 American steel makers had gone out of business. China was guilty of subsidizing its steel manufacturers in violation of its international trade commitments, which created an abundance of supply and suppressed the market price of steel.

China has not only continued this policy of unfair subsidies, but added to it the extortion and outright theft of American intellectual property. Chinese firms, many of which are directly controlled by its government, routinely seek to purchase or merge with American firms and thereby access American patents and trade secrets.

This led President Trump to levy tariffs of 10 percent on aluminum and 25 percent on steel imports from China and a number of other countries. In response to these tariffs, China has targeted U.S. agricultural products such as soybeans, sorghum, and hogs with tariffs of its own, which have been particularly harmful to Nebraska and other states heavily reliant on agriculture.

Because China was originally the aggressor in the dumping of steel on international markets and stealing our intellectual property, its retaliatory tariffs on American products are completely unjustified. As a stopgap measure, President Trump announced this week a $12 billion program whose aim is to protect our agricultural producers from the negative effects of China’s tariffs.

This much-needed aid is entirely appropriate given the unfair retaliation our producers are facing, though I very much prefer open trade and access to international markets for our agricultural products. Our differences with China must be worked out in order to reopen these markets and make further aid unnecessary.

I was pleased to see President Trump come together with European Commission President Jean-Claude Juncker this week to announce a framework for reducing tariffs and other trade barriers between the United States and European Union. They agreed to work together to pressure China to change its ways.

As a response, I joined my Republican colleagues on the Ways and Means Committee in urging President Trump to meet directly with President Xi to negotiate an end to the current trade dispute. Hopefully, he can build on his progress with the European Union and convince President Xi of the merits of open and equitable trade with the United States, which is much more productive than tit-for-tat reciprocal tariffs.

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