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Daily Archives: June 16th, 2018

Kuttner on TAP
Inscrutable China Policy. Trump’s decision to move ahead with tariffs on $50 billion worth of Chinese exports prompted an immediate retaliation by Beijing. It’s a classic case of Trump using the wrong strategy to pursue a long-overdue revision of U.S. coddling of Beijing’s predatory state capitalism.
As an unnamed senior administration official, almost surely chief trade negotiator Robert Lighthizer or White House trade strategist Peter Navarro, told The New York Times:
China has a history of using state subsidies to build up excess capacity in a variety of industries that then pushes down prices and drives free-market competitors in the United States out of business. The United States cannot afford to allow China to carry out the same practices in emerging industries, including robotics, new energy vehicles and information technology.
Exactly right. But the right way to compel China to alter its model or to face economic sanctions is to work with the world’s other major trading bloc, the European Union, in a common China strategy. Trump, however, keeps going out of his way to insult and alienate the EU. Hello?
The hardening of the U.S. line makes Trump’s decision to allow the Chinese tech company ZTE back into U.S. markets all the more bizarre, and makes it even more likely that Trump’s real motive in this one-off favor to Chinese dictator Xi Jinping was to thank Xi for investing in a Trump enterprise in Indonesia and granting lucrative favors to Trump’s daughter, Ivanka.
Trump, with his tiny attention span and his penchant for lashing out, can’t manage to maintain a consistent policy from one day to the next. We do need a revisionist China strategy, but Trump’s version is a perfect marriage of the inept and the corrupt. ~ ROBERT KUTTNER


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