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Counterpoint: Trump is addressing unfair trade situation

CHARLENE L. FU

A U.S.-China tariff war is sure to produce very real economic consequences, and political fallout, in both nations.

It also presents an opportunity to re-examine the trade relationship between the world’s two largest economies and perhaps set a new course that would address some of the elephant-in-the-room issues of China’s trade practices.

President Donald Trump is confronting China about its unfair trade practices and theft of American intellectual property when too many others shy away from the truth for fear of Chinese reprisal.

This summer, Trump imposed 25 percent tariffs on a total of $50 billion worth of Chinese goods, and Beijing retaliated. Trump is now adding more Chinese products — at least $200 billion worth — to that list. The response in the U.S. has been stock market volatility and hand-wringing about rising manufacturing costs and consumer prices.

It bears remembering that the Chinese trade practices that irk Trump truly do bedevil Americans and others doing business with China, and they go back decades, at least to the mid-1980s, when China under Deng Xiaoping was opening to the world.

China’s repeated and unashamed theft of intellectual property has been especially egregious and damaging. A 2017 report by the independent and bipartisan U.S. Commission on the Theft of American Intellectual Property put the annual cost of IP theft by all parties at $255 billion to $600 billion in counterfeit goods, pirated software and stolen trade secrets; these figures do not include the full cost of patent infringement. The commission named China “the world’s principle IP infringer.”

China is pushing its “Made in China 2025” campaign, an ambitious plan not only to upgrade Chinese industry — most notably in advanced sectors like information technology, robotics and pharmaceuticals, where IP is key — but to compete with and ultimately displace foreign companies domestically and globally.

To that end, China has continued to aggressively push foreign companies to hand over technology and IP rights in exchange for market access — a possible violation of World Trade Organization rules.

China’s leaders no doubt see things very differently, and the Chinese expression “huo gai” might well apply. Loosely translated, it means “You had it coming.” If you leave your door unlocked and get burgled, huo gai — it was your own fault because you didn’t lock up. Similarly, if U.S. businesses do not take measures to protect their own intellectual property, it’s huo gai if China waltzes in and makes off with it.

Trump’s approach, while unpalatable to some and unsettling in the short term, could result in a much-needed new chapter in U.S.-China trade, one in which Beijing can be compelled to at least abide by the rules it agreed to when it won WTO membership. If nothing else, Trump has unequivocally called China out for behavior that should not be tolerated, and paved the way for other nations to do so, too.

It appears that may have started to happen. Recent news reports tracked an “unprecedented global backlash” against Chinese foreign investment, a “wariness … sharpened and accelerated by the Trump administration.”

The United States remains the one player that can effectively challenge China’s unfair practices. Trump’s tariffs have set the stage for policymakers, trade negotiators and China experts to develop a U.S.-led worldwide strategy that is clear, forceful and has teeth, even if it means short-term economic hardship at home.

Charlene L. Fu is a Washington D.C.-based freelance editor, reporter and translator, and a former Associated Press correspondent. Curtis Chin, a former U.S. ambassador to the Asian Development Bank, co-authored this op-ed column.